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

The Court of Justice of the European Union has ruled that consumers have the right to resell previously purchased and downloaded games and software, despite any restrictions stated in End User License Agreements. This landmark decision has significant implications for digital marketplaces across the EU.

EU Court Sanctions Resale of Downloadable Games

The Court of Justice of the European Union (CJEU) has established that it is legal for consumers to resell digital games and software that they have previously purchased and used. This ruling stems from a dispute between the software reseller UsedSoft and the developer Oracle, initially fought in German courts.

The key legal concept at play is the Principle of Exhaustion of Copyrights. When a copyright holder sells a copy of a game and grants the customer the right to use it indefinitely, their exclusive distribution right is considered exhausted. This allows the original purchaser to resell the license, enabling another user to download the game from the publisher's website.

This ruling applies to consumers within the European Union and covers games purchased through platforms such as Steam, GoG, and Epic Games. The CJEU 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 process could involve the original buyer providing a code for the game's license and relinquishing access upon resale. However, the absence of a structured marketplace or system for such transactions raises numerous logistical challenges, including how to handle the transfer of registration, especially since physical copies are often still linked 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 often including non-transferable clauses in user agreements, the CJEU ruling overrides these restrictions within EU member states. While consumers can resell their digital games, they are not permitted to continue using the game after the sale.

The CJEU specified that: "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 the rights concerning reproduction. While the exclusive right of distribution is exhausted, the exclusive right of reproduction remains intact, but it is "subject to necessary reproductions for the lawful acquirer's use." This means that subsequent acquirers can download the game onto their computers, as this is considered a necessary reproduction for using the program as intended.

"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

It is important to note that the CJEU has ruled that backup copies of computer programs cannot be resold. Lawful acquirers are prohibited from reselling these backup copies.

"Lawful acquirers of computer programs cannot resell backup copies of the programs." This was established by the Court of Justice of the European Union in the case between Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.