Paul Gregg

Jack of all Tech.

On Software and Game Copyright and Second Hand sales.

Written By: pgregg - Aug• 07•2012

 

This morning I got into a little twitter spat with a local game developer Matt Johnston. Basically he is arguing against companies like GameStop because they do not provide any revenue back to the original developers of the game. As he is a game developer, he is very obviously on the side of the games companies.

Matt made a blog article and very nicely quoted me in the article – one of the tweets during the to-and-fro conversation. Well as much as 140 characters allows.

Matt makes several points, one of which is that if we allow* a second hand market, then DRM will happen; and we don’t want DRM, so we shouldn’t have a second hand market.

(* note that it is not the right of the games companies to allow or ban it in the first place).

DRM is a red herring and not at the heart of the issue. DRM may be the games companies answer to the problem it perceives – but at the end of the day, DRM only hurts those people who actually pay for the game.

I could go onto many underground sites and find the latest games “for free”. Who wins there?

I don’t as I do believe the game should be paid for. I have a large collection of both Wii originals, and a large Steam archive.

Having said that, morally, I have a real objection to the games companies thinking they can ride roughshod over consumer rights and long established principles and doctrine of first sale.

The second hand market is both legal in the physical works *and* in the digital world. And thankfully we now have case law to back this up.

Last month, in the EU, Oracle lost a case (Oracle vs UsedSoft) trying to prevent resale of licenses to its software.

The court wrote:
“A rightholder who has marketed a copy in the territory of a Member State of the EU thus loses the right to rely on his monopoly of exploitation in order to oppose the resale of that copy.”

Further, Oracle, and Matt here, opposes further distribution based on licensing terms. The court also rejected this view, thus:
‘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. 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.’

http://www.gamerlaw.co.uk/2012/07/legality-of-second-hand-sales-in-eu.html
http://www.bit-tech.net/news/gaming/2012/07/04/curia-digital-distribution/1

In summary, as a gaming company, you would love to make income on the second hand sales of your games, who wouldn’t.  However, morally it is wrong.

Would you like the government to charge VAT on second hand goods? No? – they already got their cut, as have you in your first sale.

Thankfully, the law agrees with me.

 

Image: http://www.stockvault.net/photo/106338/video-game-controller

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