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The Ministry of Economy, Trade and Industry has announced that it will set up a distribution study group to mediate the protracted dispute between game software makers and secondhand shops that sell their products.

Software developers claim secondhand shops impede new products sales and strip them of chances to recoup development costs, according to the ministry officials.

The dispute developed into a four-year legal battle, which ended in April when the Supreme Court ruled secondhand sales are legal.

It was the court’s first-ever ruling on copyrights for game software.

The developers filed the suit against the secondhand sales in 1998, claiming they constitute copyright piracy because shop operators do not pay them royalties.

They also argued their products should be treated like movies and therefore they should have the same distribution rights.

The top court ruled however that copyright ends as soon as new products are put on sale and does not cover secondhand sales.

Despite the ruling, the two sides have remained at loggerheads, which prompted METI to step into the fray. The ministry will set up the study group as early as next month to find what it calls a practical solution to the problem.

The group is expected to include a recently organized body of 2,217 video game software shops, representing more than half the industry, consumer representatives and the semipublic Computer Entertainment Software Association.

The ministry will consider allowing secondhand shops to continue selling the products but require them to pay developers “development cooperation” fees, which would not be considered copyright royalties, the officials said.

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