Steam, GoG and Others Must Allow Reselling of Downloaded Games in EU

EU Court Sanctions Resale of Downloadable Games

The Principle of Exhaustion and Copyright Boundaries

The Court of Justice of the European Union (CJEU) has made a groundbreaking decision that allows consumers to resell previously purchased and downloaded games and software. This ruling stems from a legal dispute between software reseller UsedSoft and developer Oracle, which was initially contested in German courts.

The CJEU's decision hinges on the principle of exhaustion of the distribution right, also known as the Principle of Exhaustion of Copyrights. According to this principle, once a copyright holder sells a copy of their work and grants the customer the right to use it indefinitely, their exclusive distribution right is considered exhausted. This means the original purchaser can resell the license, enabling another person to download the game from the publisher's website.

This ruling applies to consumers across all European Union member states and includes games purchased through platforms such as Steam, GoG, and Epic Games. The CJEU'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 process might involve the original buyer providing a code for the game's license and relinquishing access upon resale. However, the lack of a defined marketplace or system for these transactions poses significant challenges and leaves many questions unanswered, such as how the transfer of registration would be managed, especially since physical copies remain registered under 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's ruling overrides these restrictions within the European Union. While consumers gain the right to resell their digital games, there is a crucial limitation: the seller must cease playing the game 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 CJEU also addressed the issue of reproduction rights, stating that while the exclusive right of distribution is exhausted, the exclusive right of reproduction remains intact. However, it is subject to "necessary reproductions for the lawful acquirer's use." This means that any subsequent buyer of a copy with an exhausted distribution right is considered a lawful acquirer and can download the copy sold to them by the original buyer. Such downloads are deemed necessary reproductions to enable the new acquirer to use 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's important to note that the CJEU has ruled that backup copies cannot be resold. Lawful acquirers are prohibited from reselling backup copies of computer programs.

"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.