Sale of used software licences declared legal

In a dispute between the software giant, Oracle, and second-hand software licence traders, Usedsoft, Germany’s Federal Court of Justice (Bundgesgerichtshof, BGH) has ruled that the sale of used software licences is legal (17.07.2013 Az. I ZR 129/08).

Sale of used software licences declared legal ©-Thomas-Jansa-Fotolia

Sale of used software licences declared legal ©-Thomas-Jansa-Fotolia

Oracle’s claim against Usedsoft

Oracle distributes the majority of its software over the internet by making it available for download.

Usedsoft trades in used software licences. After purchasing a licence, customers can access software directly from the trader’s website.

In 2006, Oracle commenced a court action claiming that by selling used software licences, Usedsoft had breached copyright law. Oracle argued that its original licence agreements did not permit the resale of software.

The regional court in Munich originally held in Oracle’s favour. Usedsoft appealed to the BGH, which referred the case to the European Court of Justice for a preliminary ruling on the interpretation of EU law dealing with the protection of software.

ECJ’s ruling on the sale of used software licences

The ECJ ruled that the sale of used software licences is generally legal, provided the seller does not retain a copy of the licence or divide and sell parts of multi-user licences.

The court held that a copyright holder’s rights are exhausted following the first sale of software, which included a ‘sale’ through online download.

The BGH has now set aside the Munich court’s decision and adopted an EU-compliant position with regard to the sale of used software licences.

Now the case will be remitted to the regional court for a decision on whether Usedsoft’s actions in this particular case fulfil the ECJ’s requirements. A final decision in this dispute is still awaited.

Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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