Software ruling

“Second-hand” software can be lawfully sold in most cases, the European Court of Justice has ruled.

Currently, business software, films, music, ebooks and other downloaded content is not sold but merely licensed to an individual user, which means the user cannot sell it on to anyone else.

Last week, however, the court held that the licensor’s rights were “exhausted” after the first sale. The case, UsedSoft v Oracle International: C-128/11, arose from a dispute between software manufacturer Oracle and software merchant UsedSoft, which bought and sold on “used” software licenses.

In order for the sale to be lawful, the vendor must delete their copy of the programme from their computer.

Robin Fry, partner at DAC Beachcroft, says: “The inevitable logic of the ECJ’s decision is that the licensing structure and controls set up by record companies, film studios, publishers and games publishers, as well as indeed software sellers, will be substantially undermined by, for the first time, a new legal market in ‘used’ content.

“Unlike second-hand books or CD-ROMs, where one is never quite sure of their condition, a downloaded digital file should not be corrupted and so consumers will readily shift to acquiring much of their entertainment content from friends and from eBay. There will also be a major opportunity for a new marketplace for this pre-owned content.”