PC code stripping – is it legal or not?

One of the burning questions over the sale of grey market PC game codes is its legality. And the issue isn’t as clear as you might hope.

Whilst re-selling game keys may well amount to a breach of contract – as such re-selling is almost invariably prohibited by the terms of the corresponding game’s End User Licence Agreement – whether such re-selling is illegal has been unclear for some time," says Harbottle and Lewis associate Nicolas Murfett.

"This lack of certainty has undoubtedly contributed to the growth of the grey market for game keys over the last few years.

"However, a recent case in Germany has provided some much needed clarity by finding that re-selling game keys without the express authorisation of the relevant game’s copyright owner violates the exclusive rights of such copyright owner to authorise or prohibit the distribution of its game (of which the key forms an essential part).

"Although these exclusive rights can belostunder EU lawif the copyright owner authorises a sale of its game in the EU,such rights are not lostwhere individual components ofthat game(in this case thegamekey) are separated and then resold without the copyright owner’s authorisation.

"Publishers wishing to protect their pricing and distribution structures should continue to ensure that they expressly prohibit key re-selling in their game EULAs. This, together with other proportionate technical measures, could help diminish the grey market for game keys"

Nicholas Murfett, Harbottle and Lewis

"Whilst the English courts are not bound by the decisions of the German courts, it seems very likely that an English court tasked with deciding whether game key re-selling is illegal under English law would follow the German court’s decision in finding that such re-selling amounts to a breach of copyright at least until a decision to the contrary is delivered by the Court of Justice of the European Union.

"The German case certainly raises some very interesting legal questions that remain to be answered, and it is not inconceivable that if the decision were appealed to the level of the CJEU, the outcome might be very different.

"For now though, publishers wishing to protect their pricing and distribution structures should continue to ensure that they expressly prohibit key re-selling in their game EULAs. This, together with other proportionate technical measures, could help diminish the grey market for game keys.”

Alex Tutty, associate at Sheridans, believes legally these retailers are fine:Typically if you legitimately buy something like a physical product, you are entitled to re-sell it," he says.

Buyingboxed gamesfrom one EU country where it is cheaper and selling it in anotheris legal, younormallycan’t prevent that because that is against the free movement of goods. The EU is one big territory and we are all friendsso goods and workers should be able to move freely.”

Alex Tutty, Sheridans

In certain circumstances this is not the case such as if you purchase a licence to play a game,which might be a restrictive licence preventing resale. If you download a Steam game, for instance, you are buying a licence to play it and you are not allowed to sell it on under Steam’s licence restrictions."

Buying boxed games from one EU country where it is cheaper and selling it in another is legal, you normally can’t prevent that because that is against the free movement of goods. The EU is one big territory and we are all friends so goods and workers should be able to move freely.”

If you are buying a boxed game from outside the EU such as Russia and selling that game in the EU, it’s a bit more complicated. So for that purpose you need to see if that game is legitimately available in the EU. Because if it is available in the EU, then you are entitled to sell it, even if it is from outside of the EU.”