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Darth Spud, did you ever see my Dr Suess version of SFS?
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Luned: The wording is what the OP is pointing out as illogical. What SEGA presumably means is "we do not recognize {your right to} transfer {ownership} of the Game Software". The words in brackets are important additions to make the sentence have the correct meaning.

The phrasing they used is akin to "My cousin went and got a professional makeover, and she looks so different, I didn't even recognize her at the family reunion!" It sounds as if even if you did transfer the Game Software, they could not see that you had done so.
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GR00T: Not so, actually. You're looking at only one of the defnitions of 'recognize' (the one most of us think of when hearing or reading the word):

identify (someone or something) from having encountered them before; know again.

They're using it in a different context (note the bolded part):

acknowledge the existence, validity, or legality of.

The sentence is perfectly fine as written, and just clarifies the heading under which it falls (No sale or assignment). So, in essence, they're saying they do not acknowledge the transfer of the software (either through sale or giveaway) as valid or legal.
I grant you that it can be read that way, but it's not the only possible reading, especially for a non-native speaker. Legalese is usually intended to fill all loopholes in meaning so it's not possible to read the sentence in more than one way. Therefore, I'd call this a failure on the lawyers' part. (I have to proofread reports to "idiotproof" them. In my experience, what can be misconstrued, often will be misconstrued, sometimes unintentionally, sometimes with malicious intent. A couple of weeks ago I had to make a really nasty reply to a government reviewer over his complaints about the usage of the word "strata" in one of our reports, using both the Merriam-Webster Dictionary and the definitions at a government website to refute him.)
Post edited October 22, 2015 by Luned
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Luned: I grant you that it can be read that way, but it's not the only possible reading, especially for a non-native speaker. Legalese is usually intended to fill all loopholes in meaning so it's not possible to read the sentence in more than one way. Therefore, I'd call this a failure on the lawyers' part. (I have to proofread reports to "idiotproof" them. In my experience, what can be misconstrued, often will be misconstrued, sometimes unintentionally, sometimes with malicious intent. A couple of weeks ago I had to make a really nasty reply to a government reviewer over his complaints about the usage of the word "strata" in one of our reports, using both the Merriam-Webster Dictionary and the definitions at a government website to refute him.)
I'd agree with you if the sentence in question wasn't directly under the heading/category 'NO SALE OR ASSIGNMENT '. As such, interpreting it as not knowing or recognizing the software is nonsensical, since everything listed under any particular heading is intended as relating to and clarifying that heading.
They're trying to deny the right or even possible right of transfer.