European Court of Justice rules: You can resell digitally purchased software.

[Syt]

http://www.rockpapershotgun.com/2012/07/03/crikey-eu-rules-you-can-resell-downloaded-games/

The Court Of Justice of the European Union has just ruled that people should be able to resell downloaded games. In an environment where publishers are trying to destroy basic consumer rights like the ability to resell physical products you've paid for, this could be one heck of a turnaround for customers. And that's no matter what it might say in the EULAs. This could have absolutely enormous implications on how services like Steam, Origin, GamersGate and the like work, and finally restore some rights back to the gamer.

The draconian and almost inevitably unenforceable rules we all pretend we've read and agreed to whenever we buy an online game are packed with ridiculous attempts to remove our rights of ownership. At best, when those rules are held to their letter, we're long-term renting the games, with no rights to protect their being taken away from us at any point. So a ruling saying we have enough ownership that we can actually sell them on to others is a massive difference. Of course, it does ask one rather huge question: Er, how?

The preliminary ruling states,
 

"The first sale in the EU of a copy of a computer program by the copyright holder or with his consent exhausts the right of distribution of that copy in the EU. A rightholder who has marketed a copy in the territory of a Member State of the EU thus loses the right to rely on his monopoly of exploitation in order to oppose the resale of that copy... The principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD) but also where he distributes them by means of downloads from his website."

This was a result of software developers Oracle taking German company UsedSoft to court for reselling licenses to Oracle products. However, after reaching the European Court, a surprise blow came against the big publisher. And it has massive implications for all of online purchases, including games bought from places such as Steam, Origin, GamersGate, etc. And even further implications for those publishers attempting to ban the far more commonplace reselling of boxed products too.

The specific rule seems to be that if a license is sold indefinitely – i.e. not a license for a year, or similar – that the rightholder "exhausts his exclusive distribution right".

"Such a transaction involves a transfer of the right of ownership of the copy."

That sentence is a really massive deal. It's the very first time there has been any official sense of ownership via digital distribution, and if it gets implemented by courts, it's going to change a great deal. From our having the legal right to sell games in our Origin accounts, right down to surely taking away the ability for companies like Valve and EA to block customers' access to their purchased games for other infractions.

Right now we have companies like Microsoft and Sony looking for ways to make reselling of their products impossible for their next generation of consoles, and presumably relying heavily on the perceived redundancy of the argument if those games were purchased online (as surely the next gen consoles will want to focus on). But pow, maybe not. With a ruling that states,

   

"The Court observes in particular that limiting the application of the principle of the exhaustion of the distribution right solely to copies of computer programs that are sold on a material medium would allow the copyright holder to control the resale of copies downloaded from the internet and to demand further remuneration on the occasion of each new sale, even though the first sale of the copy had already enabled the rightholder to obtain appropriate remuneration. Such a restriction of the resale of copies of computer programs downloaded from the internet would go beyond what is necessary to safeguard the specific subject-matter of the intellectual property concerned."

this whole deal just got an awful lot more interesting. It appears to be directly stating that it is inappropriate for copyright holders to insist on the right to be remunerated with every re-sale, which could even have legal implications for the current systems various console publishers have introduced, forcing pre-owned customers to pay a tithe before the game will work properly.

The ruling also makes it clear that if someone does resell a digital copy of a product, they must remove their version of it from their computer – because at that point it does become a copyright violation, as it's become a reproduction, not a resale. But fascinatingly, it adds, "However, the directive authorises any reproduction that is necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose. Such reproduction may not be prohibited by contract." What does that mean for the current exploits publishers are using, too? Could they now be illegal?

How companies like Steam, EA, etc will react will be very interesting. Their current infrastructures certainly don't support reselling, and they'd probably ban your account if they caught you trying to. This is a ruling whose implications could stretch a very long way. There are bound to be challenges to the ruling made, and we can assume this one will stay in courts for a good while longer.

Wow.

[Martinus]

I'm glad at least the European institutions are not in the pocket of big IP providers, since almost every other government is. Perhaps the world government is not such a bad idea after all - since only at the supra-national level it seems the governments (which ultimately have at least some sort of democratic legitimacy) are able to stand their ground to international corporations (which lack any whatsoever).

[Grey Fox]

[Syt]

Now, if they would also rule that, within the Common Market, publishers can't restrict digital availability of products (e.g. download/media being available in Germany but not Austria or vice versa) then we'd be a big step ahead.

[Martinus]

Now, if they would also rule that, within the Common Market, publishers can't restrict digital availability of products (e.g. download/media being available in Germany but not Austria or vice versa) then we'd be a big step ahead.

I think we are getting there. So far the European Commission has been achieving this piecemeal by striking deals with individual providers (Amazon and Apple come to mind, both agreeing voluntarily to provide the same products, more or less, throughout the EU). And the European Union has just killed ACTA (despite several EU governments eagerly wanting to adopt it), so that's a plus.

[MadImmortalMan]

This is great. Good catch.

[Zanza]

Now, if they would also rule that, within the Common Market, publishers can't restrict digital availability of products (e.g. download/media being available in Germany but not Austria or vice versa) then we'd be a big step ahead.

I am sure that will come eventually. Either by legislation or by court ruling.

[The Minsky Moment]

Haven't read the whole thing, but seems like it might be conflating copyright rights  with contractual licensing terms.

[Zanza]

In general, this seems to be a very good verdict. Will be interesting how that works with games like Diablo III where you need an online account in addition to the digital download you buy.

[Syt]

So far the European Commission has been achieving this piecemeal by striking deals with individual providers (Amazon and Apple come to mind, both agreeing voluntarily to provide the same products, more or less, throughout the EU)

Not sure if Amazon is a good example, though. Digital downloads (Kindle or MP3s) from the UK site don't work for me as I don't have a UK billing address - I have to go through Amazon.de . . . even though I can order physical products from Amazon.co.uk (mind you, Amazon is pretty quick in making kindle books available on .de if you point out a book on .co.uk you'd like).

Similar, iTunes only allows me to buy on Austrian iTunes. UK with its vastly superior choice of TV series and movies is right out.

I know you can circumvent that with fake billing addresses, but that's not the point.

[The Minsky Moment]

I'm glad at least the European institutions are not in the pocket of big IP providers, since almost every other government is. Perhaps the world government is not such a bad idea after all - since only at the supra-national level it seems the governments (which ultimately have at least some sort of democratic legitimacy) are able to stand their ground to international corporations (which lack any whatsoever).

Arguably one of the big reasons that multinational corps have more difficulty influencing supra-national bodies is precisely because those bodies are less accountable and less democratic than national or sub-national bodies.

[CountDeMoney]

So what's up with the DRM for Jutland?

[Zanza]

Arguably one of the big reasons that multinational corps have more difficulty influencing supra-national bodies is precisely because those bodies are less accountable and less democratic than national or sub-national bodies.

The ECJ doesn't seem to be more or less democratic than our national court system and the anti-trust/competition agency in Brussels seems to be slightly more democratically accountable as our national agency is led by bureaucrats, whereas the EU commissioner for competition at least has to be confirmed by the EU parliament.

[Admiral Yi]

The ruling sounds fine in theory.  It's the implementation that is bound to get messy.

[Syt]

It should be interesting what kind of repercussions this ruling will have. Not only for software but also other digitally bought articles like iTunes movies or MP3s.