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

[Tamas]

it's worth noting to support my point that copy-protection does work against piracy to a degree. Not much, but it does have an effect.

[sbr]

Neat-o torpedo

The most pirated PC games of 2011 (the year Witcher 2 came out) were (according to Torrent Freak):

1    Crysis 2    (3,920,000)    (Mar. 2011)
2    Call of Duty: Modern Warfare 3    (3,650,000)    (Nov. 2011)
3    Battlefield 3    (3,510,000)    (Oct. 2011)
4    FIFA 12    (3,390,000)    (Sept. 2011)
5    Portal 2    (3,240,000)    (Apr. 2011)

Portal 2 and COD:MW3 were Steamworks.  BF3 was Origin.  Crysis had some silly DRM I don't remember.  FIFA is EA so I am sure it did as well.

[dps]

Neat-o torpedo

The most pirated PC games of 2011 (the year Witcher 2 came out) were (according to Torrent Freak):

1    Crysis 2    (3,920,000)    (Mar. 2011)
2    Call of Duty: Modern Warfare 3    (3,650,000)    (Nov. 2011)
3    Battlefield 3    (3,510,000)    (Oct. 2011)
4    FIFA 12    (3,390,000)    (Sept. 2011)
5    Portal 2    (3,240,000)    (Apr. 2011)

Portal 2 and COD:MW3 were Steamworks.  BF3 was Origin.  Crysis had some silly DRM I don't remember.  FIFA is EA so I am sure it did as well.

Ugh.  I hope we aren't going to have this argument again--we spent most of a thread arguing about it a while back--but there's good reason to think that there's a correlation between how popular a game is overall, and how often it's pirated.

[Neil]

Neat-o torpedo

The most pirated PC games of 2011 (the year Witcher 2 came out) were (according to Torrent Freak):

1    Crysis 2    (3,920,000)    (Mar. 2011)
2    Call of Duty: Modern Warfare 3    (3,650,000)    (Nov. 2011)
3    Battlefield 3    (3,510,000)    (Oct. 2011)
4    FIFA 12    (3,390,000)    (Sept. 2011)
5    Portal 2    (3,240,000)    (Apr. 2011)

Portal 2 and COD:MW3 were Steamworks.  BF3 was Origin.  Crysis had some silly DRM I don't remember.  FIFA is EA so I am sure it did as well.

BF3 used Origin for copy-protection?  I wouldn't know, since I've mostly exited the AAA market on PC.

[The Minsky Moment]

I've changed my mind about the ruling.  It's an unwarranted restriction on the freedom to contract.

Maybe. maybe not.

I'm not familiar with ECJ procedure and some of the jargon is foreign as well.
But what it looks like is that a couple very specific legal questions were referred to and ruled on by the Court, and all those legal questions involved how to intepret specific directives incorporating copyright protections.
Thus, it could be the case that all the Court's ruling says is that purchasers and sellers of purportedly non-transferable licenses (and their brokers) can't be found in violation of the copyright enforcement directives, but the seller could in theory still be found to have breached the terms of the contractual license agreement.

Not sure about this though - someone more familiar with European law could clarify.

[alfred russel]

Not sure about this though - someone more familiar with European law could clarify.

I only know of one languishite claiming to be a lawyer one the continent...

[The Minsky Moment]

All jokes aside, I would assume Martinus would know the answer to this.

[Razgovory]

All jokes aside, I would assume Martinus would know the answer to this.

I will grant that he claims to know the answer to this.

[The Brain]

All jokes aside, I would assume Martinus would know the answer to this.

[Sheilbh]

I'm not familiar with ECJ procedure and some of the jargon is foreign as well.
But what it looks like is that a couple very specific legal questions were referred to and ruled on by the Court, and all those legal questions involved how to intepret specific directives incorporating copyright protections.
Thus, it could be the case that all the Court's ruling says is that purchasers and sellers of purportedly non-transferable licenses (and their brokers) can't be found in violation of the copyright enforcement directives, but the seller could in theory still be found to have breached the terms of the contractual license agreement.

I'm not sure about too much, but it was a reference of specific questions from a German Court.  It does refer to a 2009 EU regulation on computer programs.  From what I understand Oracle's main argument was that they were selling licenses online.  The Court's clarified that if authorised and unlimited, then there's effectively no difference between buying online and buying a physical program in a shop (Oracle argued there was).  Even if the license forbids resale the copyright holder's power over distribution is exhausted by the authorised sale or transfer of the program or license.  They can't oppose your re-sale.  Their power over a genuine purchase or authorised download is as extinguished as with a physical product.  It's still subject to other contractual provisions and to copyright - so you have to extinguish your access to a license to resell it.  And there are other exceptions mentioned in the directive.

That at least is my understanding.  This is from the ICLR:
http://cases.iclr.co.uk/Subscr/search.aspx?path=WLR%20Dailies/WLRD%202011/wlrd2012-192

THE COURT (Grand Chamber) ruled as follows. Article 4(2) of Parliament and Council Directive 2009/24/EC of 23 April 2009 on the legal protection of computer programs meant that the right of distribution of a copy of a computer program was exhausted if the copyright holder who had authorised, even free of charge, the downloading of that copy from the Internet onto a data carrier had also conferred, in return for payment of a fee intended to enable him to obtain a remuneration corresponding to the economic value of the copy of the work of which he was the proprietor, a right to use that copy for an unlimited period. In the event of the resale of a user licence entailing the resale of a copy of a computer program downloaded from the copyright holder's website, that licence having originally been granted by that rightholder to the first acquirer for an unlimited period in return for payment of a fee intended to enable the rightholder to obtain a remuneration corresponding to the economic value of that copy of his work, the second acquirer of the licence, as well as any subsequent acquirer of it, would be able to rely on the exhaustion of the distribution right under article 4(2), and hence be regarded as lawful acquirers of a copy of a computer program within the meaning of article 5(1) and benefit from the right of reproduction provided for in that provision.

Obviously the ruling and Advocate General's opinion aren't online yet but they'll probably explain more.

The Directive and press release are here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:111:0016:0022:EN:PDF
http://curia.europa.eu/jcms/upload/docs/application/pdf/2012-07/cp120094en.pdf

[dps]

I'm not sure about too much, but it was a reference of specific questions from a German Court.  It does refer to a 2009 EU regulation on computer programs.  From what I understand Oracle's main argument was that they were selling licenses online.  The Court's clarified that if authorised and unlimited, then there's effectively no difference between buying online and buying a physical program in a shop (Oracle argued there was).  Even if the license forbids resale the copyright holder's power over distribution is exhausted by the authorised sale or transfer of the program or license.  They can't oppose your re-sale.  Their power over a genuine purchase or authorised download is as extinguished as with a physical product.  It's still subject to other contractual provisions and to copyright - so you have to extinguish your access to a license to resell it.  And there are other exceptions mentioned in the directive.

If you're correct, then the ruling seems quite reasonable.

[DontSayBanana]

Yeah, but the game can't locally verify a random key, and if you're going to use an online connection, than keycodes aren't the best solution anyways.

And this is another problem with keys, since quite a few are just stored in the registry and checked against a hard-coded whitelist.

[Brezel]

ECJ is saying that concluding a licensing agreement constitutes a first sale within the meaning of the specific directive and a transfer of ownership to a copy of the program.

49      As the Advocate General observes in point 59 of his Opinion, if the term 'sale' within the meaning of Article 4(2) of Directive 2009/24 were not given a broad interpretation as encompassing all forms of product marketing characterised by the grant of a right to use a copy of a computer program, for an unlimited period, in return for payment of a fee designed to enable the copyright holder to obtain a remuneration corresponding to the economic value of the copy of the work of which he is the proprietor, the effectiveness of that provision would be undermined, since suppliers would merely have to call the contract a 'licence' rather than a 'sale' in order to circumvent the rule of exhaustion and divest it of all scope.

The judgement and opinion of AG are available here:
http://curia.europa.eu/juris/documents.jsf?num=C-128/11

[The Minsky Moment]

ECJ is saying that concluding a licensing agreement constitutes a first sale within the meaning of the specific directive and a transfer of ownership to a copy of the program.

49      As the Advocate General observes in point 59 of his Opinion, if the term 'sale' within the meaning of Article 4(2) of Directive 2009/24 were not given a broad interpretation as encompassing all forms of product marketing characterised by the grant of a right to use a copy of a computer program, for an unlimited period, in return for payment of a fee designed to enable the copyright holder to obtain a remuneration corresponding to the economic value of the copy of the work of which he is the proprietor, the effectiveness of that provision would be undermined, since suppliers would merely have to call the contract a 'licence' rather than a 'sale' in order to circumvent the rule of exhaustion and divest it of all scope.

Directive 2009/24 is a directive that requires that Member States "shall protect computer programs, by copyright, as literary works within the meaning of the Berne Convention for the Protection of Literary and Artistic Works"   That is, it is a copyright directive that enforces a treaty on the protection of IP.

Thus, the way I would read this as an Amerikanski lawyer is something like this:
An IP holder's rights in a copyrighted work are deemed extinguished upon first sale, and for the purposes of copyright law, "first sale" is defined to include software transferred via licensing, as well as outright sale.  The rationale is that doing otherwise would permit copyright holders to gut the first sale doctrine.

All fine and good.  But it sill leaves open the question whether the software manufacturer could still sue the purported transferor for violation of the terms of the licensing agreement as a matter of breach of contract, even if there is no copyright violation.

[Brezel]

All fine and good.  But it sill leaves open the question whether the software manufacturer could still sue the purported transferor for violation of the terms of the licensing agreement as a matter of breach of contract, even if there is no copyright violation.

I'm not familiar with IP law nor the reach of copyright or its exhaustion under national laws. The directive and the judgment seem to point to different directions. The directive in its article 8 explicitly mentions law of contract as not affected by its provisions. Art. 5 of the directive, stating exceptions in favor of the lawful acquirer begins with the words "in absence of specific contractual obligations".
The ECJ at para 84 holds the contractual term concerning non-transferability included in licence agreement as not applicable due to exhaustion of copyright. Allowing redistribution regardless of contract provisions and simultaneously holding the first right holder liable for breach of that contract would be somewhat contradictory.

ECJ only answers the questions concerning the interpretation of EU law  that are submitted to it by national courts. The question of liability of Usedsoft did not arise in the case as far as I can tell. So the possible unclarity is as expected.

It is noteworthy that the judgment was delivered by the Grand Chamber and that the judgment differed from advocate general's opinion. Quote from the AG:

99.     I do not consider that, as the legislation currently stands, the exhaustion rule, which is inherently linked to the right of distribution, can be extended to the right of reproduction. I am aware that confining the rule in this way only to copies materially incorporated in a data carrier after being downloaded from the internet will severely limit its scope in practice but, although justifiable on grounds of the need to preserve the effectiveness of the exhaustion rule and to give precedence to the free movement of goods and services, the converse solution, which would have the effect of widening the scope of the exhaustion rule beyond that envisaged by the EU legislature,     (46)    cannot, in my view, be adopted without jeopardising the principle of legal certainty, which requires the rules of EU law to be foreseeable.