Business Software

European Court to Rule on Legality of Used Software Trading

The European Court of Justice (ECJ) has been asked to decide whether the trading of "used" software licenses is legal.

The German Federal Court of Justice referred the question to the ECJ following a legal battle between Oracle and usedSoft, a company that buys and sells used software. Oracle launched the case after usedSoft offered "pre-used" Oracle software licenses online in October 2005.

Oracle says that its license agreements with its customers contain provisions to the effect that the software can't be used by a third party.

However usedSoft argues that it acquired a notarized statement from the original licensee that he was the lawful holder of the licenses, that he no longer used the licensed programs and that he had paid the purchase price in full. usedSoft's customers who acquired a "used" license downloaded the software from Oracle's website.

The German Regional Court originally ruled in favor of Oracle, but following usedSoft's appeal, the federal court decided to refer the matter to the ECJ. The European court will consider how directive 2009/24/EC on the legal protection of computer programs should be applied in this case. This will also set a precedent for trading of used software licenses throughout the European Union.

The ruling should also clarify the legal status of individuals who have purchased used licenses.

usedSoft welcomed the decision to involve the European Court of Justice.

"Ultimately, the resale of downloaded software is based on European regulations which must also be clarified for all of Europe," said usedSoft managing director Peter Schneider. "We regard this to be an important stepping stone victory on the way to truly free trade on the software market."

The ECJ may take up to two years to rule on the case. Oracle said it would not comment on the case.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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