Steam, GoG and Others Must Allow Reselling of Downloaded Games in EU

The European Union's Court of Justice has ruled that consumers can legally resell digitally downloaded games and software, despite any restrictions in the End User License Agreement (EULA). Let's delve into the details.

EU Court Sanctions Resale of Downloadable Games

Copyright Exhaustion and its Implications

The European Court of Justice's decision stems from a legal dispute between UsedSoft and Oracle, establishing the principle of exhaustion of distribution rights. This means that once a copyright holder sells a copy of software and grants the user unlimited usage rights, the distribution right is considered exhausted, permitting resale. This ruling applies to EU member states and impacts platforms like Steam, GoG, and Epic Games. The original purchaser gains the right to sell the game license, enabling a new buyer to download it from the publisher's website. The court's ruling 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, this might involve the original buyer transferring a game license code, losing access upon resale. However, the lack of a formal resale marketplace presents challenges and raises unanswered questions, such as how registration transfers would function. For instance, physical copies remain registered to 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)

Resellers Lose Access Upon Resale

While the ruling allows resale, it's crucial to understand that the seller forfeits access to the game upon resale. The EU court clarified: "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."

Reproduction Rights Clarified

The court addressed reproduction rights, stating that while distribution rights are exhausted, reproduction rights remain, but are limited to "necessary reproductions for the lawful acquirer's use." This allows for copies needed for intended program use, overriding contractual restrictions. The court further clarified: "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)

Backup Copies Cannot Be Resold

It's important to note that the ruling explicitly excludes backup copies. The Court of Justice of the European Union (CJEU) ruled in Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp. that lawful acquirers cannot resell backup copies of software. The court stated: "Lawful acquirers of computer programs cannot resell backup copies of the programs."