Technology Supports Digital Resale
AUG. 13, 2012 • Back on July 3rd the European Union’s Court of Justice ruled in UsedSoft GmbH v Oracle International Corp. that software distributed by digital download could indeed be resold to a third party. “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 license 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.” While the case did not dwell on computer or console games, the implication was clear that gamers in Europe now had a right to resell downloaded games to someone else. The question was how to make that happen when downloaded code is, by design, shielded from access by DRM. The Game and Download Company AG in Düsseldorf, Germany is one of the first firms attempting to leverage the court ruling. The firm has included a game transfer feature to its Fast Download Technology with Streaming Logic (FDSL). The system stores games on a server, allowing the user to play the game via fast downloads and streaming from any computer with Internet access. Therefore, it was a straightforward change to add the option to permit gamers to transfer their individual license to another user account on the same FDSL download service.
Impact: A major problem some consumers have with digitally delivered software is the inability to transfer it to another user. Selling used products is big business and in the game industry the rise of the used game business at GameStop was a large reason the industry was able to maintain such high retail price points for new software. When a user wanted a new game title they could trade in older titles in order to lower the price. Without the ability to trade in products DFC believes the average price of new software will drop significantly. Now it looks like this European court ruling has stepped in and sanctified that digitally distributed software can legally be resold. This could actually be good news for the industry as it will force them to come up with solutions that if done creatively could actually allow publishers to benefit from the resell of used game software. We are going to watch carefully how the new reality of digital download resale develops in Europe.