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>The End of Used Video Games?

>Are you one of the 75 million used video game purchasers in the U.S? Or, are you one of the 26 million used video game sellers looking to subsidize your next game purchase with a trade-in? If so, you might not want to delay too long before making your next trip to GameStop.

The Ninth Circuit Court of Appeals recently ruled that Timothy Vernor, an eBay seller of used commercial versions of Autodesk’s AutoCAD, is not permitted to sell used AutoCAD discs under copyright law. The court held that the “first sale” doctrine that traditionally protects used book sellers from charges of copyright infringement does not apply to used software sellers. The court based this distinction on the finding that the company that originally sold its old copy of AutoCad to Vernor was not an owner of software, but merely a licensee.

The court held that a software user is a licensee when the publisher or copyright owner (1) specifies that the user is a licensee, (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable restrictions on the use of the software.

In Vernor’s case, the court found that Autodesk had done each of (1), (2), and (3). As a result, the company that sold the used AutoCAD software to Vernor was a mere licensee, and could not transfer title to the software to Vernor, so neither that company nor Vernor were entitled to any protection under the first sale doctrine. As a result, Vernor’s eBay sale of AutoCAD was an infringement of Autodesk’s copyright.

So, why does a case about used commercial PC software matter to video games? Well, the Ninth Circuit appears to have opened the door for game publishers to adopt the software industries’ licensing model. Don’t be surprised if the terms and conditions included with your next Xbox game purchase look more like the terms and conditions included with your copy of Windows Vista. Should game publishers adopt this model, legal sales of used games may become a thing of the past.

Gavin George is an associate in the Intellectual Property Practice Group of Haynes and Boone. His practice covers all areas of intellectual property law, with an emphasis on technology transactions and data privacy in the information age. His practice includes technology agreement drafting and negotiation, intellectual property analysis and due diligence, and consulting on evolving data protection and social media issues.

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September 2010