EU court rules software downloads can be resold


— 6:00 AM on July 5, 2012

Is your Origin folder overstuffed with games you don't play anymore? Did you get carried away during the last Steam sale and end up with a huge number of titles you'll never have time to sample? The Court of Justice of the European Union says you should be able to resell those games. Indeed, the court thinks consumers should be able to resell any software they buy, regardless of whether it was purchased on physical media or in downloadable form.

The judgment is related to a case involving UsedSoft, a company that resells Oracle licenses acquired from previous owners. Oracle tried to bar UsedSoft from flipping licenses, and it doesn't look like the court was convinced. The full ruling can be found here, but the official press release (PDF) is a little easier to digest. Rather than trying to parse the legalese, I'll cut and paste:

Under that directive, 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. In the present case, Oracle claims that the principle of exhaustion laid down by the directive does not apply to user licences for computer programs downloaded from the internet.

By its judgment delivered today, the Court explains that 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.

Where the copyright holder makes available to his customer a copy – tangible or intangible – and at the same time concludes, in return form payment of a fee, a licence 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. Such a transaction involves a transfer of the right of ownership of the copy. Therefore, even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.

Looks like a bunch of EULAs just lost their teeth, at least in the EU. There are some limits, of course. Multi-user licenses can't be split and sold separately. Anyone who resells software must remove it from his computer, as well. It also looks like the ruling is restricted to "unlimited" licenses; those that run out after a specific period of time may not be eligible for resale.

Obviously, the ruling applies only in the EU. I'm not sure whether it's subject to appeal, but the judgment is nonetheless encouraging. The implications could be pretty far-reaching considering how much software is distributed online. Let's hope it doesn't lead developers offering their wares as time-limited services, though. Thanks to Rock, Paper, Shotgun for the tip.

   
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