this thread could use some actual law quoting rather than wild claims from both sides of what Valve is legally obligated to do.
...I'm going to have to hitch my wagon to the law student instead of the guy who thinks binary files spring to life with DRM already attached two posts after it's explained that this is not the case, but fair enough; TA, can you cite some specifics?
Well, the right of first sale is codified in 17 USCS § 109(a), "Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord." That § 106(3), by the way, says "the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: ... (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;". Distilled, this is saying that although copyright owners have the exclusive right to sell or rent copies generally, someone who buys a copy has is entitled, without the approval or authority or anything whatsoever of the copyright owner, to sell that particular copy. So, if you're actually buying a copy of the game, which everything from Valve except the specific functioning they've built into Steam says that you are, then you have an absolute right to resell it or otherwise permanently divest yourself of ownership as you like.
Misfortunately, the case law is sparse on the subject. Much if it is about creating derivative works and whether or not you can sell those - for example, cutting up a book and mounting the pictures on ceramic tiles and selling those, or whether an authorized reseller on a University can alter the packaging of Photoshop to peel off the "EDUCATION VERSION--Academic ID Required" and reshrinkwrap it (answers: no, and no) - but
Christopher Phelps & Assocs. v. Galloway, 477 F.3d 128 is a Fourth Circuit case affirming that, yes, the first sale doctrine is very much active law. And again, there's the promo CD case Thad mentioned,
UMG Recordings, Inc. v. Augusto, 558 F. Supp. 2d 1055. More on that later.
SoftMan Prods. Co. v. Adobe Sys., 171 F. Supp. 2d 1075 is only a District Court case, but it's recent (2001) and pretty on-point. Basically, Adobe was claiming that it was only selling licenses to use its software, rather than copies of the software itself, and that the EULA explaining the difference was binding. The court's take on that argument was "Ownership of a copy should be determined based on the actual character, rather than the label, of the transaction by which the user obtained possession.
Merely labeling a transaction as a lease or license does not control. If a transaction involves a single payment giving the buyer an unlimited period in which it has a right to possession, the transaction is a sale. In this situation, the buyer owns the copy regardless of the label the parties use for the contract. Course of dealing and trade usage may be relevant, since they establish the expectations and intent of the parties. The pertinent issue is whether, as in a lease, the user may be required to return the copy to the vendor after the expiration of a particular period. If not, the transaction conveyed not only possession, but also transferred ownership of the copy." and "
The Court agrees that a single payment for a perpetual transfer of possession is, in reality, a sale of personal property and therefore transfers ownership of that property, the copy of the software.", at 1086.
As for the EULA, while it was specifically invalid in that case because they never installed the software anyway, they point out
Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255 and
Step-Saver Data Sys. v. Wyse Tech., 939 F.2d 91, Fifth and Third Circuit cases respectively that both find shrinkwrap licenses to be unconscionable and unenforceable, specifically pointing out how the licenses violate the UCC in their decisions. The case law is mixed by jurisdiction on the subject, but it's
Basically, as Valve constantly calls the game a sale, and accepts a payment for an indefinite transfer of possession, it's a goddamn sale. Thus, I as purchaser have an absolute right to resell that copy however I like. Now, as for specifically making copies and then selling the original, UMG Recordings v. Augusto does address that, saying "To invoke the first sale defense, a defendant must show: (1) the property was lawfully manufactured with the plaintiff's authorization; (2) the plaintiff transferred title to the property; (3) the defendant was the lawful owner of the property; and (4) the defendant disposed of, but did not reproduce, the property. An affirmative answer to each question validates the defense. Failure to qualify under any prong dooms it." So if you install Half-Life 3, sell it, and retain a usable installation of it, then Valve could go after you in court. Otherwise, no.
