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Court Of Appeals Ruling Threatens Sale Of Used Games?
Court Of Appeals Ruling Threatens Sale Of Used Games?
September 13, 2010 | By Simon Parkin

September 13, 2010 | By Simon Parkin
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    122 comments
More: Console/PC



The U.S. Court of Appeals for the Ninth Circuit has upheld the right of software companies to deny consumers the right to resell their products.

The ruling came as the result of a long-standing case involving used computer software sales on eBay, but its wide-ranging implications could threaten the resale of all digital content, including video games.

The case involved the sale of copies of AutoCAD, software that defendant Timothy Vernor had picked up in an architect's office sale. Vernor then put the software up for sale on auction site eBay, complete with serial numbers and a reassurance that no versions were currently installed on any other machine.

However, AutoCAD's developer, Autodesk, claimed the End User License Agreement (EULA) that users agreed to before using the software stated that the program was merely licensed, not sold, and that the user's license was non-transferable.

Furthermore, the agreement specified that, if the user upgraded to a new version of the software, the old version had to be destroyed.

Autodesk claimed that the copies Vernor had obtained should have been destroyed. Vernor counter-argued that, as he had not agreed to any license, he was free to sell the copies on and, on the verge of being banned from eBay, sued Autodesk to protect his business.

The court affirmed Vernor's right to sell the used software in 2008, but Autodesk appealed and last week the Court of Appeals for the Ninth Circuit reversed the earlier decision.

The ruling aims to distinguish between when a piece of software is sold and when it is merely licensed, with the user potentially unable to resell if it's the latter. The judge presiding over the case said: "We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions."

The ruling could have severe implications for other forms of digital media that are subject to license agreements, potentially preventing users from selling on their used video games. Indeed, Electronic Arts' standard EULA, while not mentioning resale policy, explicitly states: 'This Software is licensed to you, not sold.'

Libraries that loan digital media could also be subject to restrictions following the decision. The American Library Association, fearing that publishers could now forbid rental or lending unless libraries agree to more expensive licenses, filed an amicus brief in the case, which the judges reportedly showed some sympathy for, before concluding that they were forced to follow precedent.

The Court did, however, state that: "congress is free... to modify the first sale doctrine and the essential step defense if it deems these or other policy considerations to require a different approach."


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Comments


Fiore Iantosca
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Where are all positive suckups for digital download being "the next best thing"



I'll hold on to my PHYSICAL GAME, thank you.



This is BAD, very very BAD.

Richard Trevisani
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What's really bad is that even that physical copy is now under some form of control, enforceable or not. If you tried to sell it to someone by any means other than a person-to-person transaction, the company might pick up on it and sue you...

Glen Watson
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no other media puts resales on top importance over new than video games. It drives up prices on brand new games and hurts the industry over all. I can't wait for them to ban resales or work a deal with publishers and watch my game prices drop.

Jonathan Jennings
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making the re-selling of software illegal would be one of the stupidest things possible. firstly very few would abide by the law and even fewer would publicize if they do it . I think legally auto cad is correct in this issue as much as I hate to admit it but really they need to look at the long term of this issue. there are three possibilities a user can take if they don't buy it used. buy it new, possibly waiting for future price drops . Don't buy it if you don't like the new price but also be forced to keep content you may not use or want but is desired by someone else, and lastly pirate. in this day and age where computer literacy is improving and many valuable programs are just a web address away I feel it's idiotic to get rid of the ability to re-sale software. while the developers don't see any profit from those transactions they also suffer no true loss since the original content was paid for.



this will only encourage piracy of software across the board hopefully the decision is appealed.

Eric Geer
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With AutoCAD having a price of about $4000 I'm sure that the publisher is a bit pissed off that it is getting sold used..but at the same time the only reason the individual probably bought it was because it was at a discounted price...If they make the sale of used versions of this illegal, there will most likely just be a boom in pirating. But if this transfers to videogames--I think the industry will take a bigger hit than the gamers...I don't mind buying new games--but I know quite a few people that do--and if used is out of the question---then we can see an increase in pirating and a decrease in industry growth--not to mention that videogaming publishers have less to lose on selling a used game compared to AutoDesk/AutoCAD and a used program.

Tom Baird
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Playing a little bit of devil's advocate here, even if 100% of all used game purchases would turn to piracy(absolutes are ussually unlikely though), the developers would be unaffected. This is because a used game purchase already doesn't add any money to their pockets. The only part of the industry that would see a shrink would be shops that rely on Used Game sales (like GameStop). Everyone else has a potential to see increased profits (so long as even a small few people who would have bought a used copy now buy new)

That being said this is still pretty extreme, and if not appealed could have major effects for places like GameStop.

Ujn Hunter
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You'd also have to assume that 100% of the people who would buy the game new didn't have any intentions of reselling the game. If a person who would normally buy a game new to play and resell it can no longer sell his game, he might turn to piracy instead also. So you still could be losing sales. Also keep in mind that a decent amount of people do the trade 4 games in get a new game free thing at places like Gamestop. If they had no way of trading in those 4 games for that 1 free new game, then they may not have bought that game either.

Glen Watson
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But the flipside, 4 other gaming companies(4 games) lost out on sales because consumers bought those games instead of new ones.

Domenic Bentz
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While that is true about the content on the disk, you must keep in mind that this transaction may lead to the second hand owner buying downloadable content or becoming a fan of the series and buying new later. If the person pirates a game then they will not have the option to pay for downloadable content and will probably pirate the next release.

Andy Lundell
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I'm unconvinced. You're only looking at PART of the system as a whole.



Without the incentive of selling their old games for money to buy new games, many people would play their old games for longer before purchasing new ones. (Or simply play less games.)



Many people buy games knowing that they can get part of their money back. It's like a mail-in rebate. They know that their $60 game "really costs" about $45. That's a huge price difference that has to be driving sales.



No one would claim that mail-in rebates don't have the potential to drive sales.



Remember Gamestop doesn't manufacture a bunch of used games in the back room of their shop, they get them from customers.

Chris OKeefe
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In terms of the game industry, publishers and developers don't see a dime from used copies, so it really makes no difference to them whether an individual gamer buys used or pirates, from a financial standpoint.



Obviously, the more people pirating the more copies will be available and the easier piracy will become, but for people who habitually buy used games, they aren't actually consumers for the developers/publishers, they are consumers for Gamestop or whatever venue is turning these games into a profitable business.



So I don't think that making used games illegal is going to hurt the game industry in any direct way. It will hurt Gamestop, at least. But they're just one distributor.



Indirectly it could feed into piracy culture by diverting the used game audience into piracy. While neither group is actually profitable for the industry, piracy itself is a culture of momentum and simply having more pirates could have indirect consequences in the longterm. Hard to say.



I'd rather see laws in place that force used game venues to provide percentages of used sales to the developers/publishers whose games they are profiting from, but I suspect that any significant reduction in profits in the used game business would kill it regardless.



Still, it seems more legitimate than a wholesale ban on used games, whatever the end result.

Andy Lundell
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(I was replying to Tom Baird. Didn't realize the comments didn't nest that deep or I would have made that clear.)

Tom Baird
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@ Andy Lundell

I'll admit it was pretty simplified, but it ends up boiling down to, will the people that used to buy used now buying new offset the people who are buying less because they don't get trade in discounts.



Knowing how GameStop pushes the used copies (Wanna buy this for $10 less? Sure why not) I am gonna lean on a lot of general consumers who previously got a used copy getting a new one instead. I see a lot of people coming up with a new copy getting it converted to a used sale.



But that's all anecdote and assumptions so we are going to have to see. Overall though I think that even if the developers go for stopping Used Sales outright they will see a small profit. But they have a vast array of options now open to them (a possible one being used sale royalties).



But with the varied mechanics of EULAs, I hope that their becomes a standardized EULA and I don't have to check each individual publisher EULA to double check on reselling/trade in mechanics.

Jonathan Jennings
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also for the used versus piracy debate the potential sales are lost. of course not every pirate would have bought the game an all that. but I would love to see an estimate on how many downloads a pirated copy of a game gets versus how many times a used game changes hands. eventhough used games can often times be traded in I would assuem at max the game changes hands what 10 times? if a pirated game is released on the net it can potentially have thousands or tens of thousands of downloads. even if we assume not all players from either crowd would have purchased a game I think it's safe to assume possibly 1 in 10,000 pirates may have bought the game versus 1 in 10 used players.

Maurício Gomes
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Ok, I am from a poor country, and I have lots of poor friends, and our biggest wish is that gamestop showed up here.



I am not into selling games (because I like collecting them), so I just wait until the price drops to around 15 USD or less (the amount I am willing to pay at most)



But some of my friends that does not mind selling games, do this:



Buy used game for 50 USD. Sell it for 10 USD. Buy another game for 50 USD, using the 10 USD from the previous, sell it for 10 USD... and so on.



The end result is that they know that they are paying "only" 40 USD in a game, not 60.



So if this law was legal here, this would mean a 50% price increase in games in practice, and people would just pirate them instead (like they already do...)

Tom Baird
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It's $50, because you are counting the trade in on the next sale, but also counting the subsequent trade in to the initial purchase of it.



It is a price increase, but if these people were prone to piracy, why would they be purchasing the games in the first place, even if at a discount? $40 is more than $0. People already pirate games, and getting a pirated copy is pretty easy, I find it somewhat difficult to believe that a games cost going from $50 to $60 (and you keep your old games) will suddenly completely change his purchasing habits, and moral decision on piracy.

Maurício Gomes
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People here BUY pirated stuff, it is not 0 the price of a pirated game.



It is usually 5 USD per disc, and sometimes the game is sevreal GB big and only available in CDs...



I already saw some pirated games get more costly than the original copy (and yet people prefer the pirated... usually because of something that it has better than the original, like no DRM... or the dealer accepting returns)

Glen Watson
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Chris O'Keefe I totally agree with you, I think this is the best solution.

Keith Patch
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What would this mean for places that rent out video-games?

Ujn Hunter
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It would be illegal.

Mark Harris
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Not necessarily. Rental houses normally have special contracts that allow them to rent their licensed material, both movies and games.



It's all about the contractual agreements, since they can supersede the EULA easily enough.

Z Z
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That's okay the people that "sell" used games can just say (in their hand written EULA in the case) they want to rent or license their game instead of sell it. Then the people that get it (gamestop, some guy over ebay) can rent or license it again, and so on and so forth. A different word for the same action that is all AutoDesk did and that is all used game sellers would have to do.

Mark Harris
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Breach of contract. It specifically says that the license is non-transferable, so unless you have a separate contract with AutoDesk or other copyright holder allowing you to rent out licensed property you're still in breach.

Ujn Hunter
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'This Software is licensed to you, not sold.' should be illegal in itself.

Mark Harris
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Writing clear, unambiguous text in contracts should be illegal?

Prash Nelson-Smythe
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Mark Harris,



Contracts are not the be all and end all in law. For example, if I contract you to kill someone, you are not legally obliged to do so. Employment contracts are often heavily skewed in favour of the employer, with many of the clauses not really valid because they violate the employee's rights. The contract is still allowed to exist, but if it comes to court it will not all be enforceable.



There is a similar scope for ambiguity in software contracts, since people have consumer rights that cannot be contracted away.

Mark Harris
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It was a joke, tongue in cheek, I suppose it is too vague.



We're all versed enough in law through the news cycle to know that some clauses in some contracts won't hold up in court. But do you really think that this part of a EULA is in the same category as contract killings and contracting away your right to a fair trial? It does not take away rights and doesn't compel one toward illegal acts. No one has a right to someone else's property. In this case, the game software belongs to the company or person that created it. They have the right to sell licenses for use rather than sell ownership of their code. Much the same as an arcade game sells uses or an amusement park sells access to rides.



I don't understand why so many people want court decisions and new laws just to change things with which they don't agree. Is it okay to write a law that determines how and when software can be sold by private entities? That is by far a much greater violation of rights than anything any game company has ever done.



Just because people don't like how the contract is written doesn't make it illegal, and asking to make it illegal for a software vendor to sell their software as they see fit is absurd.

Joshua McDonald
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I second Mark. You don't have a "right" to own a piece of software that somebody else created. It may or may not be bad business for them to license instead of sell, but the creators of software have the right to set up an appropriate contract just as the customer has the right to refuse it.



So many of the laws that ruin the economy are the result of people believing that they have the right to what other people have produced.



The one issue is with software boxes that say essentially "breaking this seal is an agreement that you will abide by the EULA inside". Those should be thrown out of court because you have to agree before reading the contract, which is a different matter entirely.

Mark Harris
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Good point on prior visibility of the EULA. I think Adam Bishop mentions that in a comment farther down. That should be more clear to potential buyers.

Dave Mark
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Not weighing it either way, but AutoCAD is a tool that is meant for continual use. It has inherent reusability much like you never get tired of a hammer... you only need it again. A game, especially one that is story-driven, is NOT necessarily meant or built for reusability. Once you have played through it, you are kinda done with it.



The difference being, AutoCAD is only benefiting one user at a time as a tool. Just like selling your hammer to someone else. The story and play experience in a game can be passed on and on and on with each person getting exactly what the developer intended -- the (generally) one-time experience of play-through. However, the developer only gets paid once.



Beware of apples and oranges.

Mark Harris
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Good point, and in addition AutoCAD is almost always used to generate profit for the user. Not so with video games. Most people don't use Simcity to architect a skycraper.

Renee Johnson
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So, then, will selling used books be next? If this does end up being applied to games and other one-time-use media, then dangerous precedent is indeed dangerous.

Mathieu MarquisBolduc
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What another great way to encourage piracy. How many people will turn to pirated copies when they find they can't resale the ones they buy?

Chris OKeefe
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As I said to a comment above, it matters little to the publishers/developers whether a copy of a game is bought used or pirated. They don't see a nickel either way.



It is just as likely to turn an individual from a used-gamer to a bargain-gamer who waits for prices to drop. At least in that case the developer gets paid.

Jonathan Jennings
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that is very true but in the grand scheme of things gamestop is also considered a portion of the game industry correct? while their sales won't affect developers I do feel like it would affect the industry and its growth.

Maurício Gomes
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Except, bargain-gamer pay LESS to developer than a used-gamer.



See my post upward, but plainly the "default" used-gamer that buy from gamestop for 50 USD, to resell at 10 USD, and use that 10 USD toward buying another game, is constantly shelling 40 USD, and this money eventually ends with the developer (or via original buyer, or via gamestop buying more games, or via someone using used games money to buy a non-used game).



Bargain-gamer will wait till it is 15 USD or something like that.

Mark Harris
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Doesn't matter. Most bargain games are retailers liquidating supply, not publishers releasing lower cost games to retailers. The publisher already got the original cut from retail, and retail is just trying to move stock while cutting some loss.

Maurício Gomes
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Not really. I mean, there are those types of bargain, but I never saw that myself...



I buy "best-seller" collections for example, or from Steam when some game hit a crazy promo (I bought Half-Life 1 for 0.50), and the same apply to everyone that I know and buy games, with few exceptions of the richer ones (that buy games on launch happily... but richer I mean, wildly rich, like being in the upper 2% of the richest persons in the country).

Mathieu MarquisBolduc
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The buyers who sell their used games to buy a new day-one release, they matter to me. Especially if its one of my games theyre buying!

Mark Harris
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@ Mauricio



Gotcha, I thought you were talking about the bargain bins and deals from Amazon and Newegg, etc. I picked up Assassin's Creed 2 for $20 from Newegg because they were liquidating stock.



The Best Seller editions are great, and a good way for companies to keep some great games on the shelf with a lower price tag. Most always those are games that sold well in the first place and have already recouped their dev cost. Producing a low cost Best Seller edition work for pubs because they only have to cover the cost of manufacturing, not recoup dev costs.



Steam sales are awesome, too. They do have a nice business model, and those crazy sales help bring people to the site, get people hooked on different franchises, etc. You rarely see any new games in those sales, though.

Tori Kamal
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Not only is this a bad omen for places like Gamestop, but also places like Gamefly.



This also in my mind plays into a more abstract issue: If companies are really going to go this route, and start claiming that they are only selling licenses and not actual ownership, then they are pushing themselves further off the bandstand of "you are stealing property when you download music, software", etc.



Legally it makes sense, but as a consumer, if you're telling me I've payed some hard earned money for something and I don't even actually own it, I'm much less likely to want to pay for something that I can't even own.



Who would pay full price for a car if they could never own it, and thusly never sell it? The only way to fairly move forward in the digital age, is for people to have ownership of their digital products.

zoraida d
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Well thats something... can someone tell me where to buy new NES games?

Chris OKeefe
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I'm not exactly a lawyer, but I suspect that in the case of old media there will be an issue of indefensible copyrights. The laws may dissuade companies from explicitly setting up used game markets for stuff like NES games, but I don't think the law could prevent people from creating their own markets(using eBay or Kijiji or whatever) to resell old media, because a lot of these items have expired copyrights because the developers/publishers went out of business, or they otherwise have no interest in enforcing their copyrights(cost/benefit analysis doesn't exactly promote spending money on lawyers to protect products they no longer profit from).



I could be wrong, though.

Doug Poston
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IANAL but I don't think this covers *all software*, just software with a EULAs that state the user is purchasing an non-transferable license.



I don't recall an NES game, or any 'physical' distributed game, with such an agreement (but I haven't looked too closely). So I don't think this effects 2nd hand games...yet.

Chad Wagner
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Note: The copyright on a corporate work expires 90 years after creation. So the sale of software written before 1920 is probably fine. :)



If it becomes lucrative enough, I'm sure someone will arise out of the woodwork to defend the copyright of a defunct company (since the dissolution of a company does not relegate its products to the Public Domain).

Michiel Hendriks
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Can't wait till Ford starts licensing their cars.

Doug Poston
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They sort of do, it's called Leasing.

Michiel Hendriks
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Not the same, Ford doesn't lease the cars. Some company buys the car from Ford and leases it to you.

Doug Poston
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I'm not sure about Ford, but some auto companies do handle leases themselves.



But the point I was trying to make (other than I hate comparing software to cars ;) ), is that there are instances where the original manufacturer retains some legal rights to their product even after the point of sale. Including the right to restrict resale.



Bart Stewart's post, just below this thread, states it more clearly.

Bart Stewart
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IANAL, but there are some things you don't have to be a lawyer to appreciate.



Fiorentino I: "I'll hold on to my PHYSICAL GAME, thank you."



In terms of ownership rights, the delivery medium is irrelevant. The person who owns some piece of software owns it exactly as much if it's delivered for use digitally as if it's delivered on a disc.



Ujn Hunter: "'This Software is licensed to you, not sold.' should be illegal in itself."



Why? The point of "licensing" something is to make a distinction between using something and owning it. That legal distinction has great economic value because it allows a lot more people to gain the use of things than could otherwise have happened.



Licensing is basically like renting. When you rent an apartment, you don't own it. Someone else retains the ownership of that place; what you're paying for is the opportunity to use that place. Without the legal concept of "renting," the only people who'd be allowed to live some place would be those who own that place or who are explicitly permitted to live there. Renting allows vastly more people to be able to enjoy the use of a home.



Software licensing has the same effect. It allows the person who creates something to retain ownership of it, while providing a legal mechanism for allowing many other people to enjoy the use of that thing. Without the concept of licensing (as distinct from owning), everyone who creates useful things would have to make individual usage contracts, which would drastically reduce the number of people who could enjoy books, music, movies... and games.



Jonathan Jennings: "there are three possibilities a user can take if they don't buy it used. buy it new, possibly waiting for future price drops . Don't buy it if you don't like the new price but also be forced to keep content you may not use or want but is desired by someone else, and lastly pirate."



Another possibility is that enforcing licensing restrictions will encourage third parties to create their own versions of the desired software with less restrictive licensing terms. To put it another way, a strong defense of property rights helps to encourage economic competition, which generally improves both the quality and availability of desirable goods. It's actually to the long-term benefit of gamers to support contract law generally and licensing specifically as (I'm pleasantly surprised to see) the Ninth Circuit has done here.



That's not to say that software developers aren't free to loosen up their licensing terms on their own, or that Congress shouldn't be careful to define licensing law so as to protect the "fair use" of distributable works through libraries or for research. A strong defense of contract/licensing law doesn't preclude either of those things (as the Ninth Circuit's ruling pointed out).



But the bottom line is that "because I want it" is not and never will be a sufficient justification for taking someone's property without just compensation. It is absolutely irrelevant that something gets easier to distribute once it's converted into ones and zeros -- if the owner of that property sets rules restricting the transfer of that property (as is the case with most licensing agreements), then those rules ought to be respected and enforced. If you don't like that this makes some desirable good harder to obtain, the ethical solution is not to steal it (AKA "piracy") -- it is to go make your own version of that good and distribute it under your own (presumably looser) terms of transfer.

Dan Robinson
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"If you don't like that this makes some desirable good harder to obtain, the ethical solution is not to steal it (AKA "piracy") -- it is to go make your own version of that good and distribute it under your own (presumably looser) terms of transfer."



This works somewhat as long as the exclusive right to an IP is non-existent. Any developer can make a NBA properties licensed game, but only one can make a NFL licensed football game for most devices. This form of licensing would work for games that can be played on anything but a console or portable system. Can you imagine Sony or Microsoft allowing a title published with the GNU Public license on their systems?

Ujn Hunter
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I disagree. Software licensing is just "I want more money while you get less of a product". It has nothing at all to do with "allowing more people to enjoy this product" it isn't even a product anymore... it's a subscription service.

Jonathan Jennings
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I agree entirely Bart you make absolute sense but then again I am no pirate and eventhough I often buy used when I see a game I truly desire I will purchase it brand new. the problem is though how many people in this day and age honestly care to actually pay for something they can get for free even if its illegal? granted people are not justified or entitled to take content that is not theirs but they will any way. the attitude of pirates is very insensitive to Developers for the most part the general consensus is " the other suckers will pay so why should I?" . eliminating the used market will just sadly move more people towards getting games in illegal ways rather than promote buying more new copies. I tend to be a pessimist when it comes to human behavior so I would love to be proven wrong but considering I am a child of the younger generation and I know pirates that span every demographic from amateur developers to kids who don't know better I certainly have little faith .

gus one
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Bart makes an interesting point. The pharmaceutical industry can only patent a new drug for so long. After which any firm can copy it and sell it as a genetic/biosimilar and sell as their own. Of course since they did no research they are then a hell of a lot cheaper than the original which was expensive so the creator could recoup the investment while it was protected by the patent.



For example it would be interesting if another firm/studio could produce a CoD Modern Warfare variant other than ATVI... it might even be better who knows....

Mark Harris
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Gus, you're commercial enough to know that this would just drive up initial game costs, or ruin original developers in the first place.



You said it yourself, the people actually creating new drugs have to charge outrageous prices so they can recoup some of their research cost before some vulture takes their formula and starts producing a cheaper variant. Perhaps if drug patents lasted longer the original creators could sell it for less?



I dunno, video games aren't quite as essential as medicine, so long lasting copyrights shouldn't be a problem. And isn't EA making a Modern Warfare clone called Medal of Honor that may or may not be better?

Wojciech Lekki
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I completely agree with Dave Mark! There is a huge difference between a software that you use for work and games.



Companies (which in majority buy tools like Auto Cad and not games) can be easily a subject for a software control unlike private single users. This means that piracy is greatly reduced by this fact because using a pirated software in a company environement with many employees would be quite risky.



In my opinion expensive software tools like Auto Cad should be sold not licensed since the company that uses it is unlikely to sell it to somebody else (the hammer example by Dave). Such situation would also greatly benefit the actual developer of the software because if the tool is merely licensed it can not be used as collateral in a bank loan. If it can not be used as collateral it means that in practice you need to buy it for cash because no bank will lend you the money for it like it would be with a company car which can be used as collateral.



Basically purchasing full package of software for many emplyees can be a really serious cost. If it would be sold it could be used for collateral by the bank meaning that in the long run more companies could afford it - resulting in more sales for the developer. Preventing resale of the software is in my opinion very short sighted and results in increased piracy.



As for the games the physical/digital copy aspect has nothing to do with it. If the agreement states that the games is licensed and not sold you can not legally sell it even if you have the physical disc.

Ujn Hunter
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Would stores/manufacturers of these "licensed" games be required by law to put huge signs and stickers on their packaging telling (warning) potential customers that they don't own what they buy?

Chad Wagner
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I've never read a license for any game or piece of software that didn't state that it was licensed and not owned. Ever since Microsoft first created the paradigm with their operating system DOS. So the giant sign should be on the entire store!

I'm not aware of a single piece of software you can actually "own." Is anyone else?

Scott Thomack
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This will not be an issue. The wording is what will allow developers and publisher to get a percentage off all games sold new or used. When you sell a game to GameStop what you will actually be selling is the licensing agreement. Therefore what they will be selling used is the licensing agreement.



Nobody in the game industry wants to hurt game sales. The developers and publishers don't want to put GameStop out of business they just want their cut.



Worst case scenario will be that used game prices will increase to compensate for the additional fees going to the developers and publishers.

Tom Baird
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It's important to add to this discussion is that it is not retroactive.



Game EULAs do not have cannot trade/resell clauses (I'm pretty confident none do but there could be exceptions).



This court case allows them to add these clauses, but they cannot implant it into older games effectively.



It also means they do not need to, although currently it could be within their interest to implement these, however as EULAs are currently different per game it will affect different games differently dependant on what the publisher wants.



In the end it just reiterates that EULAs are legally binding and that the developer/publisher has control of the software he creates.

Chad Wagner
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I have read many licenses that include these "no transfer of license, no resale, no LENDING" clauses. I'll go look them up and make a blog post with some, so people can lament the impact...

Abraham Tatester
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For what it's worth, Newtek, maker of LightWave 3D has absolutely no problem with you selling on your used copies of their software. They even have a form available to ensure legal transfer of the license.



Given that a dongle is needed to run the software, I suppose they feel pretty confident that no funny business will occur.

Kim Pallister
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WRT the ruling, interesting that the stock market doesn't seem to have cared, as least as far as Gamestop is concerned. Hmm.



WRT the used game debate, I think it's overblown. Many devs moving to new biz models and game designs anyway that will render the used titles less valuable over time. The gamers will respond by demanding more of their games and/or lower prices when they take into account that they can't resell. The market has a funny way of working itself out.



@Bart:

>The point of "licensing" something is to make a distinction between using something and owning it. That legal distinction has great economic value because it allows a lot more people to gain the use of things than could otherwise have happened.



Disagree. The economy of scale happens whether the game is sold or 'licensed'. The "license not sold" thing is is a very deliberate tactic to end-run the doctrine of first sale. No more complicated than that.



To be clear, I have no problem with it, but the industry should be honest with consumers. Don't use the word "buy" at retail, for starters. Use 'rent', 'license' or 'purchase access to the game' or some such thing. Buy implies ownership, and property ownership carries with it an implied value and utility.

Juston Gaughan
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I think that if these software companies want residual profits off the sale of used software that they have had no hand in selling or in supporting of selling, then they need to create a business model that has an inherent benefit to the end user surrounding these used markets (Autodesk, I have a used version of Maya that I was thinking of selling to a friend for educational reasons, but if I cannot, are you going to buy it back from me??!!).



I live by used software and equipment being a private developer and artist within the video game industry. Most companies I work for understand compulsion cycles.



If used software will go up in price (lower ROI for seller), then what compels an owner to even offer up a title for used sale? Inadvertently increasing the price of used software will create an inverse effect on the amount of used units sold.



I prefer a free market for used products, it's the only business model that has a benefit for everyone involved in the transaction (which is not you Autodesk, we already paid you).

DanielThomas MacInnes
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"However, AutoCAD's developer, Autodesk, claimed the End User License Agreement (EULA) that users agreed to before using the software stated that the program was merely licensed, not sold, and that the user's license was non-transferable."



The question of licensing software seems to concern business retail, and not retail video games. At least, that's what I understand. Skilled lawyers, however, can use these definitions to rewrite the rules on used sales, rentals, etc. How far is the game industry willing to push for that outcome? How they respond to this ruling (and eventual appeal) will be very telling. We will see just how healthy or weak the video game business truly is.



I can't imagine this industry would block or ban used game sales. Some executives crow and whine, of course, but this would amount to a defacto prohibition of ditigal media. Who is willing to spend their dwindling fortunes chasing after retailers, online import shops, eBay, and Craig's List? Such a move would make the music industry's war against music downloads seem tame by comparison...and it would prove equally suicidal.



If the game industry wants another Crash of '83, then bring it on.

Jerry Hall
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Opinion for the upcoming MDY v. Blizzard should be interesting after this Autodesk ruling.

Brett Williams
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Is this not already present in the EU under droit de suite? or since games are not art, they don't apply? Seems like a similar concept. It does not stop the right of transfer, it simply taxes it. A fee is applied during the transaction from person A to person B. Similar to how you pay taxes on a car when you buy it from someone.



I don't know how this would affect the industry, or the consumers, but from what I can tell it would help the developers, and possibly hurt the consumers.

David Brady
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I can only hope that this policy is placed on EVERYTHING, including (but not limited to) records, CDs, books, VHS, DVD, Blu-Ray, stone tablets, parchment, and radio. Because I think that's what it would take to get this law changed.



http://freakonomics.blogs.nytimes.com/2010/04/21/have-you-acciden
tally-sold-your-soul-lately/



EULAs are a joke. They've always been quasi-evil. Now they are full on evil.

Mark Harris
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@ David Brady



A EULA that tries to take from you what is rightfully yours (soul, first-born child, etc) won't stand up in court. However, one that defines that use of the copyright owner's material will.

David Brady
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Neither should a EULA that restricts your right of first sale.

Mark Harris
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The difference is that in this case, the creator of the software is selling you a license to use it, and specifically restricts you from transferring that license. They aren't contracting away something that was yours to begin with. That's how it breaks down logically, and I imagine in court as well.



No one forces you to license software, therefore you willingly enter a legal contract that doesn't strip you of any rights you held prior to licensure.



It might suck, but it's still legal.

Steven Stadnicki
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From the decision: "We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions."



The 'out' here for game sales is (2); Autodesk takes exceptional efforts (they used to use USB/parallel dongles) to keep users from transferring software, above and beyond what virtually anything else does, so they have a much more compelling case to make with respect to having made it clear that they were only granting a license all along. While I'm not thrilled with the results of the case (and of course with the usual IANAL caveat), I don't think this will substantially change the First Sale provisos for most software.

Neisha Bergman
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I completely agree with the judge's decision in the case. I don't, however, agree with Autodesk. The resale of an obsolete piece of software does nothing but help them in the long run, establishing a user base that will be willing to purchase the suite from them at a later time. Most casual people can't afford to throw $3,500+ at a piece of software that will be out of date in less than a year and for the most part, not compatible with the newer versions. (I'm specifically referring to 3DSMax 8 to 9. Files created using 8 could be opened in 9, but couldn't go back to 8. A huge issue, especially for a student who'd somehow scrapped together enough cash to buy 8, and couldn't afford to update 3 months later, when the school updated all their systems.)



By dismissing the software's resale, they're basically cutting off groups of people from subsequently learning the software, at least without pirating the software.



I don't see how this could really apply to console video games, as I've never personally had to sign a EULA for any of them (do they even exist?), though PC games will be in serious trouble with this ruling. Unfortunately, I don't see any real solution, as getting the government to regulate the software companies would be a tremendously bad idea (much like the idea of the government getting their hands into, well, everything!).

Bart Stewart
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A parallel to this is the Real Money Transfer (RMT) issue in massively multiplayer online games.



The EULA and ToS agreements in most of these games make it clear that you (the player) do not "own" any of the items in the gameworld even though you (the character) can act as though you do. So you're not allowed to contract with another player to "sell" in-game items for real-world money since you -- the player out in the real world where the real-money transaction takes place --- don't actually own the goods being traded.



(This gets a little weird in that the goods in question are virtual. A sword only exists in a gameworld... but the ones and zeros that define that sword are supposed to be real things that exist on a database and that can be and are owned by the game's operator. Just remember, if ones and zeros aren't legally protected as Real Things, then no form of software is ownable property -- at which point kiss the computer game industry goodbye, along with an enormous fraction of the world's current wealth.)



As with software applications, the point of licensing access to items in MMORPGs is to establish a legal framework under which you can have the use of desirable goods without establishing a claim of ownership over those goods. That's such a Good Thing that it's why the Ninth Circuit pretty much had to rule the way it did -- the alternative would be disastrous.

Lo Pan
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Would enforcement of this law bankrupt Gamestop?

Tom Baird
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That would really depend on what publishers want to do with it.



The current appeal being talked about doesn't actually ban used sales, it just gives publishers the power to control used sales/trading. They could do all manner of things from outright forbidding it, to demanding royalties, to allowing it only through licensed vendors, to doing nothing different at all and allowing it.



This is mostly reinforcing the fact that an EULA is a License agreement, and therefore you do not get right of first sale, and that the seller can enforce restrictions which would otherwise be unacceptable.

sean lindskog
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I think game publishers should enforce this law to shut down major game resellers (game stop), then drop the price of new games by $10.

Alan Rimkeit
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Only $10? Try more along the lines of $20. Then we are talking...

Charles Forbin
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(facepalm)



Yeah, because shutting down a major retailer in this economy is such a wonderful thing.

sean lindskog
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(facepunch)(eyegouge)(jumpingspinkick)



You could shut down the game resale aspect without killing the retailer.



The game publishers want a thriving game retail business, just without getting cut out of the loop by used game resales.

Doug Poston
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@sean: If publishers could sell AAA titles for $10 and make a profit, they wouldn't have to worry so much about used game sales.

sean lindskog
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Odd how people keep misreading my post.



I said drop the price _by_ $10, not _to_ $10.

DanielThomas MacInnes
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I really can't see video game publishers trying to ban used game sales. Maybe they could muscle their way around Gamestop, but not Best Buy or Target. Remember that major retail chains are adopting the "used game" model.



This game can be played both ways. If any publisher tries to force Best Buy from selling used games, Best Buy can simply retaliate by not stocking their products at all. And just who is going to lose that little game of Chicken, hmm?



The game industry would be suicidal to sue retailers for selling used games. It is not going to happen.

sean lindskog
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> Remember that major retail chains are adopting the "used game" model.



And publishers will see their profits drop accordingly. Which is why they will be strongly motivated to stop it.



> And just who is going to lose that little game of Chicken, hmm?



In an age of increasing digital distribution, maybe the retailers. Who knows what the next generation of consoles will bring, maybe most games will be purchased digitally.



> The game industry would be suicidal to sue retailers for selling used games.



It might be suicidal not to.

Alan Rimkeit
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@sean lindskog - How are publishers going to sell X-Box 360 and PS3 games via digital distribution? How? Most of those games are over 10-15 GB in size for the PS3 games. Granted 360 games are DVD sized but the 360 user are severely limited by hard drive size and we all know how much Microsoft loves to rip off people for hard drives. Those are around $90 new. The majority of people have 20 GB or storage space and that is all. That is what, 3 games?



Forget digital distribution for consoles for this generation for games. It is not happening. Maybe next gen when the consoles all have over 400-500 GB standard and everyone has super fast internet speeds at their disposals. Then I could see it working. Though to tell you the truth a 1 TB sized HD for Blu Ray sized games would be a better solution. :D

sean lindskog
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Alan - agreed, it ain't gonna happen for this generation of consoles. I was specifically talking about next gen.



Publishers are having their hand forced to deal with both piracy and the used game market. Very likely these are serious factors in the design of the next gen consoles. Currently, a lot of games (especially PC) are shifting to online content to combat lost sales. As a game dev, I'd prefer if these issues could be tackled at a distribution level, so we don't need design our games differently to counteract these trends.

DanielThomas MacInnes
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Next Gen is an interesting idea. Where exactly are Sony and Microsoft going to get the money to build these machines? They've both hemorrhaged billions of dollars, burned their investors, and bankrupted half the game industry with $50 million videogames. Who's going to hand over another couple billion dollars...and for what?



And why should we, the consumers, just throw out our PS360s and buy, what, Super PS360s? The graphical power on these machines is mind-blowing. I grew up on Atari, so maybe I'm more appreciative of these things, but Modern Warfare 2 is just ASTOUNDING. I am literally stunned. And now it's no longer good enough? Now we have to get something more?! At some point, the kids just become spoiled rotten.



Anyway, hope you enjoy my comical old-dad rant.* But this illustrates the central fix of the moment: these consoles aren't going anywhere. I don't get this talk of Next Gen already. I really don't see the point, and I don't see what I get out of it, aside from yet another round of the exact same franchises I'm stuck with every other year. Malibu Stacey with a new hat.



Also, I do understand the desire for digital distribution, and it makes sense for a lot of reasons (mostly cost and environmental). But the public isn't willing to sign on, as PSP Go demonstrates. So developers and publishers are stuck. Here's a novel thought: maybe publishers shouldn't spend so much money making video games. Nobody put a gun to their head and told them to spend $30 million on a single title. If the market demanded that, then PS3 would be reaching 80 million consoles sold, not Nintendo.



Video game publishers need to bring down costs, period. Then they need to make games that people actually want to play, and want to keep. Period.







(*Also, there appears to be a frisbee sitting on my lawn. If one of you young gentlemen could be so kind as to remove it, please....)

Chad Wagner
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Microsoft has updated their software to accept USB drives. So adding swappable, unlimited storage space is now possible. $650 for 256GB...well, maybe it'll be cheap soon. :)

Mark Harris
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You can buy a 1 TB usb external drive for less than $100. Do these work as well or is it just thumb drives?



Cheap, easy, maybe loads a little slower but still probably faster than reading from a disc.

steve roger
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The one thing about this ruling that I think is a real problem is that it very well could backfire against the developers and publishers.



Gamestop and the other large volume nation wide retailers of video games that have used game sales that are a significant chunk of their bottomline, will certainly have a very difficult time remaining profitable or even just plain an ongoing concern.



I think that what could happen is that the retail outlets will close out the sale of video games around the country except in the large metro area markets. The impact on the gaming compainies is obvious--they won't have as many places to sell their games. Further, I would think that the retailers and their distributors will have raise their prices and even lower the amount that goes to the game companies.



These retail outlets are not powerless in this situation. They will have to play hard ball with the game companies.



Ultimately, I think this ruling will provet to be a pyrrich victory.

Alan Rimkeit
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Pyrrich is right. We all should know by now how many of the people in the video games community buy their new games buy selling their old games used! Publishers are being foolish if they think that all of these customers can afford to buy all of those game new out of pocket for full price! They simply cannot. It is IMPOSSIBLE. I as an adult cannot do it. We are literally talking about MILLIONS of honest paying customers who are young teens and twenty somethings who sell their old games to buy new ones. IT IS HOW THE SYSTEM WORKS AND IT IS HOW IT IS HAS WORKED FOR DECADES. GET USED TO THE IDEA.

Alan Rimkeit
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double post.....

Adam Bishop
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Here's an interesting question - other than software, can anyone think of any kind of product which is "licensed", not sold, without an explicit agreement stating as much *prior* to the transaction?



The places where one obtains games are all retailers - Amazon, Gamestop, Best Buy, etc. None of these stores typically act as licensors. So if I go into a retailer (and retailer has a specific meaning which does *not* include rental) at which all of the things I normally spend money on are things that become my property, and that retailer does not in any way make clear to me that they are selling a license, aren't I as a consumer on pretty solid ground to believe that I have purchased a product and not agreed to a license?

Adam Bishop
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To add on to that a bit, I went to Best Buy's web site to see how they advertise games. They're advertising pre-OWNED games (emphasis mine) which clearly implies a belief on the part of Best Buy that they sell rather than license games. The ad also says "SHOP for games" (emphasis mine).



If you navigate to their games page you'll find icons beside the games that say "Free Xbox 360 game", again, no mention of a license, and terminology typically used to imply ownership. Click on that icon and you'll be brought to a page that says "Right now, get any Xbox 360 game valued at $59.99 or less for free when you buy this LG 32" class LCD HDTV at $150 off the regular price!" Again, the phrase "get a game" implies ownership, not licensing. If you put a game in your cart and advance to the cart screen you'll see that it has a line that says "Product Total"; not "License Total".



You'd probably find similar things with just about any other retailer. What stores are offering to consumers is a sale, not a license. If what consumers are really paying for is a license, then that needs to be made explicit.

Chad Wagner
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I have been reading software licenses before using since DOS was released...and I have never seen a piece of software that actually allows ownership. Ever since Bill Gates first floated that paradigm. Can anyone claim any software that authorizes you to own it?



Many, licenses put restrictions on transfer of license, resale, LENDING -- and certainly decompiling and reverse engineering. This would never fly in an actual sale, of course. Imagine buying a kitchen table with the stipulation that you can't take it apart...you can't create derivative works -- like attaching anything to it, or painting it!



I remember when I first saw used games for sale and though "That violates those licenses...that's not going to last. When software companies defend their agreement in court." I'm surprised it took them so long!

Matt Ross
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oh cool. so, piracy it is then? cool. because, you know, it was a bit of a grey area before. but I mean OBVIOUSLY some company trying to charge us $4000 for a disk, and now saying we can't sell it on when we're done with it.... I mean, its got to be a joke right? and with the already rampant piracy on their software due to the MASSIVE price, clearly they just wanted to make it very clear to their few actual paying customers that they were suckers for ever paying money for software.



and in the middle of a terrible economic dip... where people are desperate to cut expenses as much as possible... It's just laughable...



I never thought I'd say this... but the companies trying to get a piece of the pie out of used sales clearly have the better idea...

Keith Thomson
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Here's the true problem behind this. When the company that originally owned these copies upgraded to a new version, their license to run AutoCAD was transferred to their new version. They essentially purchased an upgrade copy of AutoCAD and thus they no longer even HAD copies of the old program to sell. AutoDesk should be going after that company and charging them for a full copy of every old program they sold so that their licenses are current.



What they did essentially is like buying Windows Vista Retail copy, buying Windows 7 Upgrade, then selling the Windows Vista Retail copy after the upgrade was installed. Once they do that, they no longer have a license to actually run Windows 7 Upgrade!



But Autodesk isn't going to do it that way because the other company is an active customer that will buy more upgrades and they don't want to piss them off, even though they are the ones in the wrong in this case. And in the process, completely wreck the copyright laws in the country.

Alan Rimkeit
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I have to say this is bad for the most important person in the video game industry, THE CONSUMER. They buy the games. That is the end all be all of the story right there. In the end if the industry bans the sale of used games it will back fire on us all...

Mark Harris
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No one is going to ban anything. The retail channel is still too important for publisher to piss them off, especially with T and BB doing the used game thing. For now we'll just see bonus DLC for new buyers and various versions of the Online Pass.



And honestly, it doesn't hurt consumers for the publishers, since used game buyers are not consumers from the publisher, only from the used seller. Yes, there is overlap, but for any given used sale it holds true. Buy new, even if you wait for a price drop, or be prepared for developers and publishers to not give a crap about you.

Adam Bishop
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@ Mark



This is an extremely short-sighted approach. Let's take a hypothetical person who buys 2 games per month. This person buys 75% of their games new and 25% used. That means they buy 18 new games a year. If the industry makes that customer angry by attacking the used game sales that make up a relatively small portion of that consumer's overall purchasing, that person may go out and buy the remaining 25% new, but they may also get angry and just buy less games, period. So if that person now only buys 1 game a month, 100% of them new, publishers have just lost a third of their sales from that person. That's a huge net loss for publishers, not a net gain.

Mark Harris
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Hypothetical, if, maybe.... I know we have to use these words because we can't predict the future and we can't predict how any given policy will effect gamers, but it remains that those situations are so unpredictable that we can't base our business decisions on them either.



A publisher has no responsibility, nor any will, to do anything for used game buyers. I'm not sure what you think is short sighted, since nowhere in my post did I advocate eliminating used games sales, attacking used game buyers, attacking eBay-ers, etc.



I merely said that publishers don't care about used gamers, and they don't, they have no reason to care. That said, they are using the information they have: their cost numbers, their revenue numbers, Gamestop's revenue numbers, etc and making some decisions.



Those decision come in two forms : DLC for new buyers, and Online Pass et al. These two things address two issues. The first tries to entice gamers using special shiny objects to buy games new, and therefore contribute to the game creators' revenue instead of just padding Gamestop's (and T and BB now) pockets. The second looks to recoup some ongoing infrastructure cost (lets not actually start that argument again, the last one was well over 100 comments) from used game buyers who play online.



How is any of that short sighted based on the facts available? You can't base your business decisions on maybes and hypothetical game buyers. Even so, the two major things publishers have done to increase their revenue vs. the used game retailers are not very onerous at all. They are small, logical, reasonable steps to shift some revenue back in their favor. Neither approach seeks to shut down used game retailers, force people not to buy used games, demonize used game buyers and sellers, or any other phantom we can cook up.



What is short sighted about not going the extra mile for people who deliberately choose to use your product without compensating you for it and/or giving incentives to those who contribute to your revenue stream?

Adam Bishop
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What I see as short sighted is thinking that it's OK to anger or annoy used game buyers because hey, they're not your customers anyway. That's obviously true in the case of an individual purchase, but I don't believe in any way that it's true in the aggregate. The consumers of used games are *also* the consumers of new games. If you anger them in one instance, it's going to come back to bite you in another. What is short sighted is pretending that "used game consumers" and "new game consumers" are not the same people. If you anger enough of your customers for long enough, they'll stop being your customers. And regardless of whether or not publishers see it this way, *consumers* very much see these kinds of moves as attacks on them, even if they aren't frequent purchasers of used games.

Alan Rimkeit
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@ Mark - This article is about making the resale of software (AutoCAD software) not possible because of licensing issues. Now, if video game publishers were to follow the same route the it would in effect make the used game market illegal, or at the very least under their direct control.



What would it mean for it to be under the used game market to be under the direct control of game publishers? Well, I would imagine that companies like Game Stop would have to give them all a cut of the action. But for the little people I would imagine that selling games on places like EBay would not longer be allowed since giving game publishers a cut would not very well be possible.



This whole issue is very much a direct threat to the entire used games market, which by the way does support the buying and selling of new games. Hows does it do that? People sell used games to buy new ones all the time. It is a common practice that has been happening for decades. It is how the system has been working for a very very long time.

Mark Harris
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@ Adam



Huh, okay, then I'm surprised there has ever been a price increase on any good in any industry at any time. That is decidedly anti-consumer and risks angering your customer base. Oddly enough that happens every day in every industry across the world and business continues. The trick is balancing how much revenue you extract from consumers with the perceived value of your product. That's how you maximize revenue without tarnishing your brand. It's a very inexact science and some companies screw it up royally. However, most consumers understand the shifting nature of retail prices and adjust accordingly. Some people will get mad that game companies are taking some extremely minor steps to increase their revenue, but those companies are betting that the increase in revenue from these measures will outstrip the loss from angered consumers.



I, like you I'm sure, have seen a lot of short sighted business practices in recent years (decades, even) but I don't think that Online Pass and DLC for new buyers fall under that category.





@ Alan



Theoretically, yes, this could effect used game sales. However, at this point in time the retail channel is too important for publishers to go around pissing off major retail chains like GS, BB, and Target. It would cost pubs too much both short term and long term for them to actually try to shut down used game sales. Right now I think they'll continue to find ways to give incentives to new purchasers and recoup online costs from used buyers rather then directly attacking the whole used game trading paradigm.

Alan Rimkeit
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@Mark - All I am saying is new games and used games have to find a way of coexistence next to each other because it is the nature of the business. "giving incentives to new purchasers and to recoup online costs from used buyers" is not the way 100%. Sure it is a fix. It will work part of the way and make some money for the pubs and devs. But is it NOT going to make up for getting rid of the whole of the entire used games market and can never do so.

Mark Harris
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I think we're saying the same thing.



Publisher have no intention of trying to "destroy" the used game market. They're merely doing a couple minor things to scare up some extra revenue without pissing too many people off.

Jason Johnson
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Aren't people getting a little ahead of themselves? A 9th Circuit Court ruling only applies to its jurisdiction, and, if I'm remembering correctly, other Circuits opinions are often quite contrary to the 9th. I don't see how this ruling is even enforceable. People in California could buy used software, but not sell it?

Dorica Prostel
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This Cracked article seems relevant: http://www.cracked.com/article_18513_5-insane-file-sharing-panics
-from-before-internet.html



And lets be honest, licensing software is simply a way to bypass the first sale doctrine... which exists in the first place because of companies trying exactly crap like this: http://en.wikipedia.org/wiki/Bobbs-Merrill_Co._v._Straus



When was the last time anyone rented anything for a flat fee at the start and then was able to use it forever?! And even so, i don't understand why i shouldn't be allow to lets say rent the apartment i'm renting to someone else as long as legally i'm still allowed to use the apartment space... or is that why they had to put in the EULA that you're not allowed to give the license away...

Mark Harris
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In every case I've ever seen you have to get permission from the rental company (the actual apartment owner) before you can sub-lease an apartment. You can't just lease it out again, or sell it off, or let someone take over the lease without prior permission from the rental company.



Same here. You license the use of the software, you agree to the EULA that restricts you from transferring the license, and you need special permission from the software owner before you can legally supersede that EULA.

Igor Petkovic
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@Mark



I don't know why so many people keep comparing licensing software to renting an apartment. These situations are completely different, just as pirating software is not the same as stealing a car.



If I am the hypothetical rental company I have a finite number of apartments that I am able to lease. Also I am subject to many laws and regulations that restrict my ability to alter the price of rent and/or evict tennants. This means that if a tennant sub-leases the apartment without my permission they are effectively locking me in to a certain price point and/or taking away my opportunity to recieve market value for the apartment that they have vacated.



Conversely the software company can create a virtually infinite number of licenses for little or no cost. This still allows them to set their own price point and distribute their product as they see fit. The sale of a used license is therefore the loss of a "potential" sale at worst.



Furthermore when leasing property the realtor is required to bring that property up to a specific standard of livability etc and then to perform neccessary maintenance to maintain that standard.

No such provision is made for software. (That I know of, correct me if I am wrong). A software company can sell you a "license" for the buggiest PoS, provide exactly zero support and you often have no recourse.



Anyway, enough of that rant. I do actually agree with you that legally the software companies are in the right but I think the whole idea of licensing software in this way is ridiculous. If they want to do it this way just move to the damn subscription model already and bring the prices way down. That way when I spend a couple of bucks on a weekly license for software that turns out to be buggy c**p I can just say "Oh well" and move on with my life rather than being stuck with an expensive paperweight that I'm not even allowed to sell.

Mark Harris
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@Igor



I actually hate comparing software to any physical good, be it real estate or cars, because the comparisons are always flawed. Software is a digital good subject to easy consumer reproduction (in addition to the easy manufacturer reproduction) and therefore fundamentally different from a physical good (computer, car, desk). I was replying to Dorica, who thinks it should be legal for her to re-rent out her apartment as long as she is still the contracted renter. She doesn't have the right to do that for the same legal reasons she doesn't have the right to sell off or rent her software since in either case she is not the OWNER of the product. I agree that there are so many confounding details that a true comparison is absurd.



The market, I think, is hopefully heading in a direction that will let you test damn near any software before you buy it, or at least let you cheaply "rent" a game or other software for a short period of time and if you decide to buy then subtract the rental price from the full purchase price. Perhaps an alternative to OnLive or more in the model of Steam that lets you download and play a final product (beyond the limits of most demos) for a limited time before you decide to buy is not far from realization.

Dorica Prostel
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@Mark Harris



Actually the way i understand it is that, unless the contract states you're not allowed to sub-lease the landlord can't legally stop you from doing it (as an individual at least). Company to company might be a bit different, or it might just be that having a sub-leasing contract is safer for all concerned.



Of course i guess that could depend on the legal jurisdiction you're in.



And as you noted, it's the EULA that restricts you from transferring the license, so it's the seller putting in conditions in the contract.



And no one was talking about selling off the apartment, just like you can actually sell the copyright to the software.

Actually looking at your previous post it looks to me like you misunderstand some stuff... when i buy a copy of a book i don't actually gain the right to that IP in any way, simply the right to that copy, including the right to sell it to to whoever i want. The author still OWNS the words in it. Same with software, even if i where to buy it instead of getting a license for it i would not OWN the code... but they couldn't put any clauses that overwrite the first sale doctrine if they actually sold it. Check out the wiki link i posted up there, the 1st sale doctrine was actually exactly about stuff like this.



@Igor

Well i didn't start it, and comparisons don't actually have to be perfect anyway...



@Mark Harris's 2nd post

Oh, and as you put it yourself, you're already just renting the software product... and shareware already exists, not that you see it much anymore.

William Collins
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Why would dev's/pub's pursue a similar legislation when digital distribution is catching on? Once you download a game through a purchase it'd be stored in your console. Treating a console like a computer by giving it it's own IP address and each instance of downloaded software it's own serial number could limit piracy by denying access to the game by consoles whose IP addresses differ from the one registered to the software. The same would occur for a physical copy except that when it's sold to a retailer, such as Gamestop, and then resold to 'budget gamer' it'd have to be re-registered on his/her console and this is where dev'/pub's can get a piece of the pie by charging a fee for this "service".



This may open up video game software to being hacked with keygen-type codes, similar to what happens to 3DS Max and Maya, but given the amount of video game releases each month these hackers would have a time trying to keep up with new releases.



Another possibility is the retailer assuming ownership of the physical copies of software (since they DID purchase it from the dev's) and then leasing it out to consumers. This could occur by following the Redbox model where you are charged "x" per day for the first week, then "x/2" per day for the second week until the item is paid in full. Incentives could be offered for purchasing/renting multiple titles at once. If you have all the newest releases available to you at little cost and before they are available in pirated form by bootleggers, then this would cut down on piracy. ALSO, why pay $60 in the first place for a game you beat in two days? Anticipating this, retailers may charge a higher fee for the first day (say $10). Suppose a game gets returned two days later because 'hardcore' gamer is ... your know, hardcore, if this happens three times in a week that retailer just made $30+ off the same copy of said game, still OWNS it and can still sell it for close to full price if a consumer exercises the "paid in full" option. I'm sure retailers are toying with this "Redbox" concept, especially after seeing how it (along with Netflix) crippled Blockbuster and other rental chaings. I smell monopoly ...



Lastly, if retailers did follow any of the proposed scenarios and seeing as how Target, Walmart, etc stand to gain substantially from used game sales, publishers just need to band together and raise the wholesale prices of their software. This may trickle down to the consumer, but as digital distribution catches on the pub's will have more leverage and may be able to exercise their own "Redbox" system. Online-based, of course. I'd also encourage Gamestop to counteract Target and Wal-mart by testing out Gamestop kiosks. Why drive to a crowded Wal-Mart/Target anyway when one of these kiosks is right up the street? New titles in these machines may be risky, but surely the vending of popular pre-owned titles is definitely plausible. Go Gamestop!

Wyatt Epp
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Everyone's focusing on the business aspects of this, but I'm terribly concerned about the ALA's stance. Most people don't realise the funding crisis that much of the US library system lives with, and even fewer realise that in many areas library attendance is up. The potential fallout forcing libraries to pay more money is a disaster waiting to happen.

Mark Harris
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If any legislation is introduced over this it will probably be to address this issue. Libraries are a special category and enjoy special protections etc etc blah blah. Libraries are by their very nature a limited access point for software. I've never been able to actually "check out" a piece of software from a library, install it on my home computer, and then return it. Libraries provide limited access through the use of their own computer terminals running licensed software. This type of public access can easily be protected without significantly effecting revenue for software companies. Very few people are going to be at the library all day every day using AutoCAD for business reasons.



I don't see AutoDesk or anyone else going after libraries or educational institutions. At the very least it's an absurdly terrible PR move.

some guy
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Look at the games industry as a whole.

An exptrapolation of the trend of pc/console game distribution leads me to believe that eventually we will all end up using a "Steam" like service to get ALL games...and on top of that we "Subscribe" to games on a time basis (World of warcraft would be $ per month, Tony Hawk would be $ / lifetime) all associated to a universal account.. requiring an internet connection to just be able to play our single player games (Starcraft 2)...or even use your PC/console!



All games are Downloadable-Only...and abolish discs!



Sure..piracy would be still be there (cant really stop it) but u will see fewer sales until the prces become more reasonable then they are now



Perhaps abolishing discs will reduce game costs? Possible but probably not by enough.

Dorica Prostel
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The funny thing is that right now most piracy is digital download only...

Ganjookie Gray
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Now this is a thread!



INPUT!

Dorica Prostel
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Oh, and concerning the actual case here, the guy they sued seems to not have actually agreed to their EULA, as we bought it from someone else so he can sell it on ebay and there's no mention of him using it. So now EULA's would be legal before you actually agree to them?!



And while we're on the leasing/renting thing, where else do you pay money before you even get to see the contract, let alone agree to it...

Glen Watson
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The ruling of the court implies that all software is now owned by the creators/developers/publishers no matter what format it is in. You can't sell it because you don't own it. Has nothing to do with the EULA.

Stephanie Miles
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This seems concerning, but I'm not all that surprised if video game companies go after the used game industry. However, I'm pretty sure there will be several groups to stand up against it. That being said, I don't think we having anything to worry about at the moment.

Tori Kamal
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I really believe that EULA's need to be overhauled. If we read all the EULA's we've agreed to in our lives...we'd only be playing our 2nd or 3rd game.



Although many details would have to be worked out, I think the generally impacting points of EULA's should be summed up in ten bullet points in 12 point font on the front page in plain English (or whatever language they are in). Now you know what 95% of the rubbish in the EULA really means, and clicking "I Agree" will actually mean you pretty much agree with the EULA.



Yes, there would have to be a way of determining what actually goes into the bullet points, and yes companies would try to skirt the issues, but for the most part, I think it would really be of great benefit to the consumer.



What are your thoughts?


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