Bind on Equip items are designed so that they can only be used by the character that first equips them. They can not be traded once they have been equipped, often called "soulbound", or "bound" to that player. The item can normally be sold to a vendor, however.
BoE in Diablo III
Some very high level Diablo 3 items will likely be designated as BoE to keep the end game economy from stagnating, and at that only items above level 85.
The Diablo 3 team has said that BoE might apply to accounts, rather than to characters, thus allowing players to exchange such items between their own characters on the same account.
There will not be any Bind on Pick-up items in Diablo 3, other than quest items that are only carried in the inventory, not actually equipped.
Blizzard Comments
Jay Wilson addressed this issue in an interview from BlizzCon 2009. [1]
- Jay Wilson: We have no “Soulbound” or bind-on-pickup, except for quest items. We do have bind-on-equip for the highest end items in the game. We targeted, roughly, any item above level 85. These we will do as bind-on-equip. The reason for this is that we want people to be able to trade them, but we also want to remove the high-end items from the economy. One of the greatest ways that you can do that is with bind-on-equip. What we don't want is to have a situation where you find something on the ground like, “Oh, man. This would be a perfect weapon for my Monk. Oh, but I just picked it up and now it's on the wrong character.” We don't want that at all.
- Most of our focus on Diablo 3 is as a trading game. So, if you take trading out of the item space, you ruin the core of the game. Finding a really great item that is not for you is still a great event because it means you have a bartering tool to get the item that you do want. We definitely want to make sure that that still exists.