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back to article EU rejects Oracle secondhand software licence grab

An attempt by Oracle to stop the sale of secondhand licences on software downloaded over the internet was rejected today by the community's highest court. European Union Flag The court's ruling hinges on the EU directive on the legal protection OF of computer programs. Image by Dimitar Nikolov In its judgment today, the …

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Gold badge

"This is a sensible judgment, but does not have major ramifications for the software industry."

Ho ho. This is a sensible judgement *because* the alternative would have major ramifications for the software industry. Surely?

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Silver badge

It might have ramifications.

Suppose someone takes this argument and tries to sue Valve (or another online games distributor) for not allowing resale of their downloaded games. And suppose this case emboldens potential litigation in the United States?

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Anonymous Coward

Re: It might have ramifications.

I would have thought that the main hurdle in reselling steam games is a technical one (in that the system has been designed to make it virtually impossible) rather a licensing one, although I suspect there is something in the T&C preventing it just to be sure. As such I doubt this ruling extends to forcing suppliers to create mechanisms to allow resale of their goods. It would be interesting to see what happens if people start registering new steam accounts for each game to allow resale of the entire account though.

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Re: It might have ramifications.

While I agree that "I doubt this ruling extends to forcing suppliers to create mechanisms to allow resale of their goods"; I expect that putting something in place to stop software being resold would be forbidden. No doubt that this will go through a few more court rounds before we see any major change. I tried to give a friend my used copy of Assasins Creed II, however restrictions were put in place by the publisher to stop him being able to use it. This situation must change.

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Silver badge

Re: It might have ramifications.

I would have thought that the main hurdle in reselling steam games is a technical one (in that the system has been designed to make it virtually impossible) rather a licensing one, although I suspect there is something in the T&C preventing it

But that's the whole point of this case: A license or contract cannot take away your legal rights. (Well, not in Europe, anyway)

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Anonymous Coward

Re: It might have ramifications.

Why must the situation change? The whole Steam pricing model (as well as all others) has been made based on the assumption that games can't be resold. You bought the games knowing that. Any changes to this will mean big changes in how games are sold as companies have to regain the lost sales somehow.

I think we'll just see more stuff move into freemium and cloud models, where you essentially you don't even buy a download, you buy some server time and streamed content.

In the end we'll be even worse off.

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FAIL

Re: It might have ramifications.

On the contrary - Steam actually has the technical capability to transfer licences. If you recall when the Orange Box came out, many users ended up with 2 copies of the original HL2 and were advised that they could "gift" their extra licence to a friend.

There is no reason at all that this couldn't also apply to games or DLC that you don't have a duplicate of.

If there was the option of buying DLC second hand (for say - half original price) I would actually buy it. They say that they don't want that because the product doesn't depreciate like a physical second hand one would but it's no different than a car - you pay a premium to have it "new" for the bragging rights. You could even limit the (re)sale of second hand downloaded stuff so that it's only available after the new game hype has died down.

Fail because they are missing out on money from the likes of me.

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Re: It might have ramifications.

You can re-sell Steam games - just make an account per game and sell the account.

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FAIL

Re: It might have ramifications.

Funny you should mention this...

Just over three years ago, we were approached by a solicitor acting for a UK based games house which was concerned that Valve's non-transferrable licenses policy contravened EU regulations on the resale of computer software.

Which it does.

It was his option that this liability might also extend to any EU based company which made use of their distribution facilities so he wanted an solution to offer them which would address the legal issues without increasing costs too much.

It's an old legal trick, e.g. "We were aware of the issue m'lud and have proposed a solution to address it."

Our proposal was the establishment of an in house 'market' where license keys for downloaded products could be resold with Valve either charging a fee or taking a percentage. This would address the issue and generate an additional revenue stream which they could then split with the publisher.

We did not suggest a moratorium on new releases but thinking about it now, the lack of one might help the sales of the good and hinder those of the bad and the ugly. It would certainly help people who got conned into buying things like DNF to recover some of the money they wasted.

The reply he showed me was rather impolite to say the least, amounting to nothing more than they don't have to comply with EU law as they are based in the US.

The games house in question decided to avoid the issue by sticking with the traditional publishing route despite the extra costs involved.

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Re: It might have ramifications.

But Steam does allow you to transfer games now between other users, so the point is moot.

They *don't* have to create a mechanism to allow you to sell them, that is most definitely not their problem and this ruling doesn't cover that in any way - it only states that you have the right to sell on the software you paid for, not that the supplying company has to provide that mechanism.

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FAIL

Re: It might have ramifications.

That is untrue. Steam does not allow you to transfer games to other accounts.

What they do allow is the purchase of *new* games as a gift to give to others which is something entirely different.

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Re: It might have ramifications.

"It would certainly help people who got conned into buying things like DNF to recover some of the money they wasted."

Hey, some of us liked the game. Sure, it was cheesy as hell, but that was the whole bloody point. It's part action shooter, part parody and part "Take That!" at pop culture. Seen in that light, it's pretty entertaining. And at the least, many of us waited so we didn't buy the game at full price.

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Re: It might have ramifications.

"Hey, some of us liked the game."

No accounting for personal taste I suppose :P

Seriously, judging by the sheer volume of the screaming when it was first hit the shelves I think you might be one of the *sensible* minority who didn't jump in with both feet. :D

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Anonymous Coward

Law is flouted/ignored?

I use a significant (and expensive) software package that is developed in the EU, sold in the EU, and expressly forbids the sale/transfer of "licenses". The software is distributed boxed and installed on DVD, and the supplier threatens to withhold support and updates from any transfer/sold licenses . I queried the legality of the clause only about 6 months ago and was told it was perfectly legal to do this. Does this mean there are exceptions to this ruling, or are software vendors simply lying?

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Anonymous Coward

Re: Law is flouted/ignored?

MS tried this and lost too, you can buy discounted used copies of all their products that were sold in the EU, the company send a change of owner notice to MS on every sale, so I expect your supplier is lying in order to extract more money from their client base.

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Re: Law is flouted/ignored?

Yep, it's not just software suppliers that try such tricks.

Recently I ordered some vouchers online, after a couple of weeks they hadn't arrived and as the company stated they should be 4-5 day max and that I should contact them after 10 days, I did.

Their initial reply said they had shipped the vouchers the day I ordered them and that if they hadn't arrived it was probably because they were lost in the post. They also said that I could have them re-shipped for a fee and that I could insure the re-shipped item for a further fee.

This is, in fact illegal, I had to point the company to the OFT website that explains that the goods remain their property until I receive them and that they are not allowed to charge extra for insurance in transit as that is their risk, not the customer's because the goods are their property while in transit.

Having worked in large companies before, this kind of thing isn't usually malicious, it's normally just ignorance of the legal situation by those in charge and when you couple that to customers who don't know their rights you get these situations arising, particularly when you start crossing international borders (c.f. Apple vs Italy concerning warranties).

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Re: Law is flouted/ignored?

"Yep, it's not just software suppliers that try such tricks."

Indeed. Many online retailers have a clause buried in their T&Cs which imposes what they variously call an administration, handling or restocking fee on returned items.

This is specifically forbidden by the Distance Selling Regulations but they get away with it because most of their customers simply accept it without arguing.

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Pint

Books......

Given the 'do not lend, borrow, sell' gubbins in the front of books, if we can now re-sell software licences, are we now allowed to legally re-sell a book? Legally I mean, not just 'Yeah 'course mate!'

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Boffin

Re: Books......

"do not lend, borrow, sell' gubbins in the front of books,"

The do not lend, borrow, sell gubbins refers to "in any form of binding or cover other than that in which it is published" or words to that effect. ie you are not stopped from selling or lending the book so long as you don't "re-package" it by using a new/different dust jacket or re-binding it with a new cover.

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Boffin

Re: Books......

This is also to prevent the re-sale of books without covers. Books are often (or at least, they used to be) supplied to bookshops on a sale or return thingy, where the shop could return unsold stock to the publisher. But shipping unwanted books just so they could be pulped was expensive, so they would just return the covers, and were supposed to destroy the books themselves. Some naughty bookshops would instead sell the books without their covers at a significant discount, thus selling something they'd never paid the publisher for.

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Re: Books......

You are describing the sale of stolen merchandise. The problem is the fool law was written to address this corner condition. Historically libraries have often rebound their volumes to refurbish from wear. And what if I want to purchase a book properly then rip it apart and resell individual chapters? Or as some enterprising high school boys did 40 years ago: Purchase issues of Playboy, Hustler, etc, and cut the pictures out to sell.

In the US there is a calendar publisher who claims dismembering their calendars for resale is a violation of their copyright. One of the reasons I buy their calendars is that the monthly pictures are good enough to frame separately through the house and office. I totally disagree with the company's position. Its not for me to duplicate their product but once I have legitimately purchased it then its mine to disassemble and do as I please including resale.

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Silver badge

e-book licences

One wonders how this will affect e-book lending or resale. They commonly come with very restrictive licenses forbidding re-sale or lending, even if not DRMed up the kazoo.

One of my pet peeves is ebook pricing, especially when the ebook price is comparable with the dead tree price yet is far more severely restricted in what you can do with it.

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Anonymous Coward

Re: e-book licences

Isn't the argument for VAT on ebooks that they are treated like software licenses or somesuch, which would make it difficult for the publishers to argue this doesn't apply. The restrictions on removing DRM would catch you I guess and any process to transfer ownership would most probably be so onerous to not make it worthwhile.

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Boffin

Re: e-book licences

I thought that removing DRM is legal if done for the purposes of interoperability - for example, so that you can read something you bought on your Kindle on a different device.

Mind you, more and more publishers are now realising that DRM is futile and encourages piracy, so are getting rid of it. Some books in the Kindle store are already DRM-free, but it's not made obvious whether a book is DRMed or not at the time of purchase, which is a shame.

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Re: e-book licences

No, you can request a work-around if you believe your requirements are covered under copyright exemptions and you can complain to the Secretary of State if the rights holder refuses to help.

http://www.ipo.gov.uk/types/copy/c-other/c-protect.htm

It's a murky area at best, the most likely scenario is that if you have bought the work and you remove the DRM without permission in order to use it on another device yourself then it's highly unlikely that anyone will come after you. If you distribute the unprotected copy to others either for free or not, then that is a completely different ball-game.

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Silver badge

Re: e-book licences

I think the big reason for the move away from DRM lies in the ePub format. ePub is XML-based, and the .epub file is a .zip file with different clothes. The currently-recognized system for DRM is too easy to undo, and IIRC the ePub format makes it rather difficult to try something more robust without breaking all the e-Readers currently on the market.

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WTF?

Why are we talking about games ???

There is software out there, costing tenthousands euro's (our pounds) per licence and users are told it can not be resold. So now it can be sold?

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Re: Why are we talking about games ???

Because most of us encounter games and similarly priced software on a day to day basis. £1000+ licenses are for businesses.

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Re: Why are we talking about games ???

And many of them can be legally restricted by actually being leases or hire-purchase agreements: legally-binding (meaning ink on paper) contracts with terms and conditions. They provide the software and service for it (usually including upgrading) for a set length of time, but you have to return the software at the end if you don't extend the agreement.

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Silver badge

Books

There's a more prosaic reason for the "in other than the original binding" stuff in the front of books.

Books (and magazines) are heavy, returning them costs money. It's far easier to rip off the cover and return that for credit - so that's what the industry does. The rest of the book is supposed to be destroyed, but most are too shiny to wipe with.

The prohibition is simply aimed at preventing non-paid-for copies from circulating.

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Re: Books

..... Except *somebody* must have paid for them, for them to have been printed at all in the first place. What you're describing doesn't sound at all like a sensible way of doing business, if you ask me. It's not like you suddenly get your money back when the books are pulped.

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Anonymous Coward

Re: Books

But the covers tend to get returned along with a return claim form. Which means the publisher gives you credit back based on the number of matching book/magazine covers they get back (it may not be a full refund, but it's still better than a total write-off, so any retail firm will take it). The covers are there so accounting can say, "They sold X amount and returned Y amount. Total amount due them is $Z.ZZ" and get the books settled.

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Re: Books

Either way, the cost has been swallowed, and nobody is any the poorer. After all, the books are being returned because nobody was prepared to pay the full asking price for them. If the retailer can get a few pence more for the mutilated books from people who will read them even without the front cover than they would from a paper mill, electricity company or whoever else would dispose of them, I say "more power to their elbow". Serves the wholesaler right for using a broken business model in the first place.

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Thumb Down

Re: Books

So selling stolen property is all right then? Shame on the insurance company for using a broken model!

I am a freetard, I believe that copyright law has been abused by publishing agencies, and that digital distribution changed things in a way not seen since Gutenberg. Buying a product, claiming it back as a refund, and then selling it on is theft and fencing stolen goods.

It is no less wrong than buying a hard disk in a box, replacing the disk with a lump of metal and returning it for the sale price. (admittedly, with some Seagate drives you may have given the shop a free upgrade.)

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Re: Books

But the retailer already has that power as possessor of the book. It's called a MARKDOWN. Thing is, even with markdowns, some things don't sell, so it's either return the book (or at least its cover) for at least partial credit or you write the whole thing off. Usually, the tipping point is the credit rate for the book. If the seller can't sell the before without marking it down to the return rate, they'll just return the book.

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Pint

OEM licences?

Does this have any ramifications for OEM licences which are nominally tied to the hardware?

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Re: OEM licences?

From my reading of the directive, the law doesn't recognise a difference between OEM and retail so OEM licenses are also transferrable despite claims to the contrary.

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Anonymous Coward

photoshop

so is it legal to buy a used photoshop license? cs5 is much cheaper than cs6, and I would like one.

I found a website selling oem photoshop licenses - adobe doesn't do oem so it must be pirated software. but if it's second hand, would that be ok?

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WTF?

Re: photoshop

Are you daft or what?

Of course it's not ok. If Adobe don't do OEM then they can't be genuine Adobe licenses.

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Anonymous Coward

Does this apply to games....?

With publishers like EA now enforcing a unique licence model, but only for some games and for the online content element, could this judgement be extended?

Don't know, just asking?!

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MD

This court ruling puts a massive dent in the FUD (Fear, Uncertainty & Doubt) tactics employed by the software vendors. 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. There are other secondary software licence suppliers whom adopt more transparent business models that do not rely on the Exhaustion Principle eg: www.discount-licensing.com.

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Bronze badge

Poor Oracle

<sarcasm>

I feel so sorry for poor Oracle!!!

Unloved by the courts worldwide.

First it was the stinging loss to Google,

and now this.

Anyway, Larry has his island retreat, to find a place to hide.

</sarcasm>

Hey Reg, how about a `crocodile tears` icon??? Please!????

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