The Court of Justice of the European Union (CJEU) has made a landmark decision that empowers consumers within the EU to resell their previously purchased and downloaded games and software, overriding End User License Agreements. This ruling is poised to reshape the digital marketplace landscape. Dive in to understand the implications of this significant decision.

EU Court Sanctions Resale of Downloadable Games

The Principle of Exhaustion and Copyright Boundaries

The CJEU's ruling stems from a pivotal case between software reseller UsedSoft and developer Oracle in German courts. The court introduced the principle of exhaustion of the distribution right, also known as the Principle of Exhaustion of Copyrights. This principle asserts that once a copyright holder sells a copy and grants the buyer an unlimited right to use it, their distribution right is exhausted. Consequently, the buyer is free to resell that copy.

This ruling extends to EU member states and includes digital games acquired via platforms such as Steam, GoG, and Epic Games. The original purchaser can sell the game's license to another individual, who can then download the game from the publisher's website.

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 original buyer would provide a code for the game's license and must forfeit access upon resale. However, the lack of a standardized marketplace or system for these transactions poses practical challenges and leaves many questions unanswered, such as how the transfer of registration would be managed, particularly since physical copies remain registered to the original owner's account.

Reseller Cannot Access or Play the Game Upon Resale

Despite publishers' efforts to include non-transferable clauses in user agreements, the CJEU ruling overrides these restrictions within EU member states. However, there is a significant caveat: the seller of the digital game must relinquish access upon resale.

The CJEU states, "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 has clarified 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 means that subsequent buyers are permitted to download the game onto their computers for use as intended, and no contractual terms can impede this.

The CJEU emphasized, "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."

Restriction on the Sale of Backup Copies

One key limitation highlighted by the CJEU is that backup copies of computer programs cannot be resold. The court ruled, "Lawful acquirers of computer programs cannot resell backup copies of the programs," in the case of Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp.

This groundbreaking decision by the CJEU opens new avenues for consumers in the EU, allowing them to resell their digital games and software, albeit with certain restrictions and complexities that need to be navigated.