Online video games cannot be resold second-hand

The Court of Cassation ruled on the issue of exhaustion of the right of distribution of a video game provided online.

The right of exhaustion is a legal concept that limits the copyright owner’s control over the distribution of a work after its first authorized sale. According to Article L. 122-3-1 of the Intellectual Property Code, this right applies when the first sale of a material copy of a work has been authorized by the author or his successors in title in a Member State of the European Community or another State party to the Agreement on the European Economic Area. Once this first sale has been made, the sale of these copies can no longer be prohibited in these states. 

This principle is transposed into national law from Article 4 (2) of Directive 2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, which states that the right of distribution in the Community relating to the original or copies of a work is exhausted only in the event of the first sale or other transfer of ownership in the Community of this object by the rightholder or with his consent. However, it is important to note that this right of exhaustion only applies to tangible objects and not to services, in particular online services (recital 29 of the Directive). 

With regard to software, Directive 2009/24/EC of 23 April 2009, which deals with the legal protection of computer programs, provides that the exhaustion of the right of distribution applies to both tangible and intangible copies of a computer program. This includes copies downloaded via the internet at their first sale.  

The decision of the Court of Cassation of 23 October 2024, No. 23-13.738, is part of this complex legal context. This decision rejects the appeal filed by the association UFC – Que Choisir against the company Valve Corporation, concerning the resale of digital video games via the steam platform, whose terms and conditions prohibited the resale and transfer of Steam accounts or subscriptions acquired on the platform. 

The Court of Cassation upheld the judgment of the Paris Court of Appeal, which had ruled that video games are not simple computer programs, but complex works comprising graphic, sound, and narrative elements, protected by Directive 2001/29/EC on copyright, and not by Directive 2009/24/EC on computer programs.  

The Court of Cassation thus states: “the Court of Appeal has exactly stated that a video game is not a computer program in its own right but a complex work in that it includes software components as well as many other elements such as graphics, music, sound elements, a scenario and characters and that, unlike a computer program intended to be used until its obsolescence, the video game quickly finds itself on the market once the game is over and can, unlike software, still be used by new players several years after its creation.” 

The decision is in line with the case law of the Court of Justice of the European Union (CJEU), in particular the “Nintendo” judgment (CJEU, 23 Jan. 2014, Nintendo, C-355/12) which recognizes the complexity of video games as works integrating various elements with their own creative value although encoded in computer language, participating in the originality of the work and protected together with the entire work. In addition, it follows the “Tom Kabinet” judgment of the CJEU (CJEU 19 Dec. 2019, Tom Kabinet, C-263/18), which limits the exhaustion of the right of distribution to tangible objects. 

This decision clarifies the French position on the non-applicability of the rule of exhaustion of the right of distribution of software to digital video games, thus strengthening copyright protection in the digital context. It also stresses the importance of distinguishing between complex works and simple computer programs, which could influence future business concerning the digital distribution of protected content.