Here’s an interesting software ruling out of European courts that might have implications for digital music and e-book resale. The Wall Street Journal reports that Oracle sued a German software company, UsedSoft, that buys up and resells used software licenses from American companies.
In that case, the European Court of Justice has decided in favor of UsedSoft, stating that "The exclusive right of distribution of a copy of a computer program covered by such a [used] license is exhausted on its first sale.” Thus, it’s perfectly all right, at least in Europe, to sell your licensed software, regardless of what the license says, as long as you erase all copies of said software from your own computers when you sell it. This even applies to software downloaded from the Internet rather than bought on disks.
This stands in stark contrast to last year’s ruling in the US in which the Supreme Court declined to hear an appeal in the matter of an American used software vendor who bought up unopened copies of Autodesk at an office sale and resold them, contrary to the terms of the license by which they were sold to the original owners. This let the lower court ruling forbidding such sales stand. (Though to be fair, the original court ruling there was in favor of the used software vendor, too.)
Given that record labels and publishers insist that digital music and e-books are licensed software rather than sold media, this could mean that mp3 and e-book resales (such as the sort ReDigi is currently being sued over) would also be legal in Europe. Too bad European rulings don’t set precedent for the US, isn’t it?
This court ruling puts a massive dent in the FUD (Fear, Uncertainty & Doubt) tactics employed by the software vendors. However, worth noting that Usedsoft’s use of a ‘Notary’ (in part, to hide where the licences came from) was deemed illegal by the German courts and Usedsoft is now also going through insolvency proceedings. There are other secondary software licence suppliers whom adopt more transparent business models that do not rely on the Exhaustion Principle eg: http://www.discount-licensing.com.
Thanks for covering this. Just a point of clarification on this judgment that I have also made elsewhere- the implications for eBooks and digital music are as yet unclear. The Court takes care to highlight that the ruling applies specifically to software licences. It distinguishes the legal situation of computer programs from other digital services covered by the infosoc directive, like ebook or music distribution. These are still classed as services under EU law, stemming from a Directive and upheld by the court, and thereby not capable of being exhausted. The judgment doesn’t affect these areas, or does so very little, unfortunately. For a tipple of disatisfaction about this see AG Kokott in Football Associations at point 175.
However, I wouldn’t be surprised if some time soon we see non-software related cases arising that cause the Court, and more generally the EU legislature, to rethink their stance on the legal division between digital services and the sale of goods in situations where the content concerned is the same.