The Court of Justice of the European Union has made a groundbreaking decision that allows consumers to legally resell previously purchased and downloaded games and software, despite restrictions in End User License Agreements. This ruling has significant implications for digital marketplaces and consumers alike.
EU Court Sanctions Resale of Downloadable Games
The Principle of Exhaustion and Copyright Boundaries
The Court of Justice of the European Union has ruled in favor of consumers, allowing the resale of previously bought and played downloadable games and software. This landmark decision stems from a legal dispute between software reseller UsedSoft and developer Oracle in German courts.
The court's ruling hinges on the principle of exhaustion of the distribution right, also known as the Principle of Exhaustion of Copyrights. According to this principle, once a copyright holder sells a copy and grants the customer the right to use it indefinitely, the distribution right is exhausted. This exhaustion allows the original purchaser to resell the license, enabling another person to download the game from the publisher's website.
This ruling applies to consumers across European Union member states and includes games purchased through platforms such as Steam, GoG, and Epic Games. The decision states, "A license agreement granting the customer the right to use that copy for an unlimited period, that rightholder sells the copy to the customer and thus exhausts his exclusive distribution right... Therefore, even if the license agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy."
In practice, the process might involve the original buyer providing a code for the game's license and forfeiting access upon resale. However, the lack of a defined marketplace or system for these transactions poses challenges and leaves many questions unanswered, such as how the transfer of registration would occur, especially since physical copies remain registered under the original owner's account.
(1) "The principle of copyright exhaustion is a limit on the copyright owner’s general right to control the distribution of their work. Once a copy of the work has been sold, with the copyright-holder’s consent, the right is said to be “exhausted” – meaning the purchaser is free to re-sell that copy, and the rights-owner has no right to object." (via Lexology.com)
Reseller Cannot Access or Play the Game Upon Resale
Despite publishers including non-transferable clauses in user agreements, the EU ruling overrides these restrictions within member states. While consumers gain the right to resell, there is a significant limitation: the person selling the digital game must cease playing it.
The EU courts have clarified that: "An original acquirer of a tangible or intangible copy of a computer program for which the copyright holder’s right of distribution is exhausted must make the copy downloaded onto his own computer unusable at the time of resale. If he continued to use it, he would infringe the copyright holder’s exclusive right of reproduction of his computer program."
Allows the Reproduction of Copies Necessary for Program Use
The court also addressed reproduction rights, stating that while the exclusive right of distribution is exhausted, the exclusive right of reproduction remains intact, but is "subject to necessary reproductions for the lawful acquirer's use." This means that copies necessary for using the program as intended are permissible, and no contract can prohibit this.
The court's ruling states, "In this context, the Court’s answer is that any subsequent acquirer of a copy for which the copyright holder’s distribution right is exhausted constitutes such a lawful acquirer. He can therefore download onto his computer the copy sold to him by the first acquirer. Such a download must be regarded as a reproduction of a computer program that is necessary to enable the new acquirer to use the program in accordance with its intended purpose." (via EU Copyright Law: A Commentary (Elgar Commentaries in Intellectual Property Law series) 2nd Edition)
Restriction on the Sale of Backup Copies
It is important to note that the court has ruled against the resale of backup copies. Lawful acquirers are prohibited from reselling backup copies of computer programs.
"Lawful acquirers of computer programs cannot resell backup copies of the programs." This was the ruling by the Court of Justice of the European Union (CJEU) in the case between Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.
