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

After a product covered by an Intellectual Property (IP) right has been sold by the IP right owner or by others with the consent of the owner, the IP right is said to be exhausted. This limitation is referred to as the “exhaustion doctrine” or “first sale doctrine”. 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 sell on the car.

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.