EU Court: digitally-distributed software, games can be resold as used

By on July 4, 2012, 3:00 PM

It's no secret how most video game publishers and software vendors in general feel about the second hand market. Well, their cries for lost sales revenue are bound to get worse in Europe, after a landmark ruling by the High Court in the European Union declared that it is legal for someone to sell their licenses for physical or digital software to another person, as long as they uninstall or otherwise deactivate their copy first.

The case related to a dispute between Oracle and UsedSoft in which Oracle was seeking to stop retailer usedSoft from reselling licenses for its software. The company argued that the EULA under which the software was originally sold contained a specific term prohibiting the license from being transferred to a third party.

However, the European Court of Justice ruled that:

Where the copyright holder makes available to his customer a copy – tangible or intangible – and at the same time concludes, in return form payment of a fee, a licence agreement granting the customer the right to use that copy for an unlimited period, that right holder sells the copy to the customer and thus exhausts his exclusive distribution right. Such a transaction involves a transfer of the right of ownership of the copy. Therefore, even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.

In other words the right of software developers to control distribution of a piece of software is "exhausted" (i.e. lost) once the developer has been paid for it (first sale). However, it was also made clear that if a second hand sale goes ahead then the first purchaser must stop using his copy of the software, because the developer's right to control reproduction of software is not exhausted on a second hand sale.

Up until now the second hand market was mostly limited to physical copies of software — even though companies are trying to curb that practice — but with the rise of digital distribution it was increasingly difficult and in most cases impossible to get some cash in return for your old, no longer used games and programs.

It will be interesting to see the repercussions this ruling will have on the gaming market. Some believe the likes of Steam and Origin will have to facilitate a digital pre-owned market in Europe, which is good news for consumers, but it may also deter digital retailers from offering regular sales promotions.




User Comments: 21

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Guest said:

cant wait for this to hit the U.S.

ramonsterns said:

In the word of the great Nelson, "HAW HAW!"

gwailo247, TechSpot Chancellor, said:

I'm waiting for the software company reactions about this costing them more money, in addition to the onerous burden of piracy...while the quietly sweep the BILLION dollars in sales of MW2 under the rug...

hahahanoobs hahahanoobs said:

You don't see car companies crying about used car sales, but these shady developers and publishers think their games are special. How pathetic. If the gaming industry isn't as profitable as it once was or as much as you'd like... find other work and/or stop shortchanging your customers to make up for it.

What also pisses me off is EA doesn't want 100% distribution to make things better/easier for gamers, they want it because it's less money they have to pay for discs, packaging and shipping etc. Imagine the amount of people that can't get broadband internet at all, people with low bandwidth, and people with low download limits per month . And we all know some games are pushing 15-20GB, and that's before patches and DLC.

Kibaruk Kibaruk, TechSpot Paladin, said:

Welcome the era of micro transactions in ALL games.

Renrew Renrew said:

Good on you ECJ.

Perhaps our Judiciary will get off their collective asses and pass similar legislation.

Not holding my breath though.

Adhmuz Adhmuz, TechSpot Paladin, said:

This will never make it to North America, far too many people concerned with piracy and not the end consumers satisfaction. This is still a step in the right direction somewhere at least, the problem with digital distributions like steam and origin however is the user account. Games are bound to your account and require an Internet connect (In theory to thwart piracy) making it impossible to sell games unless its made possible by the aforementioned distributors, and again I don't see this catching on soon. Another issue is games that are purchased on sale, how would that translate to resale. The whole notion of the customer is already right just doesn't apply in this digital era, the lack of return policy is something that also has to be looked at. Theres no reason a game on steam can't be refunded or resold, other than steam doesn't allow it

yRaz yRaz said:

They might have to actually make good products now so that people don't WANT to sell them.

gwailo247, TechSpot Chancellor, said:

They might have to actually make good products now so that people don't WANT to sell them.

The key will be having players to want to retain the CD key. For instance, I'd never sell my COD4 game, I still love playing it too much. Other games I would not be so attached to.

Its a shame that the stop putting out additional content for older game titles. I understand the economics of it, but I have a feeling they'd make a tidy profit on it nonetheless.

ikesmasher said:

Maybe Steam will utilize this if it hits the US...buyer posts game for sale, steam takes 2 dollars from sale price, tada? everyones happy?

although if its a digital game I guess people will be charging full retail, as there arent phsyical damages to worry about...

fimbles fimbles said:

Confused.

Would the product key not be tied to your account forcing you to sell the entire account rather than separate games?

1 person liked this | Coodu Coodu said:

They would more set up a marketplace where you sell the license to the game, Steam takes a cut and the buyer gets your licensing details.

This really opens up a massive can of worms. I for one would be very saddened if this forced companies like Steam into a subscription model... Guess we'll have to wait and see.

MilwaukeeMike said:

This really opens up a massive can of worms. I for one would be very saddened if this forced companies like Steam into a subscription model... Guess we'll have to wait and see.

Exactly... you guys laugh and think the games will be better so people won't sell them and 'ha-ha' at the game companies who will make less money etc. They'll figure out a way to make us pay. They'll figure it out or stop making games. Yes to microtransaction, yes to product placement (where applicable), yes to subscription models. How cool will it be to have to stare at an ad while the next level loads? But hey! We can sell the game to our friend when we're done!

For all you know the next generation of games will cost $30 new with $15/month to play. MMO or not.

Guest said:

Also this is different to buy a physically used item in that its no different than a new item all ur buying is a number, and it seems silly that if steam had some kinda game aution and someone puts an indie game on it and its 10p less than brand new, the indie developer gets nothing

GeforcerFX GeforcerFX said:

If something like this passed in the US and Japan, all major big titles and prob most games in the next 2 years would switch to F2P's with micro transactions, which if done correctly wouldn't be a bad thing (stops pirating technically), but if they all went pay 2 win, then I would prob stop gaming and become a monk or something.

Scavengers Scavengers said:

This really opens up a massive can of worms. I for one would be very saddened if this forced companies like Steam into a subscription model... Guess we'll have to wait and see.

Exactly... you guys laugh and think the games will be better so people won't sell them and 'ha-ha' at the game companies who will make less money etc. They'll figure out a way to make us pay. They'll figure it out or stop making games. Yes to microtransaction, yes to product placement (where applicable), yes to subscription models. How cool will it be to have to stare at an ad while the next level loads? But hey! We can sell the game to our friend when we're done!

For all you know the next generation of games will cost $30 new with $15/month to play. MMO or not.

But anyone that buys a game with a subscription is a total fool, and I think most will fell the same.

Dave

Scavengers Scavengers said:

This really opens up a massive can of worms. I for one would be very saddened if this forced companies like Steam into a subscription model... Guess we'll have to wait and see.

Exactly... you guys laugh and think the games will be better so people won't sell them and 'ha-ha' at the game companies who will make less money etc. They'll figure out a way to make us pay. They'll figure it out or stop making games. Yes to microtransaction, yes to product placement (where applicable), yes to subscription models. How cool will it be to have to stare at an ad while the next level loads? But hey! We can sell the game to our friend when we're done!

For all you know the next generation of games will cost $30 new with $15/month to play. MMO or not.

But anyone that buys a game with a subscription is a total fool, and I think most will fell the same.

Dave

I mean that for single player games.

Guest said:

thing is, Steam is great as it is.

sliderider sliderider said:

You don't see car companies crying about used car sales, but these shady developers and publishers think their games are special. How pathetic. If the gaming industry isn't as profitable as it once was or as much as you'd like... find other work and/or stop shortchanging your customers to make up for it.

What also pisses me off is EA doesn't want 100% distribution to make things better/easier for gamers, they want it because it's less money they have to pay for discs, packaging and shipping etc. Imagine the amount of people that can't get broadband internet at all, people with low bandwidth, and people with low download limits per month . And we all know some games are pushing 15-20GB, and that's before patches and DLC.

There is a big difference between a used car, that wears out with age and requires large repairs eventually, and a piece of software that can be used forever. Once the used car wears out and goes to the crusher, someone at some point has to buy a new car to replace that old clunker. With software, the same copy can circulate for as long as the media holds up which is usually a helluva a lot longer than a car lasts and when you are talking about a digital copy, it can last literally forever as long as the license key is not lost. It also raises another point. If someone has the license key to a game that is 10, 20, or 30 years old, is the publisher responsible for keeping a copy of the game available for redownload for that long? If I want to play Madden 2013 in 2040 because I liked the team lineups for this year, does EA have to make it available to me if I buy a license key from someone else?

sliderider sliderider said:

This will never make it to North America, far too many people concerned with piracy and not the end consumers satisfaction. This is still a step in the right direction somewhere at least, the problem with digital distributions like steam and origin however is the user account. Games are bound to your account and require an Internet connect (In theory to thwart piracy) making it impossible to sell games unless its made possible by the aforementioned distributors, and again I don't see this catching on soon. Another issue is games that are purchased on sale, how would that translate to resale. The whole notion of the customer is already right just doesn't apply in this digital era, the lack of return policy is something that also has to be looked at. Theres no reason a game on steam can't be refunded or resold, other than steam doesn't allow it

You've been able to download cracked copies of games requiring online registration and connection to a server for years on Bittorrent that circumvent those requirements. You'll just see more of that if Steam and their clones don't loosen up. They SAY they are stopping piracy, but they are not. The only thing they are doing is trying to kill off the used media market. Once everything goes digital, you won't be able to buy analog copies of anything anymore. Music, games, movies, books...they will all be tied to a single user and every sale will be a new sale. There will be no such thing as used anymore.

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