The European Court of Justice (ECJ), the uppermost legal body of the European Union, provided for final clarity with its judgement and declared trade in used computer programs to be fundamentally legitimate.

On 3 July 2012, the European Court of Justice judged (judgment in Case C-128/11) that

“An author of software cannot oppose the resale of his ‘used’ licences allowing the use of his programs downloaded from the internet.”
“(…) even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.”

This judgment liberalises the market for used licences – also for licences downloaded from the Internet, such as Microsoft volume licences, Adobe licences or other. This was previously only possible for box products, which means software in physical form, such as in the form of a disc, because for these products the “principle of exhaustion” applies. According to this principle, the manufacturer’s right to prohibit a resale expires after the sale.

The ECJ also ruled that the trade in used software is also permitted with software transferred online.

The ECJ’s ruling should also be applied to volume licences and their splitting-up. The Higher Regional Court of Frankfurt confirmed this in Case-C-128/11 Usedsoft

In justifying their verdict, the 13 judges of the Grand Chamber clearly stated that the principle of exhaustion applies to each initial sale of software. The Court even decreed that second purchasers may even download the software from the manufacturer again with licences transferred online. “Furthermore, the exhaustion of the right of distribution extends to the version of the copy of the program upgraded and updated by the owner of the copyright,” according to the European Court of Justice. The Court therefore went further than the concluding opinion of the ECJ Advocate General on 24 April 2012.

The ECJ’s judgement provides for legal certainty throughout the entire European Union. It is therefore to be expected that the trade in used software will now also grow strongly in other EU countries outside of Germany, its “country of origin”. usedSoft is already operating in Austria, Poland, the Czech Republic, Italy, France, Spain, the Benelux countries and in Scandinavia, among others.

Legal situation of resell Volume licensing

In a later judgement by the Higher Regional Court in Frankfurt am Main in proceedings between Adobe and usedSoft, the further consequences of the ECJ judgement were impressively confirmed: the Higher Regional Court in Frankfurt namely decreed that the ECJ’s judgement should also be applied to volume licensing agreements and the splitting-up of these licences. Germany’s Federal Supreme Court fully dismissed an appeal from Adobe on 11 December 2014 (case I ZR 8/13). That represented the final confirmation for the ruling from the Frankfurt Higher Regional Court.

More information: C-128 /11 Usedsoft