Valve, Steam, and used games: the battle for resale rights may be fought in Germany

Valve, Steam, and used games: the battle for resale rights may be fought in Germany

According to reports this week, Valve may be taken to court by a German organization for refusing to change their terms of service to allow their customers the right to sell the games and software they purchase on Steam.

The suit was filed by the Federation of German Consumer Associations in early 2013, and they now say they're not only optimistic that the case will go to court sometime later this year, but that they'll win.

“Unfortunately a date of the trial is not fixed - we hope it will take place this year,” representative Eva Hoffschulte told Gaming Blend. “Until then, it is not realistic that Valve will change their policy. But our chance to win the process is very good and that will be really an improvement for consumers: then they can sell their games to others.”


It's common and even expected for people to express confidence about their lawsuits, but this suit carries particular weight; it's coming after a ruling in European Union courts in July of last year which ruled that it is legal for purchasers to resell their digital products.

The ruling confirmed that the European concept of “exhaustion,” which states that product sellers “exhaust” their rights to the product once it's been sold, also applies to digital goods. It's very similar to the US's first-sale doctrine.

In that case, the courts partially ruled in favor of UsedSoft, a company that was buying software that could legally be shared with up to 25 people, and reselling the additional uses. The court ruled they could resell the software, but had to render the original copy unusable at the time of the sale.

By its judgment delivered today, the Court explains that 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.

It underscores an important point about copyright law: it's not the same everywhere you go.

“Copyright behaves differently in Europe in than it does in the United States,” Parker Higgins, a copyright activist at the Electronic Frontier Foundation, told the Report. “In general they're more consumer-friendly, but in some cases they're more friendly to authors and artists.”

Despite the earlier ruling in favor of UsedSoft, this is still mostly uncharted territory. The battle to define copyright law as it applies to digital goods is still being fought, and Germany would be one of the first countries to draw a line in the sand on this issue and stand with consumers.

“[Germany would] certainly be at the forefront,” said Higgins. “I know a lot of countries are discussing this. Although they may not be the first off the blocks. This is a big question, and as more of our works move to digital works only, it's going to be sort of a defining question in terms of secondary markets and commerce in general. So for a country to take a proactive stance and defend the rights of consumers that would be a pretty big deal.”

The lack of much precedent, particularly within German courts, makes the case difficult to predict, but either way it goes it could have implications in the ongoing battle.

“For one thing, if it's allowed in Germany…Germany is a major market,” said Higgins. “So that would effect some of the strategies of publishers. And if you can make the case that publishers get along fine with people reselling goods in Germany then I think that makes it more likely for similar legislation to pass elsewhere.”

Lend with a capital “L”

Even if Valve loses the suit and is ordered to offer their customers the right to resale, that opens up a whole other bag of questions that will have to be answered by the courts. After all, just because Valve is ordered to give customers the right to resell their files, doesn't mean they have to provide the means for them to do so.

Higgins gave the example of the way eBooks evolved after the Kindle began to popularize the format. Consumers eventually became upset that they could not lend their books the way they could with physical copies. So when the Nook was released there was a feature called “Lend.”

“Publishers could turn it off and you were only allowed to lend the book once for 14 days,” said the EFF's Higgins. “So people were allowed to lend books, but could only use this feature that really distorts what lending is.”

Interestingly, Higgins also refenced these issues with iTunes music years ago. Ultimately, Apple opted to stop using DRM in their downloads, and many of the major music publishers went along with the decision. Still, there is no legal mechanism to sell those files as you would a used record.

There seems to be fewer examples in fewer mediums for gaming to use as precedent for denying customers the right to resell. Precedent may not matter though.

“There's a precedent in the German courts of diverging from precedence,” Higgins said. “They've made pretty bold rulings before. In some US courts there appears to be a lot of deference to business interests. Courts are unwilling to undermine business models. And I've seen more examples of courts being bolder about consumer rights in Europe.”