ADventures in Law

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As consumers, we all sense the shift. Digital content has moved us into a world dominated by subscriptions and cloud‑based access, where we own fewer things outright. Whether it’s movies, books, music, video games or other types of digital media, there is a good chance you don’t own what you have. Not in a legal sense, anyway.

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And this trend isn’t limited to purely digital goods. Increasingly, physical products depend on software and remote services to function – all those “smart” thermostats, TVs, appliances, door locks, security cameras and even vehicles we have come to love. These software‑enabled devices blur the line between product ownership and licensed access, raising real questions about what it means to “own” something in today’s marketplace and how that aligns with long-standing consumer expectations.

Consumers, for their part, have developed intuitive assumptions about the things they purchase. They expect the e-book they bought will remain accessible indefinitely – that it won’t vanish from their digital bookshelf overnight. They may assume they can loan or resell that new movie or game they purchased. And if a device stops working, they expect to be able to repair it, or at least hire someone else who can. Today, however, many of those assumptions may no longer hold true. In many cases, a consumer hasn’t purchased ownership of content or a product at all but rather has paid for a revocable license to access and use it under defined restrictions.

This disconnect between consumer expectations and legal reality has prompted new legislation, such as California’s Digital Property Rights Transparency Law (Cal. Bus. &amp; Prof. Code § 17500.6), enacted last year. The statute requires companies to disclose when consumers are obtaining a revocable license rather than ownership. Specifically, companies cannot use terms such as “buy,” “purchase” or similar words suggesting unrestricted ownership of digital goods, unless:

the seller cannot revoke access to the digital good;

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the seller provides clear and conspicuous disclosures explaining that the purchaser is receiving a revocable license (along with a link to the license terms); or

the seller obtains an affirmative acknowledgment confirming that the purchaser understands the transaction grants only a restricted license and that access may be revoked.

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The law exempts free services and subscription‑based offerings that clearly advertise access only for the duration of the subscription. (For a deeper dive into how this law applies to in‑game assets, go to <a href="https://www.bakerlaw.com/insights/california-ab-2426-the-ephemeral-nature-of-in-game-assets/" target="_blank" rel="noreferrer noopener">https://www.bakerlaw.com/insights/california-ab-2426-the-ephemeral-nature-of-in-game-assets/</a>.)

The disconnect has also spilled into the courts in the form of class actions alleging that digital platforms and content distributors mislead consumers by labeling licenses as “purchases” and using other language indicative of unrestricted ownership while burying key disclosures about the limited nature of access. For example, several lawsuits have recently been filed against online video game retailers and movie distributors alleging violations of California’s Digital Property Rights Transparency Law and claims related to false advertising.

As these lawsuits and California’s digital ownership statute make clear, scrutiny of how companies market digital goods and software‑enabled products is only intensifying. Plaintiffs’ lawyers and regulators are examining the full user experience (UX) and the words, screens and flows that shape consumer understanding. For platforms offering digital content, apps, games or connected devices, now is the time to reassess how “purchase” options are presented and what consumers are being told (or not told) about what they actually receive. A proactive review can reduce litigation and enforcement risk before your business finds itself in the crosshairs.

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Train cross‑functional teams (marketing, product, legal, UX) so they understand the risks and know how labeling and user flows can create exposure.

Review marketing materials and purchase flows, paying close attention to words such as “buy,” “purchase,” “sale” or any terminology that connotes ownership.

Ensure “buy” or “purchase” is used appropriately and accompanied by legally compliant disclosures.

Verify that UX language matches legal terms and that your UX does not convey an ownership interest where none exists.

Clearly distinguish ownership from a restricted license and make disclosures prominent and early, preferably before payment, not buried in fine print on confirmation screens.

Where feasible, capture affirmative acknowledgment that the consumer understands they are receiving a license rather than ownership, along with the license’s limitations.

Consider building a remedy path (such as credits or refunds) when content rights lapse or access is revoked, both to mitigate risk and to maintain consumer trust.

Designing the ‘Buy’ Button: Clearer Disclosures, Fewer Lawsuits