Digital goods

Richard Stallman has published a book, Free Software, Free Society, which contains essays on software freedom and related topics. In this book, he classifies the term "Digital Goods" as one of multiple "Words to Avoid (or Use with Care) Because they are Loaded or Confusing." Stallman argues that words like "Digital Goods," "Consumer," "Producer," and "Intellectual Property" perpetuate an incorrect analogy of information as material objects, which introduces bias into any discussion that uses those words. Stallman writes:

The term “digital goods,” as applied to copies of works of authorship, identifies them with physical goods—which cannot be copied, and which therefore have to be manufactured in quantity and sold. This metaphor encourages people to judge issues about software or other digital works based on their views and intuitions about physical goods. It also frames issues in terms of economics, whose shallow and limited values don't include freedom and community.

Stallman argues that the best way to avoid the bias and confusion introduced by this incorrect analogy is to avoid using the terms (e.g., "Digital Goods") that perpetuate it.

Special legal concerns regarding digital goods include copyright infringement and taxation.

Also the question of the ownership (versus licensed use or service only) of purely digital goods is not finally resolved. For instance, the software installers of the digital software distributor gog.com are technically independent to the account but are still subject to the EULA, where a "licensed, not sold" formulation is used. Therefore it is not clear if the software can be legally used after a hypothetical loss of the account; a question which was also raised before in practice for the similar service Steam. In July 2012, for instance for the European Union the European Court of Justice ruled in the case UsedSoft vs. Oracle that the sale of a software product, either through a physical support or download, constituted a transfer of ownership in EU law, thus the first sale doctrine applies; the ruling thereby breaks the "licensed, not sold" legal theory, but leaves open numerous questions. Therefore it is also permissible to resell software licenses even if the digital good has been downloaded directly from the Internet, as the first-sale doctrine applied whenever software was originally sold to a customer for an unlimited amount of time, thus prohibiting any software maker from preventing the resale of their software by any of their legitimate owners. The court requires that the previous owner must no longer be able to use the licensed software after the resale, but finds that the practical difficulties in enforcing this clause should not be an obstacle to authorizing resale, as they are also present for software which can be installed from physical supports, where the first-sale doctrine is in force. The ruling applies to the European Union, but could indirectly find its way to North America; moreover the situation could entice publishers to offer platforms for a secondary market.

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