Paris Court's Decision On Digital Exhaustion And Video Games

Paris Court's Decision On Digital Exhaustion And Video Games

Although exhaustion of IPR on tangible goods can clearly be inferred from the relevant provisions of the European Directives 2001/29/CE and directive 2009/24/CE, exhaustion of rights derived from intangible goods such as a software/videogame has always been at the center of the discussion in Europe.

Paris Court has recently issued a decision regarding this controversial issue and followed the conditions outlined in the well-known UsedSoft case of CJEU. The case was related to the validity of the terms and conditions of a license provided by VALVE Corporation specialized in distribution of video games. The subject terms and conditions precluded users from resale of the video games.

While the terms and conditions were aiming at providing a better protection to IPR holders, Paris Court found it more important to maintain the free movement of goods/services regardless of the nature of the subject. Based on this conclusion, the ruling indicated that there should be no distinction between circulation of a tangible goods and an intangible property in case the conditions set forth in CJEU's previous UsedSoft decision are met.

According to the decision, resale of video games, software or any intangible products should be allowed  as long as the licensing relationship between the user and provider is perpetual, the license has been paid fully, the first user is not able to use the copies after the takeover and first sale of the product has been conducted in EEA.

As this case reiterates the ruling of the CJEU, it may be concluded that there is a tendency to allow resale of intangible goods due to the exhaustion of copyright and it would be expectable to see similar decisions in other EU Member States

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