Legal Framework for the Trade with Used Software in the European Union
In the entire European Union as well as all EEA countries, a uniform copyright law constitutes the legal base for the sale of used software. According to the law, a software vendor’s right to control a program’s distribution is exhausted when the rightholder sells her/his software product for the first time (directive 2001/29/EG, par. 28).
In summary, the decisions made by the ECJ and the Federal Court of Justice of Germany contain the following rights regarding the resale of software licences:
- Resale of single licences: licit
- Splitting of volume licences: licit
- Resale of academic licences (so-called EDU licences): licit
- Trade of licences which were obtained online: licit
- Downloading of the installation medium by the buyers of used software: licit
- Buyers of used software are entitled to updates and patches
However, the trade with used software is bound to certain legal conditions:
- The program copy was marketed within the EU or Switzerland with the authorization of the creator.
- The program was fully bought, not merely rented.
- The first purchaser has to render his program copy unusable when s/he sells the program to third parties.
- On the basis of the chain of title, the user of a computer program has to be able to prove that s/he is the rightful owner of the program copy and entitled to its usage.
Prior to each sale, the employees of li-x validate the licences’ transferability. Only after the chain of title has been documented completely and all legal prerequisites have been met, the licences are released to the marked.
ECJ – the European Court of Justice
In the decision made on 3 July 2012 , the European Court of Justice clarified the ramifications of the exhaustion doctrine for program copies. According to the decision, the sale of software licences for programs of corporeal and non-corporeal nature is legal as long as the sale is comform with a number of parameters (ECJ, decision from 07/03/2012, file no. C-128/11, Curia, marginal no. 55). Moreover, the purchase of a software licence is accompanied by the transfer of rights for the succeeding buyer of the licence, who may download the corresponding software legally and in its latest state (ECJ, 07/03/2012, file no. C-128/11, marginal no. 85).
Because the creator’s right of controlling the program’s distribution is exhausted after selling the program, every suceeding purchaser of the program is the rightful owner of the program, according to section 5 par. 1 of the directive 2009/24 (ECJ, 07/03/2012, file no. C-128/11, marginal no. 80). Accordingly, it is legal to resell software which has been purchased on a data medium or via download. The seller merely has to meet the condition of rendering his program copy unusuable (ECJ, 07/03/2012, file no. C-128/11, marginal no. 70).
This condition is supposed to prevent the unauthorized reproduction of the program, i.e. that two program copies are in use at the same time. By making the program copy unusable prior to selling the corresponding licences, e.g. by deleting or destroying it, the exclusive right of the creator to reproduce the software is not violated, according to section 4 par. 1a of the directive 2009/24. Furthermore, the legal conditions for the resale of the program are met if the seller does not split up a licence into its single components (ECJ, 07/03/2012, C-128/11, Curia, marginal no. 86). In the case of a Microsoft Office licence, this means that Office cannot be split up into Excel, Word, and Power Point, but has to be offered as a whole package.
Federal Court of Justice of Germany
Implementation in the Member States
The Federal Court of Justice in Germany implemented the decision by the ECJ from 17 July 2013 in Germany. In Germany, it is legal to market used software licences and to transfer the corresponding rights to the purchaser. Legally, there is no difference between corporeal and non-corporeal program copies in Germany.
The succeeding buyer easily adheres to the specified directives by becoming aware of the conditions stated in the licence agreement regarding correct legal usage of the program copy. This way, a violation of copyright law of computer programs can be prevented (Federal Court of Justice in Germany, 07/17/2013, file no. I ZR 129/08, juris, marginal no. 86).
On December 11th 2014, the Federal Court of Justice resolved the last remaining uncertainties regarding the trade with used software. Already in 2012, the Higher Regional Court Frankfurt made a decision on the basis of the ECJ’s decision which liberated the used software trade extensively (file no. 11 U 68/11). In the decision, the Higher Regional Court made clear that licences obtained as part of volume contracts may be legally remarketed. Adobe’s revision of the decision has now been fully overruled by the Federal Court of Justice (file no. I ZR 8/13). With that, the Regional Court’s initial decision has been affirmed on the federal level, clarifying all legal issues regarding the trade with used software.
Higher Regional Court
In the decision made on 18 December 2012, which firstly implements the decision by the ECJ, the Higher Regional Court Frankfurt establishes the sale of used software licences as legal. According to the decision by the Higher Regional Court, even licences from volume agreements may be sold individually.
The resale of the program copy does not effect an unauthorized division of a single licence of a volume agreement. Thereby, the serial numbers of the licences installed on a computer do not matter (OLG Frankfurt on the Main, 12/18/2012, file no. 11 U 68/11).
Already in 2006, courts in Hamburg held the opinion that the exhaustion doctrine is also applicable to volume agreements. Accordingly, the sale and marketing of single Microsoft software licences which have been released within the scope of Select contracts, for instance, is legally possible without the authorisation by Microsoft and does not violate Microsoft’s copyrights (District Court Hamburg, 09/10/2007, file no. 315 O 267/07).
The sale and purchase of used software licences is legal in Switzerland, too. With the sale of the software in any form, the creator’s right to control the software’s distribution is exhausted, for, with the sale of the program, the creator transfers the rights of usage for the program copy to the buyer (Rigamonti, AJP 2010, 584).
Swiss copyright law treats the exhaustion of the right of distribution similar in a similar way as European Union law. If a creator has agreed to the sale of her/his program or sells it her/himself, this program may be used or sold again (section 12, par. 2, Copyright Law). The decision by the cantons court Zug from 4 May 2011 is based on this policy, approving the marketing of used licences for program copies of corporeal and non-corporeal nature (cantons court Zug, 05/04/2012, file no. ES 2010 822).