EU Proposes Law Requiring Resale of Digital Games

The European Union's Court of Justice has ruled that consumers within the EU can legally resell downloaded games and software, overruling restrictions in End User License Agreements (EULAs). This decision stems from a legal dispute between UsedSoft and Oracle, establishing the principle of exhaustion of distribution rights. Once a copyright holder sells a copy granting unlimited use, the distribution right is exhausted, enabling resale.

This applies to games purchased on platforms like Steam, GoG, and Epic Games. The original purchaser can sell the license, allowing a new buyer to download the game. The ruling clarifies that the seller must render their copy unusable upon resale to avoid copyright infringement.

The court's decision acknowledges that while the distribution right is exhausted, the reproduction right remains. However, reproduction is permissible for the lawful user's intended purpose; a new buyer can download the game to use it. This means that while the original owner can sell the license, they cannot continue to use the game after the sale.

Importantly, the ruling does not extend to backup copies. The court maintains that reselling backup copies remains prohibited.

This decision significantly impacts digital distribution models, although practical implementation and the lack of a formal resale marketplace present challenges. The ruling clarifies the legal landscape in the EU regarding the resale of digital goods, but leaves some practical questions unanswered.