Legal basis for trade in used software within the EU
There is uniform copyright law throughout the European Union, EEA states and Switzerland, which states that: the copyright of the software manufacturer runs out as soon as the author has first sold its software (Directive 2001/29/EU, paragraph 28),
On the basis of this, the legitimacy regarding the marketing of used licenses relating to computer programs downloaded from the Internet was confirmed, in fact, "the principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a tangible medium – CD ROM or DVD – but also where it distributes them via download from its website (Directive 2009/24/EC – art.4, paragraph 2 and art. 5, paragraph 1 in case C-128/11 ).
In summary, the judgments of the Court of Justice of the European Union (CJEU) and the Federal Court of Justice, currently contain the following rights regarding the resale of software licenses:
Resale of individual licenses: ALLOWED.
Distribution of volume licenses: ALLOWED.
Resale of academic licenses (so-called EDU licenses): ALLOWED.
Trading licenses transferred online: ALLOWED.
Download of installation media by second purchaser: ALLOWED.
Second Purchaser's Right to Updates/Patches etc.: I AGREE.
Galior SRLS in pers. of the Amn. pt, for the purposes of the legitimacy of the trade in used software, certifies compliance with all the conditions necessary for resale, such as:
The copy of the program was released in the EU or Switzerland with the consent of the manufacturer/author.
This is an outright sale, not a rental.
The original purchaser rendered the remaining copies unusable if a copy of the program was sold to a third party (as per the declaration made and signed).
The aforementioned declarations are made pursuant to art. 47, Presidential Decree n. 445/2000
SOURCES OF LAW
The World Intellectual Property Organization (WIPO) adopted the WIPO Copyright Treaty (hereinafter the 'Copyright Treaty') in Geneva on 20 December 1996. This Treaty was approved on behalf of the Community by Council Decision 2000/278/EC of 16 March 2000 (OJ 2000 L 89, p. 6).
Article 4 of the Copyright Treaty, entitled "Computer programs", reads as follows:
'Computer programs are protected as literary works within the meaning of Article 2 of the Berne Convention. This protection applies to any mode or form of expression of a computer program".
Article 6 of the Copyright Treaty, entitled "Distribution right", provides:
«1. Authors of artistic and literary works have the exclusive right to authorize the original and copies of their works to be made available to the public through sale or any other means of transfer of ownership.
Nothing in this Treaty affects the faculty of the Contracting Parties to determine the possible conditions under which the exhaustion of the right recognized by paragraph 1) takes place after the first sale or other transaction of transfer of ownership of the original or of a copy of the work, made with the author's permission".
Article 8 of the Copyright Treaty provides as follows:
«(…) the authors of literary and artistic works have the exclusive right to authorize any communication to the public, by wire or over the air, of their works, as well as the making available to the public of their works, so that anyone can freely access them from a place or at a time of his choice".
From the agreed statements regarding Articles 6 and 7 of the Copyright Treaty it follows: "For "copies" and "original works or copies thereof", as being the subject of the distribution right and the rental right under of the articles in question, are exclusively copies fixed on a material support, which can be placed on the market as tangible objects".
European Union law
The twenty-eighth and twenty-ninth chapters of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10), they read as follows:
(28) Copyright protection under this Directive includes the exclusive right to control the distribution of the work incorporated in a tangible medium. The first sale in the Community of the original of a work or copies thereof by the rightholder or with his consent exhausts the right to control the resale of this object in the Community. This right should not be exhausted if the original or copies thereof are sold by the rightholder or with his consent outside the Community. Rental rights and lending rights for authors have been established in Directive 92/100/EEC. The distribution right under this Directive is without prejudice to the provisions relating to rental rights and lending rights under Chapter I of this Directive.
(29) The question of the exhaustion of the right does not arise in the case of services, especially "on-line" services. This also applies to a tangible copy of a protected work or other material made by a user of this service with the consent of the right holder. Therefore the same applies to the rental and lending of the original and copies of protected works or other subject matter which are benefits in kind. Unlike the case of CD-ROMs or CD-Is, in which the intellectual property is incorporated in a material support, i.e. in an asset, every "on-line" service is in fact an act which will have to be subjected to authorization if the copyright or related rights so provide'.
Pursuant to Article 1(2)(a) of Directive 2001/29, it 'does not modify or affect the current Community provisions on the (…) legal protection of computer programs'.
The art. 3 of directive 2001/29 provides the following:
«1. Member States shall grant authors the exclusive right to authorize or prohibit any communication to the public, by wire or wireless, of their works, including making their works available to the public in such a way that everyone can have access to them from the place and in the moment chosen individually.
The rights referred to in paragraphs 1 and 2 do not end with any act of communication to the public or with their making available to the public, as indicated in this article".
The art. 4 of that directive, entitled "Distribution right", states the following:
«1. Member States grant authors the exclusive right to authorize or prohibit any form of distribution to the public of the original of their works or copies thereof, by sale or otherwise.
The right to distribute the original or copies of the work is not exhausted in the Community, except where the first sale or other transfer of ownership in the Community of that object is made by the right holder or with his consent ».
Directive 2009/24, as stated in its first recital, provides for the codification of Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (OJ 1991 L 122, p. 42).
It emerges from the seventh recital of Directive 2009/24 that, '[for the purposes of [that] directive, the term "computer program" means programs in any form, including those incorporated in hardware'.
According to the thirteenth recital of the aforementioned directive, 'the contract cannot prohibit the acts of loading and unwinding necessary for the use of a legitimately acquired copy of a program and the act of correcting its errors'.
Article 1(1) of Directive 2009/24 states that 'Member States shall protect computer programs, by copyright, as literary works within the meaning of the Berne Convention for the protection of literary and artistic works'.
According to Article 1(2) of that directive, '[t]he protection under this Directive applies to any form of expression of a computer program'.
Article 4 of the aforementioned directive, entitled "Reserved activities", provides as follows:
«1. Without prejudice to the provisions of articles 5 and 6, the exclusive rights of the holder, pursuant to article 2, include the right to carry out or authorize:
a) the permanent or temporary, total or partial reproduction of a computer program by any means, in any form whatsoever. Insofar as operations such as loading, displaying, executing, transmitting or storing the computer program require reproduction, these operations must be subject to authorization by the right holder;
b) the translation, adaptation, adaptation and any other modification of a computer program and the reproduction of the resulting program, without prejudice to the rights of the person who modifies the program;
c) any form of distribution to the public, including leasing, of the original computer program and copies of the same.
The first sale of a copy of a program in the Community by or with the right holder's consent exhausts the right to distribute the copy within the Community, with the exception of the right to control the further leasing of the program or a copy of the same".
The following Article 5, entitled "Derogations relating to reserved activities" provides, in paragraph 1, as follows:
"With the exception of specific contractual provisions, the acts referred to in Article 4, paragraph 1, letters a) and b) are not subject to the authorization of the right holder, when such acts are necessary for use of the computer program in accordance with its intended purpose, by the legitimate purchaser, as well as for the correction of errors".
Articles 69c and 69d of the law on copyright and related rights [Gesetz über Urheberrecht und verwandte Schutzrechte (Urheberrechtsgesetz)] of 9 September 1965, as subsequently amended (hereinafter the 'UrhG'), transposed into internal legal order, respectively, articles 4 and 5 of directive 2009/24.
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Federal Court of Justice
On 17 July 2013, the Federal Court of Justice converted the judgment of the Court of Justice of the European Communities into German law. It is therefore permissible to distribute used licenses and transfer the rights associated with them to the next license purchaser. Again, physical and non-physical copies are treated on an equal footing.
The subsequent purchaser will comply with the directives specified in the copyright by noting the "intended use" of the copy of the program set out in the license agreement. Thus, he can easily avoid an "infringement of copyright of computer programs" (Federal Court of Justice 17 July 2013, protocol nr. I ZR 129/08, juris, Rn 86).
The Federal Court of Justice with the latest ruling of 12/11/2014 has eliminated the last legal uncertainties in the used software market. The Frankfurt Court of Appeal had already issued a judgment in 2012 (protocol nr. 11 U 68/11) which largely liberalized the software used for commerce based on the decision of the European Court of Justice. The decision was based on the fact that licenses purchased under volume agreements could also be resold individually. The Federal Court of Justice has now rejected Adobe's appeal against this judgment in its entirety (protocol no. I ZR 8/13). Thus, the judgment of the Frankfurt Court of Appeal was ultimately upheld and all legal questions relevant to the trade with used software were finally settled.
Frankfurt Court of Appeal
In its ruling of 18 December 2012, which implements for the first time the ruling of the Court of Justice of the European Union, the Court of Appeal of Frankfurt am Main ruled that the sale of used licenses is legal. According to the decision of the Court of Appeal, licenses resulting from volume contracts can also be sold individually.
'The resale of the contested copies does not [result in] […] an inadmissible division of a single license under the law. A volume, multiple or package licence» (Frankfurt am Main Court of Appeal 18 December 2012, protocol n. 11 U 68/11). The serial number of the licenses installed on a PC is irrelevant.
Already in 2006 the Hamburg courts had declared that the principle of exhaustion had also entered into force for volume contracts. As a result, for example, "the sale or marketing of individual Microsoft software licenses, previously released under volume licensing agreements such as Select Agreements, is legally permissible [...] without Microsoft's consent [...] and not [infringes] the copyright of Microsoft' (Court of Hamburg 10 September 2007, protocol nr. 315 O 267/07).
The sale and purchase of used software licenses for copies of programs is also legal in Switzerland. With the sale of the software in any form, the copyright expires, because with the sale of the software the producer gives the first purchaser the rights to use the copy of the computer program (Rigamonti, AJP 2010,584).
The exhaustion of the distribution right under Swiss copyright law is managed in a similar way to that of the EU: "If an author has sold a computer program or has accepted the sale, it may be used or resold" (Art. 12 paragraph 2 URG). This principle is the basis of the judgment of the Cantonal Court of Zug of May 4, 2011, which authorizes the marketing of used licenses for copies of programs in physical and non-physical form (Cantonal Court of Zug, May 4, 2012, protocol nr. ES 2010 822 ).
Judgment of 16 September 2021 case C-410/19
It is the "sale of goods", pursuant to art. 1, par. 2 of directive 86/653, the supply of a computer program to the customer by electronic means upon payment of a price, when accompanied by the granting of a perpetual license to use the computer program.
With the Judgment of 16 September 2021 (case C-410/19), the EU Court of Justice ruled for the first time on the interpretation of the concepts of "sale" and "goods" pursuant to art. 1, an indivisible whole. Indeed, downloading a copy of such a program is useless if the copy itself cannot be used by its owner. Both operations must therefore be examined, for the purposes of their legal classification, as a whole.
The Court therefore came to the conclusion that it concerns the transfer of a property right, the making available of a copy of the program by download and the conclusion of a related user license agreement (aimed at allowing customers to use that copy , permanently, against the payment of a price intended to allow the owner of the copyright to obtain a remuneration corresponding to the economic value of the copy of the work of which he is the owner). Therefore, in compliance with the provisions of article 1, par. 2 of Directive 86/653, it must be considered that the supply of software to the customer by electronic means upon payment of a price, if accompanied by the granting of a perpetual license to use the same software, can fall within the Community concept of "sale of goods".
Through volume licensing, a company purchases multiple licenses, for which it obtains a download link. The software is then installed on an appropriate number of computers. One license is required for each computer. Please note that, unlike a single user license (e.g. OEM), volume licenses do not include a user manual or other packaging elements. Volume licenses are not compatible with OEMs.