Is keyselling a copyright infringement?

As a general rule, purchased goods may be resold at any time on the basis of the exhaustion principle. The Regional Court (LG) Berlin recently had to decide whether this also applies to the resale of software keys, that is, whether the isolated sale of product keys for computer games, the so-called "keyselling", constitutes a copyright infringement.

The operator of an online shop for computer games distributed product keys for games on its website, which it had acquired from contractual partners in England and Poland.

The publisher of a computer game from Germany opposed this business model and sent a cease-and-desist letter to the shop operator. It demanded that the game retailer cease and desist from reselling serial numbers of the computer game.

By means of a declaratory action, the shop operator then sought a declaration from the Regional Court (LG) Berlin that keyselling is permissible, since games, like other goods, are subject to the exhaustion principle following their sale by the manufacturer and are therefore freely tradable.

Court Decision

With Judgment of 11.03.2014 – Az. 16 O 73/13 – the Regional Court (LG) Berlin decided that keyselling constitutes a violation of the copyright holder's right of reproduction and dismissed the declaratory action of the shop operator.

The distribution of product keys for software products violates the copyright holder's right of reproduction, as it enables third parties to download a computer game from the internet and thereby reproduce it themselves.

The online shop operator's exhaustion defence also does not apply. Exhaustion can only occur with products that have entered into European economic circulation with the consent of the rights holder. In this case, however, the games are distributed in physical form together with the product key. The exhaustion principle would only apply to the resale of the games in this form. For software products, this also follows from the European Info-Soc Directive, which restricts the exhaustion of computer games as hybrid works to physical copies.

Conclusion

The trade in product keys for software products constitutes a copyright infringement and may result in costly cease-and-desist letters from rights holders.