US Court of Appeals Says Restrictive DRM and EULAs are OK

A couple years back, a dude named Tim Vernor tried to  sell a copy of AutoCAD on eBay. Back then, he got in trouble, because AutoCAD’s developer said the purchase of the software only had a license for it and did not own it. So Vernor sued, and he won.

But now the US Court of Appeals of the Ninth Circuit has reversed that decision. According to the judge: “We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.”

What does that mean? Well, it means that all PC software and games cannot be resold given away if the item in question has an end user licensing agreement that says the purchaser cannot resell the item in question. It does not, however, apply to console games, because they have no end user licensing agreement at this point in time.

What I find most interesting about this is that it seems to officially legalize restrictive DRM  and EULAs on PC games (<—bolded because that’s the most important part of this post), at least until this case goes higher up in the US court system, which it undoubtedly will. Many publishers have long stated that software purchasers only had a license for it, and now the government is recognizing that they can do that.

What does this mean for the future? It means it could be a pain to legally find out-of-print PC titles if Amazon Marketplace and other places take this ruling seriously and refuse to post listings for games with restrictive EULAs. For console games, I feel like publishers, by enacting initiatives like Project Ten Dollar (and if they enact online subscriptions fees as Pachter has speculated), have become more comfortable with the existence of the used games market, and they have to admit that more people will be able to buy brand new titles if they can trade in old games for them. So I doubt that publishers will start adding goofy EULAs to console games for a while now, if ever.

via Gamasutra

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2 Comments on US Court of Appeals Says Restrictive DRM and EULAs are OK


On September 15, 2010 at 7:00 am

that is interesting….but i am not overly concerned

the 9th Circuit’s rulings account for more reversals than all the state courts across the country combined and represent nearly half of the overturned judgments of the federal appellate courts.


Dan Orlow

On March 7, 2011 at 10:44 am

This was an interesting article. Does anyone know what the current state of EULAS for console games is? Are there still no restrictions on what an end user can and cannot do with a console game?