EU Court Rules: Digital Games Must Be Resellable

The Court of Justice of the European Union has declared that consumers can legally resell previously purchased and downloaded games and software despite an End User License Agreement. Read on to know more.

EU Court Sanctions Resale of Downloadable GamesThe Principle of Exhaustion and Copyright Boundaries

The Court of Justice of the European Union declared it legal for consumers to resell previously bought and played downloadable games and software. This decision arises from a legal battle between software reseller UsedSoft and developer Oracle in German courts.

The principle established by the court is the exhaustion of the distribution right (the Principle of Exhaustion of Copyrights₁). This means that when a copyright holder sells a copy and grants the customer the right to use it for an unlimited period, the distribution right is exhausted, allowing for resale.

This decision applies to consumers in European Union member states, covering games acquired through platforms like Steam, GoG, and Epic Games, among others. The initial, or original, purchaser becomes entitled to sell the license of a game which allows someone else (the "buyer") to download it from the publisher's website.

"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..." the decision reads. "Therefore, even if the license agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy."

In practice, it can go something like this: The initial buyer provides a code for the game's license, forfeiting access upon sale/resell. However, the absence of a defined marketplace or system for such transactions introduces complexities and still leaves out a lot of questions.

For example, questions about how the transfer of registration would occur. Physical copies, for one, would still be 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

Publishers insert non-transferable clauses into user agreements, but the ruling overturns such restrictions in the European Union member states. While consumers gain the right to resell, a limitation is that the person selling the digital game cannot continue playing it.

The EU courts states 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 unavailable 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

Regarding reproduction rights, the court clarified that while the exclusive right of distribution is exhausted, the exclusive right of reproduction persists, but it's "subject to necessary reproductions for the lawful acquirer's use." The rules also allow making copies that are needed to use the program as intended, and no contract can stop that.

"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's worth noting that the court ruled that backup copies cannot be resold. Lawful purchasers are restricted from reselling backup copies of computer programs.

"Lawful purchasers of computer programs cannot resell backup copies of the programs." This is according to the Court of Justice of the European Union (CJEU) in the case between Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.