European Court Rules End Users Actually Do Own Software

By: Stephen Crane

In a fascinating turn of events, a European court ruled today that users have every right to resell software licenses: even downloaded ones.  That means there is no legal reason why users shouldn't be allowed to resell their product codes.

A lot of this has to do with End User License Agreements which I previously wrote about. Essentially, most EULAs have a caveat that allows developers to retain ownership. People who purchase a program are only purchasing permission to use the code, and that permission can be revoked at any time. It's rather sneaky, and something end users have fought over for a while.

The court case, Oracle v. UsedSoft was settled today after the Court of Justice of the EU stated first sale doctrine applies to physical and downloaded copies of software. First sale doctrine means copyright holders only have control over the first sale of an item. They can sell it to "Joe", but they can't stop Joe from reselling it to Cathy. This is what allows for a used CD and used game market.

First sale doctrine got murky with software, however, because digital downloads have no physical counterpart to sell or resell. Also consider the use of CD keys that can register to a specific computer or hardware configuration. End User License Agreements would also state that the license to use a product is non-transferable, which is fancy legal jargon preventing resale.

According to the top EU court, however,

"It makes no difference whether the copy of the computer program was made available by means of a download from the rightholder’s website or by means of a material medium such as a CD-ROM or DVD. Even if the rightholder formally separates the customer’s right to use the copy of the program supplied from the operation of transferring the copy of the program to the customer on a material medium, the operation of downloading from that medium a copy of the computer program and that of concluding a license agreement remain inseparable from the point of view of the acquirer." 

There are some caveats to the ruling, though. End users are not allowed to sell parts of a multi-user license, and by the time of the sale the end user must render their version inoperable. This would be hard to enforce in practice, but not impossible.

Further, there aren't exactly systems in place to allow digital resale. Eurogamer notes,

"The two biggest digital games platforms, Steam and Origin, currently do not facilitate this, and there is no directive in the ruling forcing Valve and EA to do so. But Sulyok believes all it will take is for one consumer to enforce his right to the resale of a game - and thus be required to make his copy unusable - for the two heavyweight companies to be triggered into action."

Expect a future court battle or two to arise in the future if Steam or Origin doesn't facilitate resale. Hopefully they won't follow the Gametop model and create their own pre-owned problem. As it is, many developers and publishers are wary of the PC platform, and a lack of a used games market is considered a bonus in their eyes.

Another option for European gamers is to head over to Green Man Gaming which already allows and encourages reselling used digital titles. They appear, at least on a surface level, to get along with most of the developers, and are selling plenty of AAA titles. If they gain a larger marketshare, this may encourage the big two to compensate.

While European gamers will be enjoying the ruling, that still leaves us gamers across the pond a little high and dry. Hopefully if/when Steam and Origin come around to the idea of used digital games, the same systems will be implemented across the board. Otherwise, each country may have to wait for its own lengthy court battle. 

If courts do take the concept of consumer ownership of software seriously, this may even have deeper repercussions for the software modding scene. What happened with Hotz and the PS3 may have been resolved differently, or may have to be re-addressed.

Unfortunately, it's hard to tell exactly what this will mean for the future, but this could be a game changer for consumer-developer relations.

Comments

[Rasor]

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