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 previously purchased and downloaded games and software, even if the End User License Agreement says otherwise. Let's delve into the details.

EU Court Sanctions Resale of Downloadable Games

Exhaustion of Rights and Copyright Implications

The European Court of Justice has declared the resale of previously purchased downloadable games and software legal for consumers. This landmark decision stems from a legal dispute between UsedSoft, a software reseller, and Oracle, the developer, in German courts.

The court's ruling hinges on the principle of exhaustion of distribution rights (the Principle of Exhaustion of Copyrights₁). This principle dictates that once a copyright holder sells a copy and grants the customer unlimited usage rights, the distribution right is exhausted, thereby permitting resale.

This ruling applies to EU member states and covers games purchased through platforms such as Steam, GoG, and Epic Games. The original purchaser gains the right to sell the game's license, enabling a new buyer to download it from the publisher's website.

The court's decision explicitly 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 the game's license code, relinquishing access after the sale. However, the lack of a formal marketplace for such transactions introduces complexities and raises several unanswered questions, such as the process for transferring registration. 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 publishers often include non-transferable clauses in their user agreements, this EU ruling supersedes such restrictions within member states. Importantly, the right to resell does not extend to continued use by the seller; the seller must make the game unplayable on their device upon resale.

The EU court clarifies: "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."

Permitted Reproduction for Program Use

Regarding reproduction rights, the court clarifies that while the distribution right is exhausted, the reproduction right remains, but is "subject to necessary reproductions for the lawful acquirer's use." This allows for copies needed to use the program as intended, a right that cannot be contractually removed.

"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)

Restrictions on Reselling Backup Copies

It's crucial to note that the court explicitly prohibits the resale of backup copies. Lawful acquirers cannot resell their backups.

"Lawful acquirers of computer programs cannot resell backup copies of the programs." This is a direct quote from the Court of Justice of the European Union (CJEU) ruling in the case between Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.