What you need to know
We get asked on a regular basis whether it’s ok to sell on unused licenses. The simple answer is that it is. Here are some of the legal information that governs the reselling of licensed software products.
European Court of Justice (ECJ) Judgement Case C-128/11
On 3rd July 2012, the ECJ ruled against Oracle in a landmark case that confirms the re-sale of pre-owned software licenses is legitimate and cannot be prohibited by the software vendor.
The Exhaustion
Principle
The exhaustion principle, or first sale doctrine, pertains to the limits on the control that Intellectual Property (IP) right owners have over their products once they are lawfully distributed. Once products are sold by the owner or with their consent, the exclusive right of sale becomes “exhausted”. For example, suppose you buy a Toyota car from an authorized dealer. Toyota’s intellectual property and patents are protected by law. However, they cannot interfere with your right to subsequently sell the car on to someone else.
European Software Directive 2009/24/EC
The European Union Computer Programs Directive controls the legal protection of computer programs under copyright law within the EU. It was issued under the internal market provisions of the Treaty of Rome. The most recent version is Directive 2009/24/EC. The Directive states that while the copyright owner has the right to authorise distribution of the software, this is subject to the above “first sale doctrine”. So the copyright owner’s ability to interfere with the subsequent sale of a software license is exhausted after the first sale, just as it would be with a tangible product.