In 2012, the Court of Justice of the European Union (ECJ) made the following decisions in UsedSoft v. Oracle

Oracle's software license was a purchase agreement
the license conditions can be ignored
Licensee's (now deemed purchaser) download of the Software from Oracle's website exhausted Oracle's right to control further distribution of the downloaded copy
Licensee has therefore not infringed Oracle's copyright in the Software by selling its license
trading in licenses and/or used copies of the software was legal.

History of the case

Oracle supplied client-server software for companies in Germany, 85% of which was distributed to customers via download from the Oracle website after they had purchased a license for the software from Oracle. The license was unlimited and, among other things, non-transferable. UsedSoft acquired the software licenses for resale from Oracle customers who no longer wanted to use the software. UsedSoft customers then downloaded the software from Oracle's website to use it themselves, using the license keys that the original licensee had received with the license. Oracle objected to the resale of its licenses and filed a lawsuit in German courts. The case went all the way to the Federal Court of Justice, Germany's highest court, which found it necessary to refer certain questions of EU law to the ECJ for clarification.

What the Court said

According to EU law on software copyright (Software Directive 2009), the first sale of a copy of a computer program by the right holder in the EU exhausts the (copyright) distribution right to this copy in the EU. Oracle argued that there was no sale because its licensees did not own the copy on their servers, but merely had the right to use it. The CJEU stated that a sale is “an agreement by which one person transfers to another person, for consideration, his ownership rights in a tangible or intangible asset belonging to him.” The Court found that Oracle's grant of the license, in conjunction with its making the software available for download to its customers for long-term use, constituted an "initial sale [...] of a copy of the program", so that Oracle's right under the Directive to further Controlling the spread went out. The ECJ did not address the download process, which would have shown that Oracle had not delivered its copy, let alone sold it, and that the copy on the user's server was a different copy.

Consequences

This decision not only means that software developers cannot prevent the second-hand sale of their software by European licensees. It also means that European courts can ignore software license agreements and all terms contained therein (not just those prohibiting distribution) if the license term is perpetual, and probably also if it is linked to Europe's long copyright term: 70 years after the death of the last surviving programmer. This means, for example, that in the case of a perpetual or long-term license for downloading software, the usual restrictions or obligations imposed on the licensee as a condition of the grant of the license, such as number of servers, location of servers, confidentiality, security, scope of use , termination for violations, all are unenforceable.

Finally

After our team conducted legal research, spoke with legal representatives and read the above text, digitallicenses.com operates in accordance with EU Directive 2009/24/EC.