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

The European Union's Court of Justice has ruled that consumers within the EU can legally resell downloaded games and software, despite any restrictions stated in End-User License Agreements (EULAs). This decision stems from a legal dispute between UsedSoft and Oracle, and hinges on the principle of exhaustion of distribution rights.

Exhaustion of Distribution Rights and Copyright:

The court's ruling centers on the principle that once a copyright holder sells a copy of software and grants the user unlimited usage rights, the distribution right is exhausted. This allows for resale. This applies to games purchased through platforms like Steam, GoG, and Epic Games. The original purchaser can sell the license, enabling a new buyer to download the game.

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."

The practical application involves the original buyer transferring the license code, losing access themselves upon resale. However, the lack of a formal resale marketplace creates complexities. Issues remain regarding account transfers, especially considering physical copies remain registered to the original owner.

Limitations on Resale:

While resale is permitted, the seller must render their copy unusable upon resale. The EU court clarified: "An original acquirer... 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..."

Reproduction Rights:

The court acknowledged that while the distribution right is exhausted, the reproduction right remains. However, this right is limited to reproductions necessary for lawful use. Creating copies for the intended purpose of using the software is permissible, and contractual restrictions cannot override this.

Backup Copies:

Importantly, the ruling excludes the resale of backup copies. A separate case (Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.) established that lawful acquirers cannot resell backup copies.

This EU ruling significantly impacts the digital games market, granting consumers a new right while clarifying limitations on resale and reproduction. The practical implementation of this decision, however, will require further development of appropriate resale mechanisms.