Tobold's Blog
Wednesday, July 04, 2012
 
I am not a lawyer

... but I find the recent ruling by the Court of Justice of the European Union which states that Europeans have a right to resell their used software very interesting. Quote: “an author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet”. That has enormous consequences both for MMORPGs and for digital distribution platforms like Steam or Origin. If I wanted to sell my World of Warcraft account in the EU, Blizzard isn't allowed to stop me.

Of course the devil is in the details. If Blizzard can charge you for server transfers, they might charge you for "transfer of your license to a different owner" as well. The court only says Blizzard isn't allowed to oppose the sale, they aren't obliged to make that transfer easy or free. The same probably would be true for sales of Steam games. It isn't even clear whether Steam must allow you to sell individual games, as opposed to your whole account.

There was a recent case where Cryptic said that they would rather leave the Netherlands than to comply with their laws. That might be feasible for a single small country. But it would be hard to imagine all MMORPG companies and all digital distribution platforms leaving the whole of Europe only to prevent used game resales. On the other hand if reselling a license becomes possible, the companies are in big trouble. Unlike a "used car" a "used license" suffers from no wear or tear whatsoever. Except for the fact that you can't get one on release day, a used license only has advantages over a first user license.

The logical development for game companies is continuing to their business model of "games as a service" instead of selling either boxes or licenses. You can't sell used services. I paid for years of MMORPG subscriptions, but as these are "services" no court can order Blizzard to allow me to resell them. Thus we will see more and more business models in which players "rent" the game for a duration instead of acquiring a license that is resell-able. Interesting times ahead.

Comments:
I find the whole notion of licenses being different than physical goods asinine in the first place. So there isn't wear and tear... so what? That is a problem with the archaic business model they choose to cling to, which has bugger-all to do with a legitimate argument against secondary sales doctrine.

The people who defend this crap confuse the hell out of me too. Who here has never went over to a friend's house to play a game or watch a movie? Or borrowed one? If these companies could install webcams and biometrics into the keyboard to ensure you, and only you, were experiencing the game/movie (with an automatic kill-switch the moment someone else walked in the room), they would.
 
I suspect that Blizz will attempt a different tack. They don't prevent you from passing on the software or the right to use it. The key is not to use the software, but rather to open the account on their systems. So you're paying for the right to access your toons, not to use the WoW client.

Whether this actually flies is a different matter of course, and as ever I am not a lawyer, nor do I play one on TV
 
Services are a different beast, but this has implications for operating systems and applications.

Licenses do not suffer from wear and tear as such, but as time passes most of them become obsolete anyway. New and improved versions are enterting the market. While not each new version will have a killer feature that makes people go for it, the likelihood increases as improvements are made. Also consider that an application or OS no longer being supported with security patches makes using it more hazardous or a no-go in corporate environment.

Given the above, I don't think tha the impact would be quite so big for serious software.

Where games are concerned, the attempts to punch the ticket of a game sale on first use is getting out of hand. The message that I see there is "No returns, no resales, thanks for the money chump!"
 
I don't see how is it interesting on the MMO field. For an MMO, the purchase price is small compared to the 1-year subscription price.
 
I havea vague memory that Steam used to allow this back in the early days. If I recall you could sell your copy of Half Life 2 to another Steam user but you had to pay a €10 administration fee.

Google fails to support my recollection yet I am sure I remember it. Can any one else confirm?
 
I can think of a few different results from this ruling. Among the more concerning is that now game companies in the EU will begin to sell time-limited licenses (1-2 years or so) for a game, thus making it worthless after that time.

Also, the ruling did say they can't stop you (read: They can't ban you or disable the key) but it also did not say they have to facilitate the sale. Steam for example, won't have to create a new ability inside its service that lets you sell you games over Steam.
 
Given boxes at $40-60 and $180 or less per year, the box price is hardly small unless somehow you're using a system of accounting in which a 30% increase in price is small. That's assuming a one-year sub is even the typical time that a player is subscribed. Over time the box will become less significant, but then the expansions come and stick another box on.
 
Might accelerate the shift to F2P games.
 
"If Blizzard can charge you for server transfers, they might charge you for "transfer of your license to a different owner" as well."

Certainly, within reasonable fees. They cannot charge you 100 EUR for that. Sure, they could try, but they'd get sued for obstructing the law. I see nothing wrong with them asking a reasonable fee to transfer over a license if that includes administrative aspects like putting the license under your name.

Since the accounts in EU are bound to EU there wouldn't be a loss of profit in other regions thanks to this law (ie. nearly all players on EU server are from EU, and nearly all EU players play on EU server). The people who'd play WoW on a used account also still need to pay their subscription so in that regard there's no loss either.

Only thing Blizzard can do is increase the price of the game (WoW, expansions, sub, services) in EU for some obscure reason.

"Unlike a "used car" a "used license" suffers from no wear or tear whatsoever."

In a way it does. The software industry is very fast paced. What is new now is old in a year. A car can function for many years. More important: both devalue in price.

What baffles me is that there is only one reason why a corporation wouldn't want their product to be reselled: short-term greed. On long-term it is actually a great way to market their product. But they think that somehow the buyer of 2nd hand software would've bought a new copy. Probably not. Probably the reason why he wanted to buy it 2nd hand in the first place was to save costs because new the game is expensive. And that means the buyer who doesn't have much cash to burn will turn to another alternative: piracy. Of course, this does does not apply to service-based games/software.

"Also, the ruling did say they can't stop you (read: They can't ban you or disable the key) but it also did not say they have to facilitate the sale."

Strange you claim that since a Dutch lawyer who's specialised in IT law said on his blog they are not allowed to obstruct you to execute your legal right to resell. (See: http://blog.iusmentis.com/2012/07/04/gedownloade-software-mag-worden-doorverkocht/ )

If anyone has a link to an article in English about this subject written by a lawyer consider me interested.
 
I somewhat expect Steam to implement an option to sell your existing license to another user for the current price Steam itself is charging. The funds would be added to your Steam Wallet without an option for payout. They'd also provide no way to initiate the sale, you'd have to sell to a friend or find someone on an external site.
Sounds plenty compliant with the ruling to me.
 
ECJ judgments are generally among the most boring thing in the world to read. This one was no exception.

Anyway, I can't see that it has any bearing on the online space at all. There is nothing in the decision that puts any obligations on the software supplier to facilitate the on-sale.

In other words: the court has said that you can resell downloaded software just like you can resell boxed software. If the software requires some online interaction with a third party (like Steam, any MMO etc) then this judgment won't help you.

I probably overlooked something, but with that reading it seems that the judgment is not much to get excited over.
 
What people forget whenever this discussion comes up is that without new licenses/copies/what have you, used license don't exist. So, while used license may be available for less after folks buy new.
 
When you mentioned being able to sell your WoW account, you seem to have missed an important distinction on what you're selling versus what such a ruling would allow.

If Blizzard has to let you sell your used software, then that is only the software itself. The Mists of Pandera and other expansions you have purchased.

Your account with Blizzard, which includes your character and all their possessions is not part of that software. This is something owned completely by Blizzard. Their terms of service say you cannot sell this.

Saying that Blizzard has to extend that ruling to cover characters and accounts would be like saying you have to include your saved games if you sold a copy of Portal 2 to someone. The two are separate.
 
it never cease to amaze me how shortsighted companies are when it comes to used software

more people would buy software in general if you could hope to sell them later - Steam sales as the best indication of that - most empirical evidence suggests that steam users tend to accumulate a large number of games they don't play and only bought them because they were cheap - that is a market segment that a new game will never tap into
 
"Sounds plenty compliant with the ruling to me."

What you wrote is not complaint at all. Steam is free to implement what you said but they'd be succesfully sued.

Or perhaps also an option: should one contact steam with the question to not use said platform but unlock the license from Steam account, Steam has to comply.

Let me explain it to you in one line: the original seller of the license has no right to dictate what the original buyer of the license (= current owner of license) does with the license and the original seller of the license is also not allowed to obstruct a new owner of a license should the previous owner of the license decide to sell said license.

"for the current price Steam itself is charging"

The owner of the license is completely free to decide the price they'd like to sell the product for regardless of whatever Steam asks for it.
"The funds would be added to your Steam Wallet without an option for payout."

The owner of the license is completely free to ask money (or goods) for the license. A coupon for Steam could be an option should the seller opt for that, but certainly not the only option.

"They'd also provide no way to initiate the sale"

Where you sell your license is completely up to you. Steam do not have provide such within their Steam platform; that'd be extra service.

Steam can ask an administrative fee to unlock the license. This fee must be reasonable (so they cannot charge you 100 EUR for it to demotivate you from reselling). It is also not allowed to resell say a bulk of 50 licenses individually, they must be sold in the same bulk as well.
 
*puts on his robe and tinfoil hat*

It is clearly a politically motivated decision. With the impending collapse of the European (and global) economy looming on horizon, something has to be done to distract people from their plight - oh, hey, cheap video games for everyone!
 
Fn0,

Both you and Clockwork talk about how the original supplier will now be obliged to do certain things to facilitate the second-hand buyer's use of the software. Did you get this from the actual judgment, or does it follow from something else? I couldn't find anything about it in the judgment.

And Ephemeron.. the case was about Oracle suing a company called "UsedSoft" (!) over some databank software. So it's more like we'll now be allowed to bore ourselves to death, more cheaply. :)
 
Oscar, no I wouldn't call that an obligation to facilitate. That's precisely the point of my previous post: they're merely complying with the law, and allowing the current owner of the license to do so. They're _not_ allowed to obstruct the current owner of the license to execute their legal right (resale of license) no matter how strange of a construction they have their license bound to that current user. The reasonably fees I said, I directly gotten from said lawyer's blog.

What I wrote is based on my interpretation of what I read from a lawyer specialized in IT as I linked earlier. Feel free to not to believe my word on it and contact your own lawyer or use Google Translate. In his analysis he does link to various previous cases, but there isn't much room to interpretation. He is firm in his words.
 
Fn0,

Sorry, I didn't mean to offend. The judgment is in English and available for all to read online, so you'll need neither lawyers nor Google Translate (although, as I said before, you should stock up on Red Bull before reading it).

Basically, all I can read in that judgment is that a company who sells software for download to someone is not able to stop the buyer from selling the license to a third party. It says nothing about obliging the developer/seller (in the actual case, Oracle) to assist the second-hand buyer in enabling the software to actually work. So I suppose the answer is that this obligation follows from some other principles. :)
 
This comment has been removed by the author.
 
There's no insult at all, its only good one wants to think for themselves and research.

That said, I'm not going to read such a long piece of text in English when I have a lawyer I trust on the matter (have dealt with him before) who is specialized in IT law who has written a summary in my native language.

(Much of the journalism coverage I've read wasn't accurate and full with speculation.)

The short answer to your question is the Software Directive from 2009.

The long version is hereunder.

From the article I linked to before I understood:

1) He refers to the "Software Directive" which states the rights are exhausted after sale and that the copy may be sold, nevermind what is written in the license.

2) After that he states they (the judges) noticed that from "several laws and directives" makes downloaded software the same as buying a CD which gives you "a license to use".

1+1=2. And then there are some "if's" and "but's". Such as that they're allowed to ask a reasonable administrative fee to unlock the license, bulk remaind bulk, previous owner must delete their copy, and that it has to be about sale of software (not rental).

A little after (2) he says: "And for those who think they're smart they can obstruct the sale of the license: that's illegal." Then he explains: in the Software Directive (1) it is written it isn't allowed to obstruct the legal owner to use a piece of software, and that includes the reselling of the software with a license since that is normal usage.

Now my conclusion from that is that if I'd like to sell my WoW license I need to contact Blizzard (because my WoW account contains various licenses and isn't the same). Then Blizzard has to simply do one thing: cooperate (tho again they're allowed to ask an administrative fee). Why would it not apply to Blizzard? Because they made some kind of obscure construction as they have? Even if they refuse to work around their own silly model after you contacted them?
 
Fn0,

I'm glad you didn't take offense.

The Oracle v UsedSoft case deals with software that you can download once and use forever. From the court's description it was "offline" software, i.e. you only needed to input a license code to activate it with no online validation beyond the code.

In other words, just like all software used to work, until the recent introduction of always-online DRM, one-use unlock codes etc.

Basically, I think most observers (your commenter included, although he makes an important reservation at the end) read too much into this case.

We may see Steam opening up resale opportunities or Blizzard facilitating account selling. But we'll do it for the traditional reason – more money in their pretty pockets – rather than because of this decision.
 
At http://curia.europa.eu/juris/document/document.jsf?text=&docid=124564&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=2664340 you can set the court decision to your own language it is translated in all European languages.

They described the software but never mentioned DRM whatsoever. So the jurisprudence counts just as well for for software containing DRM which is written in Software Directive 2009 that it is forbidden to deny the legal owner of a piece of software to use their software.

Of course the possibility the DRM software does not allow to be used, or does not allow to be resold technically may make it harder if not impossible to resell the license but that does not mean these corporations are within their legal right to do so because the law is above their technical limitations.
 
Coming in late (after a vacation in the Canadian Rockies with no internet access. It was actually very enjoyable ;) but I don't believe this ruling affects Blizzard at all.

WoW's End User License Agreement, Section 4.(b) "Ownership" has always allowed you to sell the your copy of the game.
"You may permanently transfer all of your rights and obligations under the License Agreement to another only by physically transferring the original media (e.g., the CD-ROM or DVD you purchased), all original packaging, and all Manuals or other documentation distributed with the Game;"

You've always had the right to resell your copy of the Game so this ruling changes nothing. You're associating the Game with the Account, and as per the EULA and the Terms of Use, the Game and the Account are not the same thing.
 
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