A French court ruling on 17 September in a case brought by the French consumer group UFC-Que Choisir against Valve found that purchasers of video games on Valve’s digital platform, Steam, are permitted to resell them. This ruling contradicts established EU law and should be overturned on appeal.
Simon Little, CEO of ISFE, said: “This French ruling flies in the face of established EU law which recognises the need to protect digital downloads from the ease of reproduction allowed by the Internet. Far from supporting gamers, this ruling, if it stands, would dramatically and negatively impact investment in the creation, production and publication of, not just video games, but of the entire output of the digital entertainment sector in Europe. If Europe’s creators cannot protect their investments and their intellectual property, the impact on both industry and consumers will be disastrous.”
According to EU copyright law, when it comes to digital and streaming services, every use must be subject to the authorisation of the rightholder and copyright does not expire with their first sale, as it does with physical goods. Physical goods are subject to the “distribution right” and to the “exhaustion doctrine” which means that the purchaser has the right to resell the goods if they were first put on the market with the authorisation of the copyright owner. This is not the case with digital downloads which are subject to the “communication to the public right”, meaning that the purchaser does not have a right to sell them on, without the copyright owner’s permission.”
ISFE ensures that the voice of a responsible video games ecosystem is heard and understood, that its creative and economic potential is supported and celebrated, and that gamers around the world continue to enjoy great gaming experiences.
Video games are creative works with an interactive element. Video games have been recognised as complex works by the Court of Justice of the European Union and are protected by copyright for both their non-software elements (music, audiovisual, graphics) and their software elements).
The 2001/29/EC Directive on Copyright and Neighboring Rights provides that:
“(29) The question of exhaustion does not arise in the case of services and on-line services in particular. This also applies with regard to a material copy of a work or other subject-matter made by a user of such a service with the consent of the rightholder. Therefore, the same applies to rental and lending of the original and copies of works or other subject-matter which are services by nature. Unlike CD-ROM or CD-I, where the intellectual property is incorporated in a material medium, namely an item of goods, every on-line service is in fact an act which should be subject to authorisation where the copyright or related right so provides”.
Current case before the CJEU (Court of Justice of the European Union) – judgement expected end of 2019
The recent Opinion of the Advocate General in the Tom Kabinet case (concerning the resale of e-books) that is currently before the CJEU confirms that the exhaustion doctrine is limited only to tangible, physical supports and has no application whatsoever to digital downloads (which are covered by the communication to the public right and not by the distribution right).
The Opinion concludes that:
“Article 3(1) and Article 4 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the supply of e-books by downloading online for permanent use is not covered by the distribution right within the meaning of Article 4 of that directive but is covered by the right of communication to the public within the meaning of Article 3(1) of that directive.”