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European Court: Used software licenses may be resold. (translate.google.com)
160 points by kleiba on July 3, 2012 | hide | past | web | favorite | 70 comments

Holy... mother... of... god...

I know, this isn't the most insightful comment, but I can't see this NOT having a huge impact on the software industry.

I don't know why you focus on STEAM, this could touch iPhone / iPad / Android apps as well.

The posted article lacks a lot of details. According to a more comprehensive one[1] (german as well):

- The court has ruled that reselling doesn't violate copyright, but nothing prevents a software vendor from forbidding the reselling in it's license. The court didn't force vendors/service providers to permit reselling.

- The court has not demanded that vendors enable the reselling technically.

- The court has limited its ruling to computer programs, and excluded media like ebooks, video, music and the like.

So in effect, this will change: Software vendors will have to change their licenses to prevent reselling.

[1]: http://www.heise.de/newsticker/meldung/EuGH-Klares-Ja-zum-We...

I read the actual ruling, or at least the official English translation of it[1].

While I'm not a lawyer, it seems abundantly clear that the court considered taking money for a permanent licence to be a sale. That brings first sale rules into the picture, for example, "[t]he first sale in the Community of the original of a work or copies thereof by the rightholder or with his consent exhausts the right to control resale of that object in the Community."

Oracle's licence agreement did clearly say that the licence was non-transferrable, and they lost.

[1] http://curia.europa.eu/juris/document/document.jsf?text=&...

Exactly that is what is forbidden, by my reading. From the press release:

  Therefore, even if the license agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.
As to copyright, it merely stated that on resale, the making of a digital copy cannot be prohibited, but the seller's copy must be rendered unusable.

I would imagine that this may require the licence legal text to be rewritten, but not much else would change. Instead of selling a license to use, you sell some sort of authentication service. So that when the actual right to use is transferred, the new owner would need to pay for the authentication service.

As for Valve, they are moving strongly to the free-to-play-but-buy-hats model anyway, where you already can give away all your hats to someone else. Although, yes, it could impact other sellers on steam.

Instead of selling a license to use, you sell some sort of authentication service. So that when the actual right to use is transferred, the new owner would need to pay for the authentication service.

I sorta feel/hope such clear attempts to avoid the law by trying some sort of Jedi hand wave would not pass muster with the courts.

They wouldn't. That's why law's so much about intent and interpretation--to avoid trivial workarounds like that.

It's an old known economic axiom that a vibrant used product market makes new products more valuable.

The software industry has been both ignorant of economics and too greedy, thinking they can make more money by killing the used market.

This will obviously change things but only in so far as it brings software closer to every other type of product.

Direct link to original article (in German): http://www.spiegel.de/netzwelt/netzpolitik/eugh-zu-oracle-vs...

Link to English press release of European Court of Justice: http://curia.europa.eu/jcms/upload/docs/application/pdf/2012...

And fun thing is that Der Spiegel was actually faster than HN, usually they are at least a couple of days behind (for the HN stories Soeigel is covering).

I think the regal battle started on german soil since the company, that oracle was trying keep from selling the used licenses, was a german one. The case got quite some media attention over here, even the radio-news mentioned it.

Excellent justification for software to become subscription based (you are granted perpetual license to the software "as is" when installed, and for a nominal fee per month you get updates).

If I buy a bundle (Windows and Office installed OEM) can I split the products and resell without new hardware? I ask because if the license as written was to only be distributed with new hardware, then reseller channel pricing may go out the window.

Also, if I can ignore the license terms, what does that do to GPL?

"ignoring licence terms" is a basic, common thing that's relevant to much of agreements, especially in EU. Law text trumps agreement text. Have a statement in an agreement that sells you in slavery? Not valid. Have a statement in an agreement that waives your consumer rights, warranty, etc? Not valid. Have a statement in an agreement that says "I may change terms of agreement w/o notice"? Not valid. Have a statement in an agreement that says "all disputes will be resolved in an arbitration instance that I control" ? For consumer contracts, not valid. It doesn't matter that you read them, understand them, signed them - such terms are just as binding as an agreement that sells your soul. All the legislators and courts understand that otherwise the intended limits will just be circumvented by companies adding disclaimers to their standard agreement templates - so the law (at least in EU) tends to be quite strict that the restrictions apply no matter what was in that boilerplate legal agreement.

if I can ignore the license terms, what does that do to GPL?

The GPL is not an EULA-type licence. It's a copyright licence. It is not a contract that you must sign/click "I Agree" which goes above and beyond copyright law, it is only copyright law.

You can no more opt out of the GPL, than you can ignore copyright law.

> Also, if I can ignore the license terms, what does that do to GPL?

I don't think it means anything for the GPL. If you really wanted to I suppose you could transfer your license to someone else, but since the GPL lets you relicense under the GPL anyways there really isn't any change.

Not that I think there is any practical impact, but could I resell just the part of a GPL distribution that did not include the source code? If so, what license does that resold portion now fall under? Doubtless, getting a hold of the original GPL distribution should be relatively trivial, but suppose the code was tweaked and not resold? Now that may seem unlikely, but suppose a vendor added and tweaked some stuff, sold it under GPL to a "straw" reseller, who then proceeded to strip the license terms and resell without the source code?

I am not a big GPL/Open Source guy, but since Copyleft is derived from Copyright (from which software license arise) an attack on one is an attack on all...

My real issue is that while the EU court is going about invalidating licenses (regardless of their intent, and whether or not their intent is "good") unforeseen consequences may ensue.

Disclaimer: I am no legal expert.

could I resell just the part of a GPL distribution that did not include the source code?

No. GPL software is copyrighted. Law (ie not contracts, actual acts and laws) says you cannot distribute a copyrighted work unless you have permission of the copyright holder. In the case of the GPL, the copyright holder only gives you permission to distribute if you include the work under the GPL.

what license does that resold portion now fall under?

The GPL.

since Copyleft is derived from Copyright

In reality, copyleft is copyright. "Copyleft" is just a term to appear different. It is, legally, copyright, but giving people more than is commonly given (e.g. the permission to make derived works etc.)

A lot of confusion is from the mixing of copyright law and contract law. EULA-type "licences" are contract law, and you must agree to them, like a contract. The GPL, despite "licence" in it's name, is not a EULA-type licence, but merely a statement of what rights the copyright holder gives you. You do not have to click "I agree" to be bound by the GPL.

>The GPL, despite "licence" in it's name, is not a EULA-type licence //

Sorta. A EULA is also a license from a copyright [license] holder.

Resale of an item does not obviate copyright law. The creator (or successor in title or licensee) still holds the IP rights - they have only exhausted their right to control the particular copy instance that was sold. Thus a license like the GPL is still a valid part of the license of use for the copyright work.

So for the GPL it means the same as it does for other lawful licenses applied by copyright holders, very little. You can resell a GPLed work but you can't modify it and strip the GPL from it or unilaterally alter the creator's license.

In the same way the lawful terms in a EULA will still apply. You can't sell a work on to a third party and buy it back in order to somehow nullify license terms.


I don't think this ruling says 'you can ignore the license terms entirely.' In the article they said it wouldn't be legal to buy a license for five copies use four and then separately sell the fourth. You can't 'split' the license, so attempting split the GPL'd software into the source component and binary component would continue to be disallowed.

I think a better way to think about this is that the court is saying that the non-transferable clauses in software licenses are unenforceable, but the rest of the terms can be enforced.

The court isn't going about invalidating licenses, they're regulating contracts, one of the fundamental roles of courts.

So the court wouldn't allow me to sell piecemeal something I own (assuming I purchased) because a license says I have to distribute it with other things? Maybe, maybe not.

As far as the required permissive transferability of licenses goes, what parts of the license terms will the new purchaser have to meet? Since some software is sold at different prices (or has different features) to different organizations and locations through primary channels, what restrictions will apply?

Can educational copies only be resold to educational institutions? Can volume OEMs only resell to OEMs?

Since a license is a grant of use, it implies that a grant given to one can now be transferred to someone else as long as the original gives up the privileges, but without the grantor having a say. Since the license also usually spells out what the grantor grants, it forces the grantor into a new relationship.

It comes down to treating a license as a product, rather than a license; there will be impact, perhaps in how licenses are written in the future so as to have grantors disallow things, or require continuing payment for updates and support (my original contention on subscription software).

Agreed. When I set my price I assume users will learn more about the software over time and my support costs will decrease rather than increase. If someone resells their license they are basically creating a new user and I have to support them the same as if they bought directly from me? No thanks.

That assumes you sell software and service as a package. Why not decouple them and take the opportunity to create a new service relationship? Even better, develop the software on the assumption that it will be resold and create a "secondary operator" install procedure that transfers the service relation to the new owner. Instead of waiting for them to call you, you have real-time information about how your software is changing hands in the market. I recognize that the effort may be non-trivial. At the same time, if the law is opening a secondary market - and it turns out to be significant - wouldn't that approach allow you to tap it?

Yup. I see disruptive opportunity, but I hate to see it driven as a reaction to a court judgment. However, many game and business software vendors have been heading this way anyway.

The European vision of IP and the American vision of IP continue to diverge. I think that is healthy.

If nothing else it is proper payback for American software companies charging non-Americans 1.5x-2x more for the same product as they charge Americans.

What does this mean about copies of Windows shipped with PC's for example? That don't even come with reinstallation discs?

The license prohibits you from transferring those (the manufacturers pay much cheaper than retail)... but this ruling would indicate that you still can.

In most jurisdictions license (or any contract) is not the end of the world. If license conflicts with a law, guess what wins.

I believe that means you're clear as long as you never accepted the terms of the license. With OEM Windows that shouldn't be a problem.

I remember Autodesk being one company who hated beyond belief people selling second-hand copies of their software, removing lots of eBay auctions via DMCA notices.

It's been a few years since I last looked at this, but here's a story from 2009:


What about 1 time use codes many console games come with now? I can see the multiplayer codes being safe as they can claim you are purchasing access to the servers. But what about codes which unlock extra characters or other parts of the game, such as the Catwoman code in Batman Arkham City?

This is going to be interesting for software distributed through systems like Valve's Steam, which is tied to a user account. If they want to continue selling their games in Europe, they will have to create a way to transfer your license to someone else.

From the german article "Sehe der mit dem Verkauf geschlossene Lizenzvertrag ein dauerhaftes Nutzungsrecht vor, sei dies nicht an den Erstkäufer gebunden - das Eigentum der Kopie werde übertragen, von der Firma an den Käufer"

meaning "Permanent usage rights granted at the point of sale are not exclusive to original and may be transferred to a second buyer..."

I'm guessing soon we will only be able to "buy" non permanent usage rights for stuff we buy on steam/random other online distribution platforms.

Like a 99 year license?

Or maybe demos can be canned because people can just try and then sell it again if they don't like the game (as there's no using effect which would reduce the software's value)?

when it comes to these things lawyers are unfortunately very creative :(

Lawyers are creative but judges are also usually pretty smart. They're quite capable of ruling that "if it looks like a sale and it acts like a sale, it's a sale" even if it's structured as a license.

Which is why the EU has legislation governing consumer contracts, requiring that the contract be written in plain language etc.

Not difficult: Valve can simply make it possible to gift your existing Steam games to any other Steam account. They already have the infrastructure in place: you can often (but not always) gift duplicates from bundles you buy to other Steam users.

There'll be endless angst from the games industry if it comes to pass though.


I think the analogy is with software on a CD or DVD.

Then, are software vendor required to offer a way too resell the software? Or are they just not allowed to persecute those who come up with a way to do it?

Does this ruling indirectly legitimizes DRM removal tools?

I mean, without them, how can you resell a license?

Then again, the EU has anti-circumvention rules similar to those in the DMCA.

the EU has anti-circumvention rules similar to those in the DMCA.

Oh? Didn't know that. Got a source/details/explaination/more information?

Well, remember that it is "Digital Rights Management". It's the time it's about our rights. I hope it means that any DRM will be obliged to include a resale functionality.

Not all licenses depends on DRM.

But some do and those can be resold.

So DRM becomes anti-commerce, preventing resale, which would seem to be illegal.

This is based on licenses. Even eBooks have licenses (see store's TOS). So if I buy an app from Apple's App Store and want to sell it, it seems to me Apple would be required by the Court to delete that app from my account and place it in the used buyer's account. Same for eBooks. Am I missing anything?

the ramifications of this judgement are interesting for many reasons, and this is one; it's hard to see Apple being compelled to take positive action each time you sell your copy of software, but on the other hand, if you did and the licence is assigned to the buyer, does a contact now exist between apple and buyer which Apple has to uphold or face breach of contract?

>DRM becomes anti-commerce, preventing resale //

Strictly the DRM doesn't prevent resale it prevents use. From the little I've seen I think they've erred away from suggesting their is any onus on the creator to enable the resale or indeed the reuse.

If DRM is standing in the way of lawful use, there is an (apparently never used) remedy in English law: complaining about it.


Interesting but Section 296ZE(2) specifically excludes the prevention of access when it is by a "computer program" and sub-section (9) excludes works for access by private individuals at a time of their choosing. So it seems to be very narrow in scope of application - how do you know about it?

I only skimmed it but doesn't it merely allow you to complain; the SoS won't necessarily take any action.

Do you know what this section is directed towards? It appears to be something like forcing a company to hand over data necessary to allow a researcher to work with the companies copyright materials??

Note there's a bulletin, http://www.share-the-vision.org.uk/bulletins/bulletin_70.doc, from Aug 2010 where it says that section has never been applied (see also page 2 of http://www.berr.gov.uk/files/file51998.pdf).

I enjoyed this translated chunk: "In plain English: If you sold a piece of software, it can not simultaneously use more themselves."

This case involves business software (Autodesk, Microsoft, SAP, etc.). But I wonder if it applies to my Steam games library, as well. That would be crazy. In the extreme case, it would reduce the number of digital sales from #(people who want to play the game) to #(people who want to play the game simultaneously).

> In the extreme case, it would reduce the number of digital sales from #(people who want to play the game) to #(people who want to play the game simultaneously).

I doubt it. People who don't care about ethics already pirate game. People who care won't cheat, they'll just sell games after they had finished them.

There are already game publishers, that sell games over internet (digital copies) without DRM (gog.com for example). They are doing OK.

Also - in my country selling used software (including games) was always considered fair use, regardless of EULAs. Just like with books.

That's why I said extreme case. Even if people sold games only after having finished them, the consequences would be tremendous. So tremendous that it'll never happen in a large scale: either downloadable games are somehow made excempt via some sort of contract, or games will continue their shift towards being SaaS, ie. you may resell Diablo 3, but you can't resell your Battle.net account which is strictly required for playing the game.

The publishers in the US hate the retail used games market with a fiery passion (and it's not hard to understand why). And by and large I think very few people make use of that, most people -- I'm extrapolating from myself here -- are going to be too lazy to carry their games to GameStop for a couple of bucks, and most buyers are going to be too wary of complications with a used game to save a few bucks.

A digital download used games market would be way more convenient for both sellers and buyers. It would also be much cheaper to both start up and operate for a middleman, who could get by with much a lower cut than GameStop.

There's one difference between pirating games, and buying used games. Pirated games make perceived value of a game smaller - because you have alternate source to get it for free, AND you get DRM in your game, making it less convenient to use than pirated version.

Possibility to easily sell used game may make perceived value smaller (there's cheaper legal way to get a copy). But it also may make the perceived value bigger - if I can sell game after finishing it - I can get back some of the costs, so I can justify buying more expansive game in the first place. I know kid that routinely buy legal games, play them, and sell them at Polish equivalent of e-bay. If it wasn't possible, he would buy much less games, cause parents only give him so much money for games.

I don't know which way the perceived value will go, I'd guess it's self balancing - the easier and more popular selling used games is, the more perceived value of games will rise, making it possible to rise the prices, but also making used games more popular.

Anyway IMHO the entire information market (games, apps, music, movies, ebooks, etc) is going to be mostly honour-based in the future, at least for things that can't be made into services. The only thing that makes people pay you for your content is their feeling that they owe you something. Make them angry at you, and that feeling disappears. One great way to make your clients angry at you is to use law to enforce "unjust" conditions on them. And I don't see why selling used licences is ethicaly different from selling used books, so it may be hard for publishers to persuade people it's actually Evil.

>downloadable games are somehow made excempt via some sort of contract //

You can't force a license on someone that reduces their legal rights in this way, it's not lawful. It appears they'll be able to apply technical means to make it difficult (as impossible as they're able) but they won't be able to use a legal remedy to inhibit lawful resale.

Imagine that, an 'addon'* to Steam, you could basically automate the whole process.

Mark games you didn't 100% need to have around all the time as sellable, so they'd go into the 'cloud' of buyable games. Whenever you wanted to play a game, if you still owned it fine, if you didn't it would attempt to buy it for you. Every game is traded for $1 automatically. To bypass credit card pain you could either put money into your account in one go (add $20 for 20 games at one time) or just use your current steam account-- if you have 100 games that $100 right there.

I have hundreds of games gotten cheap off steam sales, and games I never play anymore. I imagine at any one time there would be 1 or 2 games that I would mark as "don't sell this", but the rest would be fine.

*I say 'addon', Steam obviously wouldn't want it, so it would have to be another frontend to your steam library that managed the whole process.

What about used mp3's? Could I (legally) create a marketplace for half-priced music: seller specifies what music they have, buyer buys, we "ensure" destruction of sellers mp3, make it available to buyer?

There's a start-up called [Murfie][1] that is doing this with physical CDs - you mail in your discs and they do a digital rip of them, and allow you to sell the digital copy on their website. They retain the physical discs in their warehouse, which is kind of their "proof of ownership" for being able to transmit and manage the digital copies.

[1]: https://www.murfie.com/about_us

Does this mean it is also legal to lend licences? Someone should create a service for 'this is my licence but when I'm not using it, my friends can'....

I think, provided it is not technically possible for you to simultaneously use the software that you could sell it for a short period and then buy it back but you're not normally given a license to lend a work (it's usually specifically disclaimed) so the original acquirer wouldn't be able to pass on such a right (as they don't have it).

This could lead to rulings on what a "sale" is.

http://curia.europa.eu/juris/document/document.jsf?text=&... gives a summary thus:

>It follows from the foregoing that the answer to Questions 1 and 3 is that Articles 4(2) and 5(1) of Directive 2009/24 must be interpreted as meaning that, in the event of the resale of a user licence entailing the resale of a copy of a computer program downloaded from the copyright holder’s website, that licence having originally been granted by that rightholder to the first acquirer for an unlimited period in return for payment of a fee intended to enable the rightholder to obtain a remuneration corresponding to the economic value of that copy of his work, the second acquirer of the licence, as well as any subsequent acquirer of it, will be able to rely on the exhaustion of the distribution right under Article 4(2) of that directive, and hence be regarded as lawful acquirers of a copy of a computer program within the meaning of Article 5(1) of that directive and benefit from the right of reproduction provided for in that provision. //

Do I need to license it on every machine I own? OK, how about if I know I am the only user (to put aside the case where I fiscally own every machine my kids use), and will only be using it on one machine at a time?

The licences from the Apple Mac App store works that way. You can install as many apps as you like on any number of machines as long as you own them.

That's how I used to treat my copy of Turbo Pascal. I was the only one who used it, either at home, or in the engineering firm I worked summers at. Borland had a "treat it like a book" license, and I was the only one I knew who'd use the software, so I didn't uninstall it when I left for the day and re-install it in the morning.

"Any" number of machines? I don't own a Mac, but surely it's similar to the iTunes Store and its 5 activated machines?

Can't wait to sell my copy of Diablo 3 that got banned because I was playing on Linux, or whatever happened in that other post.

I thought I was just being really tired until I realised that the article had gone through a translation mangler.

Here this is Chrome being tired and acting up in a recursive manner so I can't read TFA: http://imgur.com/XZqAs

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