Q&As

An EU market in second hand software has developed since the Court of Justice ruling in UsedSoft v Oracle, Case C-128/11. Once the Brexit implementation period ends, what changes will there be in how that ruling applies in the UK in respect of second hand software?

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Produced in partnership with Chris Thomas and Chris Hoole of Appleyard Lees
Published on LexisPSL on 03/06/2020

The following TMT Q&A Produced in partnership with Chris Thomas and Chris Hoole of Appleyard Lees provides comprehensive and up to date legal information covering:

  • An EU market in second hand software has developed since the Court of Justice ruling in UsedSoft v Oracle, Case C-128/11. Once the Brexit implementation period ends, what changes will there be in how that ruling applies in the UK in respect of second hand software?
  • UsedSoft
  • Case law on exhaustion after UsedSoft
  • Brexit
  • Second hand software sold during the implementation period
  • Exhaustion after the implementation period
  • Second hand software sold in the EEA after the implementation period
  • Second hand software sold in the UK after the implementation period
  • Future of UsedSoft

UsedSoft

In 2012, the decision of the Court of Justice in UsedSoft v Oracle opened the door to a market for second-hand software in the EEA. Specifically, it concerned the ‘sale’ of perpetual licences for a one-off fee and the interpretation of Article 4(2) of Directive 2009/24/EC (the Software Directive) as it related to onward sales.

Article 4(2) of the Software Directive states:

‘The first sale in the Community of a copy of a program by the rightholder or with his consent shall exhaust the distribution right within the Community of that copy, with the exception of the right to control further rental of the program or a copy thereof.’

In UsedSoft, the Court of Justice found that the rights in a computer program, subject to a perpetual licence and a lump sum payment, were exhausted on the ‘sale’ of a copy whether in physical or online form, provided the first purchaser relinquishes their copy (second hand software). The one-off licence can then be sold freely on the second-hand market provided certain additional conditions are met.

On the facts of the UsedSoft case, Oracle customers downloaded software directly from its website, together with user licences, in exchange for a licence fee. Under a maintenance agreement, updated versions of the software (patches) could also be downloaded from the website. UsedSoft marketed used software licences acquired from customers of Oracle. Customers

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