The post-sale life of digital goods


Golden Member
Jan 9, 2008
..the "first sale" doctrine that buyers have broad rights to do what they want (subject to other laws, of course) with something they have purchased. Without that trial, you might not have the right to resell that old video game you have lying around, and you might have trouble hawking your used CDs. Publishers don't tend to like secondary markets, as they usually get no cut of the revenues.

But all such issues involving licenses and secondary markets can simply be bypassed by a more recent technique: using DRM or various activation schemes to make the sale of used goods difficult. Using this approach, software companies can admit to "selling" software and can admit that the first sale doctrine applies, yet they can functionally limit the doctrine's utility. Code trumps law.

First sale has nothing to say about these kinds of limits; so long as the item in question can be resold by the purchaser, the law does nothing to require that the resold copy be usable. Spore's user account system and DRM proved controversial for just this reason.

Most companies are reticent to lock down the software too much for fear of a backlash. Many follow the model of Microsoft, which uses activation but is generally quite lenient to anyone that makes the effort to call in and obtain a new activation code after a certain number of hardware changes. But, legally, there's nothing that requires this.

It's one of the side "benefits" of using DRM. While DRM has never done much to keep movies, music, or games out of the hands of warez sites and torrent search engines, it can work surprisingly well to limit the secondary market for products. Once a product has been ripped, camcorded, or cracked, pirates can swap it easily and millions of times. With users who try to stay legal and sell only used copies of games, music, and movies that they have purchased, the DRM scheme needs to be bypassed in each case, by each user. It also makes criminals of those who do break the DRM in order to sell their files.

Not that licensing, DRM, and central control are always bad. Anyone who has used Steam or Xbox Live or Netflix's on-demand movie service knows that not fully owning or controlling products doesn't have to be a terrible thing. When licenses and content exist in the cloud, users can often access their files from anywhere, using any machine, and have full access to their accounts.

But try selling that game you bought on Steam.

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