EU Court Rules: Steam, GoG Must Allow Reselling of Downloaded Games

The Court of Justice of the European Union has made a groundbreaking decision, allowing consumers to resell previously purchased and downloaded games and software, despite restrictions in End User License Agreements. This ruling has significant implications for gamers and the digital marketplace.

EU Court Sanctions Resale of Downloadable Games

The Principle of Exhaustion and Copyright Boundaries

The European Union's Court of Justice has ruled in favor of consumers, enabling the resale of downloadable games and software. This decision stems from a landmark case between software reseller UsedSoft and Oracle in Germany, emphasizing the Principle of Exhaustion of Copyrights. According to this principle, once a copyright holder sells a copy and grants the customer unlimited use, their distribution rights are exhausted, thereby permitting resale.

This ruling impacts consumers across EU member states and includes games purchased from platforms like Steam, GoG, and Epic Games. The original purchaser can transfer the license to another user, who can then download the game from the publisher's website.

The court's decision 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, the original buyer provides a code for the game's license and relinquishes access upon resale. However, the absence of a structured marketplace for these transactions poses challenges and leaves many questions unanswered, such as how to manage the transfer of registration, especially since physical copies remain tied 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)

Reseller Cannot Access or Play the Game Upon Resale

Despite publishers' attempts to restrict transfers through non-transferable clauses in user agreements, the EU ruling overrides these restrictions. Consumers can resell digital games, but the original seller must make the game unusable on their device 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."

Allows the Reproduction of Copies Necessary for Program Use

The court also addressed reproduction rights, stating that while the distribution right is exhausted, the right of reproduction remains intact but is subject to necessary reproductions for the lawful acquirer's use. This allows subsequent buyers to download and use the program as intended.

The court's ruling emphasizes, "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

However, the court has drawn a line on the resale of backup copies. Lawful acquirers are prohibited from reselling backup copies of computer programs, as decided in the case of Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.

"Lawful acquirers of computer programs cannot resell backup copies of the programs." This ruling from the Court of Justice of the European Union (CJEU) clarifies the boundaries of resale rights concerning backup copies.