Can you sell video games second hand? Sort of
In 2012 the Court of Justice of the European Union (ECJ) decided the case of UsedSoft v Oracle. UsedSoft sold second had software licences, such as the one by Oracle. Oracle's software licence allowed for 25 users, so UsedSoft would sell access to the software for any left over spaces. UsedSoft argued that the licence was paid for so exhaustion applied.
Exhaustion is a legal term meaning that when you sell something to someone you no longer control it and who they can sell it on to. For example, if you buy a physical book from the publisher they cannot stop you from selling it second hand.
The question of exhaustion was much debated, in part because there were two statutes that could apply. Both the InfoSoc Directive and the Software Directive say that the right holder holds the exclusive right to distribute the work (that is, the creator or original owner) but both also say in Art.4 that that right is exhausted after the first sale. The ECJ decided that this was fulfilled when it comes to software if the acquirer has paid the fair amount for an indefinite (or effectively indefinite, like 99 years) licence.
So far it seemed all was good. We could have a second hand market for software, allowing for example for people to sell on games they had beaten. However, and this is where it gets complicated, the court decided in 2018 that this only applied to software and not to other forms of digital media such as ebooks or music. In the case of Tom Kabinet, the eponymous company would allow the members of its "book club" to download any of the ebooks it owned. They were supposed to not make copies and to delete it when they finished and pass it on, but this was not effectively policed.
The court decided that rather than falling under art 4 (distribution to the public), it fell under art 3 (communication to the public) This is significant, as the Directive is clear that while the copyright owner's distribution right is exhausted with respect of a copy of the work by the first transfer of ownership of that copy with the right-holder's consent, so that the purchaser is free to resell it, the right of communication to the public is not subject to exhaustion.
The ECJ differentiated this from UsedSoft by saying that sending a program is the same as buying the CD original for one, whereas sending an ebook is different to getting a physical book. They decided that software falls under the lex specialis of the Software Directive, but digital media does not because it is not software.
Lex Specialis refers to the rule in law (mostly used in international law) that a more specific law trumps a more general one. If there is a law to do with food production and it clashes with one to do with the cleaning of beef, the more specific latter one would apply.
This raises many problems which have yet to be resolved. Firstly, the ECJ said that receiving a physical book is different to receiving an ebook. While that may be true, what about other forms of digital media (Angelopoulos, C.L.R. 2020)? Buying an album of Nickelback in CD is effectively the same as buying the album online and downloading it, especially nowadays when music is rarely on CDs.
They say programs should be treated differently to other forms of media because they are harder to share, however anyone moderately dedicated could copy a video game on their computer (Van der Donk, E.I.P.R. 2020).
They also say that you cannot sell intellectual property other than software (such as music or books) second hand, but seem to forget that it is almost impossible to find software that does not include IP (Ross, Ent. L. R 2020). Can I sell someone my second hand game but not the music on it?
Why does non-software intellectual property deserve more protection? Why should the people making video games have to accept the loss of income from having people buy second hand instead of from them but authors shouldn't? You could say that it's because there is lex specialis, but the question here is if the law is right, not what the law is, and if you did say that you are a boring person.
Intellectual property refers to the non physical property protected by patent, trademark, copyright etc. Copyright for example protects books, music, plays or software; and patents protect inventions. They make it so people cannot for example write an exact copy of A Song Of Ice And Fire and sell it.
Furthermore, in Tom Kabinet there was the issue that the company did not really make sure that only one person could read the book at a time, and that they deleted it before passing it on. Angelopoulos believes that if the ebook sharing was done properly, which is absolutely possible, the ECJ would likely allow it. It would be much more similar to how once you sell a book second hand you cannot read it again, and the ECJ seems to like that (see Vereniging Openbare Bibliotheken C-174/15).
So really it’s all fairly unclear, but we’ll see how things change and if the ECJ ever decided to make sense. Until then, it seems like most companies are going to be quite careful with any second hand sales, but maybe some enterprising UsedSoft 2 will come along.