EU Court Rules: Steam, GoG Must Permit Resale of Downloaded Games

The Court of Justice of the European Union has ruled that consumers can legally resell previously purchased and downloaded games and software, despite restrictions outlined in End User License Agreements. This landmark decision has significant implications for digital marketplaces and consumers alike.

EU Court Sanctions Resale of Downloadable Games

The Principle of Exhaustion and Copyright Boundaries

In a pivotal ruling stemming from a legal dispute between software reseller UsedSoft and developer Oracle in German courts, the Court of Justice of the European Union has affirmed that consumers have the right to resell digital games and software. This ruling hinges on the principle of exhaustion of the distribution right, often referred to as the Principle of Exhaustion of Copyrights.

Under this principle, when a copyright holder sells a copy of a product and grants the customer an unlimited use right, their exclusive distribution right is exhausted. This allows the original purchaser to resell the license to another buyer, who can then download the game from the publisher's website. This applies to games purchased on platforms such as Steam, GoG, and Epic Games within the European Union.

The court's decision reads, "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."

However, practical implementation raises several questions, particularly regarding the transfer of registration. While physical copies might remain registered under the original owner's account, digital transactions lack a clear marketplace or system for these exchanges.

(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 non-transferable clauses in user agreements, this ruling overrides such restrictions within EU member states. A crucial caveat is that the seller must relinquish their ability to play the game upon resale.

The EU court stipulates, "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 clarified that while the distribution right is exhausted, the exclusive right of reproduction remains intact but is subject to necessary reproductions for the lawful acquirer's use. This means that subsequent buyers can download the game onto their computers to use as intended, and no contract can prevent this.

The court's reasoning 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. According to the Court of Justice of the European Union in the case between Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp, "Lawful acquirers of computer programs cannot resell backup copies of the programs."