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

The European Union's Court of Justice has ruled that consumers within the EU can legally resell downloaded games and software, despite any restrictions in End-User License Agreements (EULAs). This decision stems from a legal dispute between UsedSoft and Oracle, and hinges on the principle of exhaustion of distribution rights.

Exhaustion of Distribution Rights and Copyright:

The court's ruling centers on the principle that once a copyright holder sells a copy of software and grants the user unlimited usage rights, the distribution right is exhausted. This allows for resale. This applies to games and software purchased through platforms like Steam, GoG, and Epic Games. The original purchaser can sell the license, enabling a new buyer to download the game.

The court's decision explicitly states: "A license agreement granting the customer the right to use that copy for an unlimited period...the 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."

The practical application involves the original buyer transferring the license code, losing access themselves upon resale. However, the lack of a formal resale marketplace creates complexities. Questions remain regarding account transfers, especially since physical copies remain registered to the original owner.

Restrictions on Resale:

While resale is permitted, the seller must render their copy unusable upon sale. Continuing to use the software after resale constitutes copyright infringement. The EU court clarifies: "An original acquirer...must make the copy...unusable at the time of resale. If he continued to use it, he would infringe the copyright holder’s exclusive right of reproduction..."

Reproduction Rights and Necessary Copies:

The court acknowledges that while distribution rights are exhausted, reproduction rights remain. However, these rights are limited to reproductions necessary for the lawful user's intended purpose. This allows for the download by the new purchaser. The court states: "...any subsequent acquirer...constitutes such a lawful acquirer. He can therefore download...the copy...Such a download must be regarded as a reproduction...necessary to enable the new acquirer to use the program..."

Backup Copies:

Importantly, the resale of backup copies is prohibited. The CJEU's ruling in Aleksandrs Ranks & Jurijs Vasilevics v. Microsoft Corp. confirms this restriction.

This ruling significantly impacts digital distribution platforms and clarifies the legal landscape for resale of digital goods within the EU. However, practical implementation and the creation of a robust resale market remain challenges.