EU court upholds ability to sell used software licenses

[deanb]

The cases is Oracle versus "UsedSoft", but essentially it applies to any company selling goods "tangible or intangible".

 

 

http://curia.europa..../cp120094en.pdf

 

Basically as I'm reading it any EULA that states you can't resell the software/license is null, and that to add it in a EULA is taking the piss as far as IP law is concerned and the only main clause is that the software is "made unusable" for the original purchaser. Aka you don't install your Steam games to your PC if you're selling your account.

 

Could be a bit of a game changer, could all get overturned down the road. I guess we'll see what happens next time someone tries to sell their Steam/Origin/XBL/PSN account.

 

It'd be neat if we had some kind of video game lawyer dude able to translate it all (Though tbh it seems pretty absent of legalese/latin)

[Thursday Next]

Ok, so here's how I see it.

 

What this ruling says

If a fictional game company "AE" were to become aware of you selling your account to another person in order to transfer your games to that person there is nothing AE can do about it. They cannot ban that account. They cannot take the person to court for a violation of their copyright (unless the person does not relinquish their access to the games upon transfer).

 

Why this doesn't matter on its own

To be practical, no one is going to do this. Firstly, unless you want to transfer an entire account you will have to set up a new account for every single game you want to transfer. That would destroy any community features, achievements, etc. And would be a total pain in the arse for the consumer. Secondly, it would require a phenomenal amount of trust between seller and buyer. Either the seller gives the buyer the account access and hopes that the buyer doesn't just change the passwords etc. Or the buyer gives the seller money and hopes that the seller actually transfers the account, that they account has not been banned for other stuff and that the game desired is on that account.

 

So right now, there is no practical impact for this except where the account has only one game and transactions are between friends etc.

 

What the ruling doesn't say

It does not say anywhere that AE have to help you sell your games on.

 

Why that is important

This is what is key. If AE can keep their systems as they are, then, as illustrated above, it's not really that big a deal. If the court decides that AE have to build systems to allow users to sell on digital content then they will have to give AE time to build such systems. That is, something that can delete the game from your system, revoke your access and spit out a code to redeem for access to that title which you can then pass on to a third party. That will give AE plenty of time to go from a pay up front client download model to a subscription based or streaming system.

 

Basically, this ruling is a pain in the butt cos it throws up some uncertainty, but all it is really doing is pushing subscription, microtransaction and streaming along even faster.

[fuchikoma]

While I'm all for systems that help collectors get out of print games and so on, I don't see that this will really facilitate that, since used downloadable game sales will surely rely on the same infrastructure as the first sale did. So with that unchanged... I'm not sure how I feel about the ruling. I don't think I oppose it, unless it starts to demand unreasonable additional development costs and security issues on the game distributor. I don't really see a reason to support it either though - I mean, used sales are worthless to publishers since they make nothing from them. On here, they could hypothetically be pressured into discounting their products when the service they provide is actually greater than if they were offering the product new, so that's not really right either.

 

So I was thinking: Even if they are forced to allow individual sales of used games, I don't see what would stop them from simply insisting that new games will be sold at 100% of the new price, plus whatever commission the user wants to make as profit. Possibly also plus a transfer fee of pretty much anything they decide on.

[excel_excel]

I don't know how to feel about this either. I just don't see it being implemented by Steam or other DL services. I mean it sounds like a revolutionary ruling but I just don't see Steam doing anything seriously about it.

[deanb]

There's nothing needed to be implemented. What's currently implemented is EULAs that state you can't sell your account. Within the EU that's not not true.

 

@Fuchikoma: I've no idea what you said. I think something was lost in translation here. This ruling wasn't made as a pro-publisher thing. And I don't get the whole "helping collectors get out of print games" bit. And especially not the last paragraph. A typo maybe? Cos of course new games cost 100% of new price. Did you mean used games at 100% price of new? Cos it's worth noting it's not up to the original distributor to set the price, they're not part of the sale anymore.

 

@Thursday: Sure in the future AE, Tap n GameHalt could change to streaming but licenses can still be transferred and it'll apply to older downloadable titles still. Also many people have wanted to do it, but fear of banned accounts stops it. Also there are a few folks out there with games saved to multiple accounts.

[CorgiShinobi]

Yeah, 'tis a bit weird considering there's not much structured around this ruling on "used" digital files.

 

James's (from Extra Credits) take on this:

European courts today ruled that digital property is still property and therefor consumers must be allowed to resell their digital goods. We're a long way from you being able to buy "used" games via steam (or simply buying games from other steam users) but it's an interesting precedent.

 

I feel like Valve would be amazingly smart just to offer you the option to "sell back" your games to them for some amount of Steam credit, thereby ensuring your continued purchasing from Steam and... I think I just talked myself into an episode.

[Mal]

Now that is an interesting idea. Selling back games to Steam for Steam credit but that can be a massive money pit. That sort of thing is just there to make consumers happy but the producers get nothing out of it much besides good customer relations.

 

I just don't see a used digital game scenario that will have the devs and publishers be happy. Used physical games already make publishers and devs realy aggitated but digital...

[fuchikoma]

@Fuchikoma: I've no idea what you said. I think something was lost in translation here. This ruling wasn't made as a pro-publisher thing. And I don't get the whole "helping collectors get out of print games" bit. And especially not the last paragraph. A typo maybe? Cos of course new games cost 100% of new price. Did you mean used games at 100% price of new? Cos it's worth noting it's not up to the original distributor to set the price, they're not part of the sale anymore.

 

It is a strange situation, but I could probably have been clearer. The part about getting out of print games would be a hypothetical reason to support used game sales. Generally apart from that, I side with the publishers in that since they won't see any profit from used sales, they should have no obligation to facilitate them. For used downloadable sales, it seems they'd have to put in more effort than usual to transfer from one account to another, but on top of that, they'd still have to provide the same hosting/download/account update service as if the buyer had bought it from them directly, but hypothetically, they'd see less or even no profit for it. That doesn't seem right to me.

 

So I was suggesting used sales at original price or higher. The thing is, in a system like this, you can't say the distributor isn't part of the sale anymore - they're always a part of it by design. Is it really not up to them to set the price? I don't think there's enough precedent for this kind of thing to be sure of that yet. So I was suggesting that unless it's specifically proscribed by law, the scenario could be: You buy a game for $5.99, but you want to sell it to a friend. The game distributor allows you to do this - for $5.99 - and just as required, it will be removed from your account and added to theirs. Their cut includes 100% of the original price since they're still providing 120% of the service, and if you want to actually profit from the sale, maybe you can add on up to 30% additional cost and convince them to pay it. After all, this isn't something the company would be doing to try to make a profit - it'd be something they'd implement to comply with onerous EU regulations.

[deanb]

I don't really see why the games industry thinks it's special in that it should apparently get a cut of used sales. My gran picks up books from charity shops, the authors don't see an extra penny from that sale. Nor does the director from the pre-owned DVD, or the singer of the second hand CD. Funnily none of them moan in the same way BG publishers do and thankfully I've yet to have to put a code into my blu-ray player so I could access scene 14 of the film.

 

Distributors would see no losses incurred than if I'd downloaded my games many times over than if I sold my account onto someone else and they downloaded the games too. I'm on a second desktop since my steam account started and picked up a netbook too, so my games have been downloaded a fair few times. It's taken account of in their budgets.

 

It also accounts for this too:

Therefore the new acquirer of the user licence, such as a customer of UsedSoft, may, as a lawful acquirer of the corrected and updated copy of the computer program concerned, download that copy from the copyright holder’s website.

 

Is it really not up to them to set the price?

Yep. that'd be the state of affairs.

that rightholder sells the copy to the customer and thus exhausts his exclusive distribution right.

 

Steam sells game to me. I now own the game. I can then sell said game on for however many pennies I want and Steam won't see an extra penny. Cos that's how it works.

 

Bleh, not "onerous" at all. Less effort is required since now they don't have to bother with banning peoples accounts. (Well, maybe ban the Americans that seem to think this EU ruling applies to them. US already has precedent on the matter and that is that a license is a license. Cannot be sold, you do not own intangible goods, the company that is selling it still owns it)

[fuchikoma]

I don't really see why the games industry thinks it's special in that it should apparently get a cut of used sales. My gran picks up books from charity shops, the authors don't see an extra penny from that sale. Nor does the director from the pre-owned DVD, or the singer of the second hand CD. Funnily none of them moan in the same way BG publishers do and thankfully I've yet to have to put a code into my blu-ray player so I could access scene 14 of the film.

That's not the argument I'm making at all though. It's not that they should automatically get a cut of the money for any used sales. It's rather that they should have no obligation to spend the smallest amount of their resources to assist people who are not profiting them at all. It's like the issue with online passes - if one customer sells a used copy to another without involving the publisher, fine, the publisher sees nothing and the user sells their property. If the second owner wants to play on the company's servers, they pay a small fee to justify it. Yes, the license would have allowed the original owner to be playing in their place, but that's not what actually happened - they stopped playing the game and sold it. I don't think any company assumes every copy sold will be owned by someone who never gets tired of their game. You can't just go to a buffet, eat until you're full and then tag the next person and let them start in your place.

 

Distributors would see no losses incurred than if I'd downloaded my games many times over than if I sold my account onto someone else and they downloaded the games too. I'm on a second desktop since my steam account started and picked up a netbook too, so my games have been downloaded a fair few times. It's taken account of in their budgets.

That's true, but comparably, a used DDL sale is still spending company resources on a non-customer. Considering the maximum possible application of this, it stands to reason that they'd get some sort of renumeration for it. It's fine if a few people do it, but what about when half of their downloads are for copies they don't get paid for? What about 3/4? The costs for hosting are vastly less than physical production, but the situation is analogous to having to mint new discs for every copy sold at GameStop (or... whatever used game chain dominates the market there, assuming one does?)

 

Is it really not up to them to set the price?

Yep. that'd be the state of affairs.

that rightholder sells the copy to the customer and thus exhausts his exclusive distribution right.

 

Steam sells game to me. I now own the game. I can then sell said game on for however many pennies I want and Steam won't see an extra penny. Cos that's how it works.

 

Maybe... I'm still not fully convinced it's free of loopholes to exploit. Regardless of whether the rightholder loses their legal exclusive distribution right, as an inherent property of the system, they physically maintain exclusive distribution capability. If they don't set the resale price, perhaps they could add a system access fee that they waive for original customers. Or maybe in the EU, your first 5 downloads will be free, but after that, they will cost a small fee.

 

The ruling also seems to apply very specifically to licenses for an unlimited period, so I wonder if this would even apply to a lot of games since we are essentially paying to make use of them until the publisher decides otherwise? Maybe this will hasten the transition of games into services rather than property? Maybe EU customers will start "buying" games on a 99-year lease?

Bleh, not "onerous" at all. Less effort is required since now they don't have to bother with banning peoples accounts. (Well, maybe ban the Americans that seem to think this EU ruling applies to them. US already has precedent on the matter and that is that a license is a license. Cannot be sold, you do not own intangible goods, the company that is selling it still owns it)

If it only goes so far as to say they cannot punish customers for buying and selling used copies, it's not so onerous. If it requires companies like Valve to reengineer the systems at the core of their business in order to facilitate transfer of goods, or hire people to manually override and manage software licenses... again, for free... then it would be quite onerous. Of course, it's a little hard to say how it will apply at this point since Oracle and Valve are so different - maybe they just have to allow the selling of whole user accounts as many have speculated, since it doesn't allow the resale of partial site licenses.

 

Standard disclaimer applies of course: I am not a lawyer, but Ethan is, and will probably drop by to shoot this full of holes eventually. But hey, it's discussion.

[deanb]

The extra downloads are included in the license that is sold. Which means they apply to the second customer as much as the first. Yes in retaliation Steam, Origin etc could go back to the olden days of single downloads, but it'd kinda kill one of their main selling points. And as I said before, their pricing take into account the multiple downloads (don't forget many games sell for the same price as physical copy, without the cost of disc printing, logistics, delivery, shelving and other overheads)

 

Given that the distribution company isn't part of the second sale how would they know to be able to charge a fee for the second company. I'm pretty sure the ruling would actually say that's not allowed too. Especially since charging a fee to allow people t5o sell their games on would be getting in the way of the process.

 

Pretty much every game sold is "forever" on services like Steam. Even when the publisher pulls the game, like EA with Crysis 2, it's still available to the people that had already bought the game, so it'll still be around for the second purchaser too.

 

Also the ruling doesn't require the companies to do anything except not ban people from selling their digital products on. If they wish to provide features that facilitate the sale of games then it's up to them.

 

Thrusday is also a lawyer too. A VG lawyer. (I think Ethan is in property)

[Thursday Next]

VG means "Very Good".

 

Early analysis suggests that the situation is even less of an issue (for Publishers). The German courts recently held in what's colloquially known as the "Half-Life 2 Decision" (http://www.lexology.com/library/detail.aspx?g=ae91fb8c-a811-43d4-9b4d-995ba41242d5) that:

 

1. It is legal to bind a copy of game to a particular account.

2. It is legal to state in T&C's that user accounts are non-transferable.

 

So what this means is that you can sell your 1's and 0's to someone else, provided you delete them from your PC. They can then copy those 1's and 0's to their PC. Valve and EA and so on can still ban you for transferring accounts and without transferring accounts the software you sold is useless.

[MasterDex]

VG means "Very Good".

 

Early analysis suggests that the situation is even less of an issue (for Publishers). The German courts recently held in what's colloquially known as the "Half-Life 2 Decision" (http://www.lexology....4d-995ba41242d5) that:

 

1. It is legal to bind a copy of game to a particular account.

2. It is legal to state in T&C's that user accounts are non-transferable.

 

So what this means is that you can sell your 1's and 0's to someone else, provided you delete them from your PC. They can then copy those 1's and 0's to their PC. Valve and EA and so on can still ban you for transferring accounts and without transferring accounts the software you sold is useless.

 

Is that not exclusive to Germany though? Surely since it was in the German courts rather than the EU courts, it would just act as precedence in Germany, as a national level ruling whereas the EU court ruling would take precedence elsewhere in the union where a decision like the one made in Germany was never made.

[Thursday Next]

National courts can make decisions that have an EU effect. Most cases on EU law are held in national courts. Relatively rarely do they go up to the EUCJ.

 

The Half Life 2 ruling was made by the highest court in Germany. That makes it a precedent in EUCJ. The new EU ruling does not contradict the previous German ruling. They sit alongside each other. If the Court sought to overturn Half Life 2 they would have said so.

[deanb]

btw the link you gave is something I assume you have a subscription to, cos it's just a headline and single sentence for me.

[Thursday Next]

How bizarre, it worked fine yesterday. I'm not subscribed to it.

[excel_excel]

There's nothing needed to be implemented. What's currently implemented is EULAs that state you can't sell your account. Within the EU that's not not true.

 

What I mean implemented is a selling option for games on your Steam or DL service of your choice. Maybe a trade in option directly to Steam, eventually, but I can't seem them implementing directly selling games across accounts.

[MasterDex]

There's nothing needed to be implemented. What's currently implemented is EULAs that state you can't sell your account. Within the EU that's not not true.

 

What I mean implemented is a selling option for games on your Steam or DL service of your choice. Maybe a trade in option directly to Steam, eventually, but I can't seem them implementing directly selling games across accounts.

 

Why not? With enough thought behind it, it could be profitable for everyone. For instance, Steam could add a trading function to Steam that allows any owned game to be traded in for Steam credit, adding a limitation of a year in which it can't be sold, to placate the developers and publishers. The game would then be put in a used bin, priced at a percentage of the game's current price, which would be more than the credit the trader got, where other Steam customers could pick it up. Granted, there's the other logistics to consider but I do see it as a possibility.

[fuchikoma]

A huge number of people have asked them to transfer games from account to account or merge accounts. For instance, I forgot everything about my original account, but had to make one to play Orange Box. Later, I remembered the old account info. They always refuse to transfer or merge though - always. It doesn't matter if you can prove ownership of both sides, or if you're ok with one account being completely deactivated, it's just something they won't do.