In 2013, The Federation of German Consumer Organizations (VZVB) challenged Steam’s policy of attaching each game purchase to a particular account. VZVB wanted Steam users, primarily those in Germany, to be able to sell or share their games. Valve’s Steam terms of service explicitly forbid the sale or transfer of games. The court specifically differentiated between a Steam sale and a naked license. VZVB had attempted a similar challenge in 2010, which was dismissed at the time, but a recent decision out of the Court of Justice of the European Union, ruling that used software licenses are legal, fueled their second attempt. Sadly, their efforts were misplaced and the German court ruled that Steam can limit resale of products.
The case that fueled VZVB’s second attempt involved Oracle. Europe’s highest court found that software developers have no right to block the sale or transfer of “used” licenses. The court’s reasoning turned on the idea that the right to control distribution is exhausted in the first sale, known as the First Sale doctrine. The court determined that the resale of software licenses is comparable to the resale of a physical product, like a software CD; but, this reasoning only applied if the original copy was made unusable at the time of sale and the license was sold as a whole. The court specifically ruled against the ability to sell license piecemeal if, for example, they purchased licenses for more users than necessary.
The US has also ruled on the legitimacy of reselling content online, but to opposite effect. In US District Court, ReDigi, a company that resold “used” MP3s online, was found to be infringing the copyrights of the artists. ReDigi created a monitoring system to ensure that users selling files removed those files from their own system at the time of sale. The court, however, found that there was still a reproduction, since the file that the buyer received was not identical to the one formerly held by the seller; it was copied between the hard drives and is therefore new material. The court used similar logic, the idea that no transfer is being made but that the content is being copied, to remove digital goods from the realm of First Sale. Under this ruling, the only way to transfer digital goods is attached to their original state; selling your hard drive.
Another US District ruling, Autodesk, further clarified that the resale of goods sold under the terms of an EULA constitute a sale with restrictions on use. However, the court differentiated between sales and licenses, particularly as applies to different types of goods. For physical goods, even where the EULA limits transfer, the goods were deemed sold and could be resold.
Almost every game sold in the US, for PC, phone, or console, is licensed not owned. Even if a player buys a physical copy of a game, the player only owns that Disk and not the game itself. While this is usually a non-issue, it was dragged to the fore when Microsoft announced that Xbox One games would not be able to be shared or traded. While they backpedaled shortly thereafter to a chorus of angry gamers, the incident highlighted the power inclusive in never letting players own their games. The terms of the license for each game are contained in the Terms of Service (TOS) or End User Licensing Agreement (EULA); both of which function to limit what can be done with a particular piece of software.
EULAs grant the obvious: the player can use the software; and, from there, limit the software use and ownership as appropriate for the goals of the product. Some use happens locally, through the disk or an installed copy, while other types of use rely on the player accessing remote servers or connections. While this often makes little difference to the player, it impacts the enforceability of the EULA terms. It is much simpler to deny a player access to my servers then to convince them to remove my software from their hard drive. Some EULAs explicitly grant the rights of resale or transfer, some are silent on the issue, and others prohibit it. Most allow archival copies or back-ups, so long as these conform to whatever other limitations are set.
The contract is often only available in electronic form and presented to the user at the time of installation. Assent to the EULA is typically the only way to install the software. Beyond the restrictions on copying and transfer, these agreements usually include clauses about product liability and reverse engineering. The product liability is usually limited to the cost of the software, with no additional damages. Reverse engineering clauses are somewhat self-explanatory; licensors don’t want the inner workings of their software revealed. Some EULAs include limits on how you can litigate with the licensee. This includes limitations on forum and other restrictions, for example, you may only be able to arbitrate your case in California.
In the US, agreement to a contract comes with the assumption that you’ve read and understood it. This is clearly not the case with EULAS. The courts are inconsistent on whether or not an EULA can be enforced, and none have offered a broad decision, instead releasing only rulings on particular terms. Regardless of enforceability, you usually can’t use the software without agreeing to the EULA. Even if a clever user can bypass the EULA without assent, most programs include use of software as a definite indication of agreement to the terms.
Notwithstanding anything in an EULA, players can resell physical media, such as game cartridges or disks. The sum of these factors can indicate any number of things. Given the backlash for Microsoft’s move to block the sale or transfer of physical licensed media, the secondary market will likely not disappear. However, Steam, Xbox Live, app stores, and other online markets created a different set of rules and fostered different expectations from their inception. While their content is often licensed in much the same way as physical media, they have created far more significant limitations on how their products can be transferred, both in the US and abroad. With the shift to primarily digital distribution, the inability to resell purchased games may become a thing of the past, but does it matter? With an aging gaming audience, with more disposable income, the need to share or resell games may be becoming a token of our collective childhood.