We have this morning issued an e-update to clients and contacts on a recent European Court of Justice (ECJ) decision on the rights of licensees to resell licences for downloaded software.
The case involved the US software giant Oracle, and a German company, Usedsoft. Oracle tried to argue that the exhaustion principle under the European software directive did not apply to downloaded software. The exhaustion principle states that once a rights holder has sold something to another party in the EU, he can no longer how it is distributed (so, for example, Levi’s cannot stop Tesco from selling Levi’s jeans in its stores, if Tesco purchased those jeans from a distributor within the EU).
The ECJ rejected this position, holding that the principle applied regardless of whether software is sold on CD/DVD, or downloaded from the internet.
The decision is good news for organisations that use software, improving competition and creating an alternative market (outside the authorised reseller network) for organisations to buy and sell software licences.
The ruling doesn’t apply to all software licences and there are some rules that you need to be aware of before you start trading your licences. The e-update summarises the key issues to be aware of in relation to the judgment and also highlights some potential opportunities for organisations to look again at the way they value their software licences, which may help to improve their balance sheet.
On July 30, 2012