North America and Europe are rife with used bookstores that provide a significant amount of people deeply discounted books. In the digital realm, publishers have been against the very notion of used ebooks. They have taken extreme measures in encrypting their digital products so only the original purchaser can ever use them. If you try to give your ebook to a friend, they won’t be able to read it because it normally asks for the credit card used on the original purchase. The notion of used ebooks may be a reality soon through a new ruling by the Court of Justice of the European Union. They announced today that a license agreement for a digital product can be resold between customers.
The court case in Europe stemmed from a dispute between Oracle and UsedSoft. The essence of the deal was that Usedsoft acquired a ton of Oracle licenses for various products and resold them to customers. Oracle was obviously not pleased with Usedsoft doing this and petitioned the court to side in its favor. The German courts served their ruling today and it could open up the floodgates for the ability to sell used ebooks.
The High Court press release stated that “Where the copyright holder makes available to his customer a copy – tangible or intangible – and at the same time concludes, in return form payment of a fee, a license agreement granting the customer the right to use that copy for an unlimited period, that right-holder sells the copy to the customer and thus exhausts his exclusive distribution right. Such a transaction involves a transfer of the right of ownership of the copy. Therefore, even if the license agreement prohibits a further transfer, the right-holder can no longer oppose the resale of that copy. He can therefore download onto his computer the copy sold to him by the first acquirer. Such a download must be regarded as a reproduction of digital product that is necessary to enable the new acquirer to use the program in accordance with its intended purpose.”
This case has broadening repercussions to the used video game and ebook industry. It shows that digital content can be sold to a 3rd party as long as the seller does not use the product anymore, which would violate the original licensing agreement. It really sets a precedent that the transfer of ownership can be directly applied to digital products.