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Summary:

A court ruling says consumers are free re-sell downloaded software just like boxed software. What will it mean for video games, mobile apps and the future of cloud storage?

Paying for software CD with US money notes
photo: artiomp

How much money could you make by selling on your used apps and games?

Consumers commonly re-sell their old plastic, boxed applications, CDs and video games through auction sites and back to retailers.

When it comes to the equivalent practise of re-selling download licenses, one of the world’s largest software makers has been trying to stop the prospect – but its efforts have been thrown out by a court.

The European Court of Justice has ruled: “An author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet.”

The case follows a complaint brought by Oracle in Germany against UsedSoft, a site which buys and sells business software licenses from their original owners. It means the license consumers get when they buy software via download can be traded on in the same way the boxed license can be.

The ruling is being digested in the games industry, where high street retailers have carved out a thriving new trade by buying and re-selling second-hand boxed games from and to customers.

Some online companies like Green Man Gaming have tried to create an equivalent market in selling activation codes for PC game downloads.

The customers who trade their license in to Green Man Gaming must first deactivate their game code. Company boss Paul Sulyok tells Eurogamer the ruling will prompt customers of download stores like Steam and Origin to include the same deactivation and reactivation function, so that they can “trade in” their games.

What does any of this mean for other digitally-downloaded software like mobile apps and Mac App Store apps?

“A straightforward analysis might be that mobile apps are software just like Oracle’s program,” writes game industry lawyer Jas Purewall on his blog. “The first purchaser of a mobile app should be able to sell it to a second purchaser (even if technically the ability  to do that doesn’t exist… yet).

“On the other hand, there is at least an argument that the first purchaser of an app shouldn’t have the ability to resell the app to a third party due to this case, because when that first purchaser bought the app she would have had no technical ability – or even the expectation  – of being able to sell it to a third party.”

But Purewall also suspects an alternative tech trend could render the ruling less important: “Two words: cloud computing.  Actually, four more words: Software as a Service.  As software and games increasingly become long-tailed services rather than digital goods, the question of the legality of second hand sales recedes into the distance.

“Of course, eventually we’ll get to a stage when questions about the legal transferability of SaaS services starts coming up, but we’re a way off that yet.”

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  1. It would be great if a U.S. court issued a similar ruling, but in the absence of something like that, lobbyists would bribe, I mean, convince Congress to pass laws outlawing the re-selling of software.

  2. This court ruling puts a long awaited dent in the FUD (Fear, Uncertainty & Doubt) tactics employed by the software vendors and gaming / music publishers. However, worth noting that Usedsoft’s use of a Notary (in part, to hide where the licences came from) was deemed illegal by the German courts and Usedsoft is now also going through insolvency proceedings. Secondary software licence clients should therefore always question the transparency of the secondary supplier’s business models so that there is tangible evidence of the transfer of ownership back to the original acquirer and that the software has been de-installed by the original acquirer – a Notary certificate will not necessarily achieve this.

  3. Mosaic Technology Monday, July 9, 2012

    We agree that it would be interesting to see something like this in the United States. It will be interesting to see the effects that this ruling has on the software world in Europe.

    Mosaic Technology
    http://www.mosaictec.com

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