Legal Software Warranty

What does the law say about reselling used licenses?

 

One of the most important judgments concerning the sale of used licenses was rendered by the Court of Justice of the European Union (CJEU) in 2012.

 

The CJEU judgment in Case C-128/11 UsedSoft GmbH v Oracle International Corp. says that “An author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet. The exclusive right of distribution of a copy of a computer program covered by such a licence is exhausted on its first sale.

 

This means that the sale of ‘used’ and redundant software licences is legal. This judgement created a safe, legal framework for the whole European Union ensuring a fair and healthy competition on the European market.

 

The judgment also states that:

  • The unlimited software licences can be traded freely. If you purchase an independent software licence, you can sell it under the same conditions.
  • The distribution rights of the producer are exhausted upon the first sale of the software. Customers who bought a computer program on a free market are entitled to use the purchased software.
  • Even if the resale of software is specifically forbidden by the license agreement, the right holder can no longer oppose the resale of that copy. The license agreement is subject to the European Law and points which are in conflict with the European Law are void (this applies mainly to the ‘OEM software’).
  • There is no difference between the manners of distribution. Software can be distributed by CD/DVD (physical licenses) or online (digital licenses). The right holder cannot demand an appropriate remuneration for further resale of the software licence because the appropriate remuneration was obtained during the first sale.

 

Legal history of used software

 

Have a look at what were the major court decisions and EU directives that influenced the situation on the market with used licenses in the infographic below.

 

 
2000
 
“The judgment of the German Federal Court of Justice allowed the sale of OEM versions and DSP versions without the associated hardware.” – Decision of the Federal Court of Justice of 6 July 2000, file no. I ZR 244/97
 
 

 
2001
 
“The first sale in the Community of the original of a work or copies thereof by the right-holder or with his consent exhausts the right to control resale of that object in the Community.” – Extract from EU directive 2001/29/EC
 
 

 
2006
 
The Regional Court of Hamburg has confirmed that trade in used Microsoft software is legitimate. This also applies to the re-sale of individual licenses from volume license agreements.
 
 

 
2009
 
"...the second acquirer of the licence, as well as any subsequent acquirer of it, will be able to rely on the exhaustion of the distribution right and hence be regarded as lawful acquirers of a copy of a computer program and benefit from the right of reproduction provided for in that provision." Directive 2009/24/EC of the European Parliament and of the Council
 
 

 
2011
 
The Swiss Cantonal Court in Zug decides that "Adobe can't prohibit the resale of the program copy in terms of copyright after its initial sale".
This precedent-setting decision is considered a big victory for the free international software trade.
 
 

         
2012
 
“An author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet.” – Court of Justice decision, Case C-128/11 UsedSoft GmbH v Oracle International Corp.
 
 

 
2016
“The initial acquirer of a copy of a computer program, accompanied by an unlimited user licence, may resell that copy and his licence to a new acquirer.” – Court of Justice decision, Case C-166/15 Aleksandrs Ranks and Jurijs Vasiļevičs
 
 

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