Secondhand Software

RockPaperShotgun recently reported on a ruling by the Court of Justice of the European Union explicitly stating that any company that sells software transfers the right to distribute that software to the customer upon completion of a transaction. The ruling was summarised in a freely downloadable press release (PDF) which says:

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 prohibits a further transfer, the rightholder can no longer oppose the resale of
that copy.

A screenshot of some of the games in my Steam collection.

If you don’t know much about how software sales through services like Steam and Origin have worked up until this point, you might not fully grasp the enormity of the ruling, but this is huge news for anyone who’s ever bought software from a central service. RockPaperShotgun were, understandably, focusing on what this meant for the companies involved in videogames sales, but this also applies to online software stores like Apple’s App Store and Google Play. It means that any downloadable software is yours to resell, thus meaning that the second-hand market for videogames will continue to be alive and kicking1. Another excerpt says:

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.

The point I want to make is that this ruling is, potentially, not just exciting for people who have bought software. I can’t see any reason why the ruling above would not also apply to, say, music that’s downloaded from the Internet instead of sold on CD. Or perhaps to books sold online instead of on dead trees. If I’m correct, then companies that offer downloaded content have to allow customers to transfer their purchases to other users in exchange for a fee from the other user.

It goes without saying that this may not be a system set up by the companies themselves. I highly doubt that there are suddenly going to be tools built into iTunes that facilitate the creation of a second-hand sales channel, for instance. However, according to this, tools will have to be introduced to allow users to transfer books purchased under one iTunes account to another one:

Furthermore, the Court states that an original acquirer of a tangible or intangible copy of a
computer program for which the copyright holder’s right of distribution is exhausted must make
the copy downloaded onto his own computer unusable at the time of resale. If he continued
to use it, he would infringe the copyright holder’s exclusive right of reproduction of his computer

If the original acquirer is no longer allowed to have a downloaded copy, they cannot sell a copy to a friend and just send that friend an email attachment; they must no longer be able to read the copy in question. This would mean that the user would, presumably, no longer be allowed to download that book from the iBookstore and thus it would need to be transferred to another account. I can’t imagine the publisher being happy with the original user re-downloading content they have sold to a third party, either.

One of the problems I’ve heard people espouse with electronic media is the death of secondhand markets for various things. I often find gems in various shops that resell old stuff, and I admit that I would be sad to see this go. Another important aspect of the secondhand is the charity shops (or, if you’re not from around here, thrift stores) that rely on secondhand goods to work. Although I think they’re still safe for the time being, it is nice to see that, in Europe at least, those who like to buy secondhand will still be able to do so even in this modern and electronic age.

  1. At least, it will be when companies implement this functionality and allow for the transfer of apps between different users’ accounts — whether this will be something that is quickly implemented, or whether it will have to wait for a European court case, is yet to be seen. 


  • Fred

    4th July 2012 at 11:44

    In the initial quote it mentions having access for an unlimited period, I wonder if companies will move to a subscription based service to get around this?

    It may just me being dense but where does it imply that companies will have to facilitate the transfer between accounts?

  • John Coxon

    4th July 2012 at 11:51

    They don’t have to. If they don’t, it means that both the original purchaser and the secondhand purchaser have access to that download; I can’t imagine most sales companies being okay with that kind of product duplication.

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