Liberalising the EU’s software market

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cookies Settings

Liberalising the EU’s software market

Case of the Year: UsedSoft v Oracle

brand.jpg

The result

Software licences can be resold

The impact

The possibility of a sophisticated market for pre-used software licences

A ruling from Europe's highest court in July should make it easier for people who have more software than they need to sell it people wanting extra. That's good news for software users but less good for program-writing companies.

The Court of Justice of the EU ruled on July 3 in a dispute between software reseller UsedSoft and technology company Oracle. It said that customers of software resellers who buy an updated user licence may download the software from the copyright owner's website.

UsedSoft clients that do not already possess the software download it from Oracle's website after acquiring a so-called used licence. Clients who already have the software can buy another licence for additional users or to receive software updates. They then download the software to the main memory of the computers of those new users.

Oracle objected to the resale practice and asked the German courts to order UsedSoft to stop. Germany's Federal Court of Justice asked the Court of Justice of the EU to interpret the directive on the legal protection of computer programs.

The ruling from Europe's top court means that an author of software cannot prevent the resale of a pre-used licence allowing the use of his programs to be downloaded from the internet. In particular, the exclusive right of distribution of a copy of a computer program covered by the licence is deemed to be exhausted on its first sale.

Even if the licence agreement bans a further transfer, the IP owner cannot oppose the resale of the copy or to copies of the program that are later updated by the software author.


Conor Ward, partner at Hogan Lovells, says the decision could have profound effects on the software industry. In the subdued economic climate, many companies have a surplus of software licences as they lay off workers: "It is likely that a market for pre-used software licences could develop fairly rapidly.

But software companies such as Oracle can take some comfort from the Court's ruling. The judges said that if Oracle's customers buy a licence that allows them to provide the software to more users than need it, the customer cannot then divide the licence and resell only part of it.

In addition, any Oracle customer that sells his licence must then make the software downloaded onto his own computer unusable.

Ultimately of course, any ruling on technology is in danger of being superseded by developments in the sector. In this case, Flemming Moos of Norton Rose in Hamburg says that technical measures may undermine the potential impact of the ruling. "In Germany the Federal Court of Justice has decided that software manufacturers may protect their software by technical means such as product activation mechanisms that link a software program to a certain user, so that the software can only be used by the respective user and resales are hindered by technical means," he says. If that ruling is upheld, software manufacturers could enforce their interests using technical measures. Another option would be for them to provide software over the internet through the so-called cloud.

Now that UsedSoft has liberalised the EU software resale market, there will be pressure for the US to free up its own resale market. Watch out for similar fights on the other side of the Atlantic.

Case details

UsedSoft v Oracle

Technology: Software

Copyright owner: Oracle

Other party involved: Usedsoft

Courts: Court of Justice of the EU following a referral from Germany's Federal Court of Justice

For UsedSoft: Meisterernst Rechtsanwälte

For Oracle: TCI Rechtsanwalte


This case was selected as one of Managing IP’s Cases of the Year for 2012.

To see the rest, click on one of the cases below.

The 10 cases of the year

A fillip for the EU pharmaceutical sector

Relief for trade mark owners in red sole saga

Australian TV streaming service held to be illegal

Smartphone war hits front page in the US

Liberalising the EU’s software market

India allows parallel imports

Victory for fair dealing in Canada

Lacoste loses its trade mark in China

Google prevails in Android attack

EU test case clarifies class headings

Ten you might have missed

Canada: Ambiguous claims can invalidate patents

Russia: Certainty on parallel imports

Italy: TV formats win copyright for the first time

First FRAND cases litigated worldwide

Monsanto loses in Brazil

Data exclusivity backed by Mexican courts

China: A shift over OEM manufacturing

Authors in the US able to reclaim joint copyrights

Germany: Knitted trainers a sign of the future

India: Financial Times loses trade mark

more from across site and SHARED ros bottom lb

More from across our site

The firm reveals how its litigation strategies informed the arguments that took Masimo’s judgment past $818 million
The firm was rebuilding its IP practice through a string of patent hires and a Texas expansion, but its dissolution has put the newly built talent back into the market
AI can exploit longstanding gaps in copyright protection at remarkable speed, but EU law still provides tools to fight back, says Simon Hembt at Bird & Bird
The firm has tapped a local patent trio to establish a foothold in the market and broaden its national presence
New Asia-Pacific IP head Jonathan Chu is eyeing opportunities arising from Chinese technology licensing, overseas enforcement and increasingly IP-heavy cross-border deals
Europe’s largest intellectual property convention and trade fair is back: IP Service World 2026 takes place in Munich from November 23–25 – the 16th edition, with 1,400-plus attendees from 55-plus nations, 100-plus speakers, and 100-plus exhibitors. Three days. Two focused areas. One IP marketplace.
Mehmet Gün and Uğur Aktekin discuss four decades of change in Türkiye’s legal market, the firm’s commitment to independence and the challenge of building an institution that can outlast its founders
Boehringer Ingelheim has instructed a team from Kirkland, while Teva is being represented by Pinsent Masons
The Delhi High Court’s latest directions offer an opportunity to move beyond remedies against bad-faith registrations and address how suspicious applications are identified in the first place, says Fatima Baig at Lexlinc
Camilla Hamrin describes how the acquisition by Acapo Onsagers will impact Bergenstråhle’s trademark practice – and reflects on changes she has seen over 30 years in IP
Gift this article