When Digital Isn’t Transferable: The Legal Status of Second-Hand Video Games

Key Takeaway

The French Court of Cassation recently ruled on a critical issue for the video game industry: video games in digital format cannot be resold on the second-hand market, unlike their physical counterparts.


Can you resell a video game you purchased online? While the second-hand market for physical games is well established, the legal framework surrounding digital game resale remains uncertain for many users and developers. In a ruling dated 23 October 2024, the French Cour de cassation offers a decisive answer: digital video games are not transferable, and users cannot resell them, even within the European Union. (1)

This article explores the legal distinction between physical and digital formats, the role of the EU Infosoc and Software directives, and how the courts interpret the exhaustion of distribution rights in the context of online platforms like Steam. Whether you’re a game developer, publisher, or digital distributor, understanding these legal boundaries is essential to ensuring compliance and protecting your business model.


1. Background of the Dispute

Valve Corporation offers, via its Steam platform, an online distribution service for video games, software, movies, and TV shows, all of which can be downloaded by users. A clause in Steam's general terms of use (GTCs) provides that users are not allowed to resell or transfer their account to another user.

The French consumer rights association UFC-Que Choisir argued that several clauses in Steam’s GTCs, including the clause prohibiting users from reselling their accounts, were unfair.

On 28 December 2015, the association filed a claim against Valve Corporation before the Paris Tribunal de grande instance, seeking to have several of Steam’s contractual clauses declared unlawful and/or abusive, and to have them removed or modified.

In its ruling dated 17 September 2019, the court held that several clauses of the GTCs were void and unenforceable, thereby validating the resale of digital video games. Valve Corporation appealed the decision. The Paris Court of Appeal partially overturned the lower court’s judgment. UFC-Que Choisir then lodged an appeal to the Cour de Cassation.


2. The Application of the Exhaustion of Distribution Rights Depends on the Legal Classification of the Work

In this case, the central question was whether video games, like software, are globally subject to the rule of exhaustion of the distribution right, thereby allowing users to resell them regardless of the format, whether physical or digital.

To answer this question, the court examined two pieces of European legislation and their interpretation by the Court of Justice of the European Union (CJEU).

On the one hand, the Infosoc Directive of 22 May 2001, defines the scope of the distribution right for protected works, including the principle of exhaustion of that right. (2)

Article L.122-3-1 of the French Intellectual Property Code, which transposes Article 4(2) of the Directive into French law, states that once the first sale of one or more copies of a work has been authorized by the author or rights holder within the European Union, the resale of those copies cannot be prohibited within the EU.

In 2019, the CJEU issued a ruling concerning digital books (or e-books). According to that decision, and in line with Article 4(2) of the Directive, the exhaustion of the distribution right applies only to tangible objects in which a protected work or its copy is embedded. It was therefore held that only printed books fall under the exhaustion principle, thereby confirming the legality of the second-hand physical book market. (3)

On the other hand, the Directive of 23 April 2009 on the legal protection of computer programs provides that the first “sale” of software within the European Union by the rights holder or with their consent exhausts the distribution right for that copy. (4)

Accordingly, under Article L.122-6, par.3° of the French Intellectual Property Code, once a first sale of a copy of software has taken place within the European Union by the author or with their consent, the distribution right is exhausted. The resale of that copy can no longer be prohibited within the EU, excluding however the possibility of granting further user licenses.

Unlike the 2001 Infosoc Directive, the 2009 Software Directive and the Intellectual Property Code do not distinguish between physical and digital copies of software when applying the exhaustion of the distribution right.

In its 2012 UsedSoft ruling, the CJEU held that under the 2009 Directive, the exhaustion principle applies to second-hand software, whether in physical or digital form. (5)

Therefore, the application of the exhaustion of distribution rights to video games, whether in tangible or digital format, depends on whether video games are considered to fall within the legal framework applicable to software.


3. A Video Game Is More Than Just Software

In its ruling of 23 October 2024, the Cour de cassation reaffirmed the complex nature of video games. This decision is in line with French and European case law on the legal classification of video games. (6)

Indeed, a video game is not limited to software. While software is an integral component of a video game, its function is to enable the game to run.

A video game is a complex work that includes not only software, but also a wide range of additional elements such as graphics, music, sound effects, storyline, and characters.

The legal framework applicable to software is an exception to the general rules governing intellectual works. Since video games incorporate multiple creative elements beyond software, they must therefore be subject to the general rule established by the 2001 Infosoc Directive. The judges thus upheld the decision of the Paris Court of Appeal. As a result, the exhaustion of distribution rights for video games applies only to the physical copy, not to the digital version of the games.

This distinction based on the format of the video game confirms the legality of the second-hand market for physical video games (disc, cartridge, etc.). However, users may not resell downloadable versions of video games.


Are you developing or distributing video games? Our law firm is available to assist you in ensuring compliance with the applicable legal framework.

(1) Cass. civ., 1ère ch., 23 octobre 2024, pourvoi n°23-13.738, UFC - Que Choisir v. Valve Corporation

(2) Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (“Infosoc directive”)

(3) CJEU, Judgment of 19 December 2019, Tom Kabinet, Case C-263/18

(4) Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs

(5) CJEU, Judgment of 3 July 2012, UsedSoft, Case C-128/11

(6) Cass. Civ., 1ère ch. 25 juin 2009, pourvoi n°07-20.387, Sesam c. Cryo; and CJEU, Case C‑355/12, 23 January 2014, Nintendo Co. Ltd and others v. PC Box Srl and 9Net Srl

Bénédicte DELEPORTE
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Deleporte Wentz Avocat
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May 2025