The EU Court Rules Downloadable Software Can Be Resold

4 July 2012

Court Of Justice of the European Union:

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.

The ramifications of this are quite incredible. Notably game companies, who have shifted to digital distribution to shut down the aftermarket sales, are undermined.

I’m not quite sure how DRM factors into this, but seemingly this ruling overrides any attempt by software publishers to prevent resale. This includes the App Store; this judgement gives people the right to sell their iOS apps on to other people.

The level of compliance necessary by software publishers seems undefined, at the current stage. For example, do Steam or Apple have to implement features in their stores to allow resale? Or is it implicit – people are allowed to resell digital goods if they can crack the DRM and associated policies surrounding it?

This is a very interesting decision, with wide-reaching implications. Therefore, there are probably a million companies ready to oppose it. Bring on the appeals …