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Thread: EU Court of Justice Rules Digital Resale Bans Illegal

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    Default EU Court of Justice Rules Digital Resale Bans Illegal

    Interesting news story I saw on another forum, here.

    Crikey: EU Rules You Can Resell Downloaded Games

    Well here’s some pretty huge news. The Court Of Justice of the European Union has just ruled that people should be able to resell downloaded games. In an environment where publishers are trying to destroy basic consumer rights like the ability to resell physical products you’ve paid for, this could be one heck of a turnaround for customers. And that’s no matter what it might say in the EULAs. This could have absolutely enormous implications on how services like Steam, Origin, GamersGate and the like work, and finally restore some rights back to the gamer.

    The draconian and almost inevitably unenforceable rules we all pretend we’ve read and agreed to whenever we buy an online game are packed with ridiculous attempts to remove our rights of ownership. At best, when those rules are held to their letter, we’re long-term renting the games, with no rights to protect their being taken away from us at any point. So a ruling saying we have enough ownership that we can actually sell them on to others is a massive difference. Of course, it does ask one rather huge question: Er, how?

    The preliminary ruling states,

    “The first sale in the EU of a copy of a computer program by the copyright holder or with his consent exhausts the right of distribution of that copy in the EU. A rightholder who has marketed a copy in the territory of a Member State of the EU thus loses the right to rely on his monopoly of exploitation in order to oppose the resale of that copy… The principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD) but also where he distributes them by means of downloads from his website.”


    This was a result of software developers Oracle taking German company UsedSoft to court for reselling licenses to Oracle products. However, after reaching the European Court, a surprise blow came against the big publisher. And it has massive implications for all of online purchases, including games bought from places such as Steam, Origin, GamersGate, etc. And even further implications for those publishers attempting to ban the far more commonplace reselling of boxed products too.

    The specific rule seems to be that if a license is sold indefinitely – i.e. not a license for a year, or similar – that the rightholder “exhausts his exclusive distribution right”.

    “Such a transaction involves a transfer of the right of ownership of the copy.”

    That sentence is a really massive deal. It’s the very first time there has been any official sense of ownership via digital distribution, and if it gets implemented by courts, it’s going to change a great deal. From our having the legal right to sell games in our Origin accounts, right down to surely taking away the ability for companies like Valve and EA to block customers’ access to their purchased games for other infractions.

    Right now we have companies like Microsoft and Sony looking for ways to make reselling of their products impossible for their next generation of consoles, and presumably relying heavily on the perceived redundancy of the argument if those games were purchased online (as surely the next gen consoles will want to focus on). But pow, maybe not. With a ruling that states,

    “The Court observes in particular that limiting the application of the principle of the exhaustion of the distribution right solely to copies of computer programs that are sold on a material medium would allow the copyright holder to control the resale of copies downloaded from the internet and to demand further remuneration on the occasion of each new sale, even though the first sale of the copy had already enabled the rightholder to obtain appropriate remuneration. Such a restriction of the resale of copies of computer programs downloaded from the internet would go beyond what is necessary to safeguard the specific subject-matter of the intellectual property concerned.”

    This whole deal just got an awful lot more interesting. It appears to be directly stating that it is inappropriate for copyright holders to insist on the right to be remunerated with every re-sale, which could even have legal implications for the current systems various console publishers have introduced, forcing pre-owned customers to pay a tithe before the game will work properly.

    The ruling also makes it clear that if someone does resell a digital copy of a product, they must remove their version of it from their computer – because at that point it does become a copyright violation, as it’s become a reproduction, not a resale. But fascinatingly, it adds, “However, the directive authorises any reproduction that is necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose. Such reproduction may not be prohibited by contract.” What does that mean for the current exploits publishers are using, too? Could they now be illegal?

    How companies like Steam, EA, etc will react will be very interesting. Their current infrastructures certainly don’t support reselling, and they’d probably ban your account if they caught you trying to. This is a ruling whose implications could stretch a very long way. There are bound to be challenges to the ruling made, and we can assume this one will stay in courts for a good while longer.
    In other words, every digital distribution vendor in existence right now, from GoG.com to GamersGate to Origin to Steam, is looking at some interesting implications if this ruling holds up, at least, if they want to continue business in Europe. That's especially true for Steam, which has a history of banning users if they think they're reselling licenses. Of course, they might decide to work around it by region-locking based on IP or registered nation, but either way, it could be interesting.

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    It would be awesome if this held up.

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    Read it earlier today, pretty interesting. They will have to set a way for us to be able to sell our digital items, no idea how are they going to do it..

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    It appears to be directly stating that it is inappropriate for copyright holders to insist on the right to be remunerated with every re-sale, which could even have legal implications for the current systems various console publishers have introduced, forcing pre-owned customers to pay a tithe before the game will work properly.
    that right there sounds like the courts against that new possibility of the next-gen of consoles being able to lock out resale copies of games. if thats true then that alone sounds like very good news to me

    that could've possibly removed renting as a possibility for the next generation of games/consoles.

    overall though, thats some interesting news for gamers.

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    Euros take the lead!

    Quote Originally Posted by Cookie Monster View Post
    no idea how are they going to do it..
    wut. there are tons of ways. First off they could require online sales services to implement a feature in their service if they want to continue operating in europe.

    Or they can make simple rules: like you can copy your downloaded game on a disc and sell it to someone, or you can let them download it from your computer directly via P2P and the like, and it wouldn't be copyright infringement if you destroy your own copy of the game after the sale. It would be same as the software backup rule that is in place now: you can have backups as long as you destroy the original item when you start using them.

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    I think it'd be pretty simple to do with Steam, at least. Since you have to run the Steam client to play, all they have to do is add an option to deactivate the license. Then the license will show up in your gift inventory and you can give it away or sell to someone else. Sure, you could get around it by staying in offline mode, but that defeats a lot of the purposes of having a game on Steam.

    If you've ever used multiple Steam accounts on one computer, you know that games for other accounts either don't show up in your list, or show up as demos. So the same would probably happen after you've deactivated a game on your account.

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    What would happen to Steam sales when the market has a lot of users reselling games? While it's the same concept as reselling physical copies, it's so much different when it's localized so strongly through one distributor. Both Steam and all the companies using them for distribution would risk heavy financial losses. Their smartest bet is to turn all future sales into, "Infinite Rentals" with an agreement that you can keep the game for as long as you wish, but Steam still owns rights to the files.

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    Quote Originally Posted by gezegond View Post
    Euros take the lead!



    wut. there are tons of ways. First off they could require online sales services to implement a feature in their service if they want to continue operating in europe.

    Or they can make simple rules: like you can copy your downloaded game on a disc and sell it to someone, or you can let them download it from your computer directly via P2P and the like, and it wouldn't be copyright infringement if you destroy your own copy of the game after the sale. It would be same as the software backup rule that is in place now: you can have backups as long as you destroy the original item when you start using them.
    I wasn't referring to PC games

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    Quote Originally Posted by Mao-nax View Post
    Uhhh... ?
    Think XBLA games. Or whatever the equivalent is on the PSN store.
    Last edited by Colamisu; 4th-July-2012 at 02:13.

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    still not gonna male me go digital but its better than nothing i hope

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    Quote Originally Posted by Soylent Green View Post
    What would happen to Steam sales when the market has a lot of users reselling games? While it's the same concept as reselling physical copies, it's so much different when it's localized so strongly through one distributor. Both Steam and all the companies using them for distribution would risk heavy financial losses. Their smartest bet is to turn all future sales into, "Infinite Rentals" with an agreement that you can keep the game for as long as you wish, but Steam still owns rights to the files.
    Yeah, how could they possibly earn their money without ripping us off? You do have a point there.

    Quote Originally Posted by Cookie Monster View Post
    I wasn't referring to PC games
    Quote Originally Posted by Colamisu View Post
    Think XBLA games. Or whatever the equivalent is on the PSN store.
    wut. Both the options I provided can be implemented on consoles just as easily as on PC. The only thing that makes consoles different is that they're locked, as in they have DRM that stops you from directly accessing your files, and they probably won't be able to do that under this law. Either that or they have to implement a resale feature. Tis pretty simple.

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    Quote Originally Posted by Colamisu View Post
    Think XBLA games. Or whatever the equivalent is on the PSN store.
    Good to see someone understood it.

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    heres the thing though... if you can buy USED Digital games... why would you buy them new? its not like they can get scratched or dirty

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    Quote Originally Posted by Jack Spicer View Post
    heres the thing though... if you can buy USED Digital games... why would you buy them new? its not like they can get scratched or dirty
    Well you'd have to find someone that has a used digital copy for sale. I do think it will impact profit margins pretty good though, what's the point in keeping a digital copy after you have gotten all you want out of the game?

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    Quote Originally Posted by Mao-nax View Post
    I don't know why anyone bothers buying digital copies new, they're the same or slightly less than a physical copy.
    Yeah I don't get it either. HURRRR huge Steam sale! Uh okay? So the games are more inline with internet prices on physical copies? That's cool.

    The only reason I can see for getting them is if you don't have easy access to physical copies but still want to support the companies by buying games new.

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