EU Court of Justice rules selling ‘used’ licenses for downloaded software is legal

The EU Court of Justice has upheld the right to sell “used” copies of downloaded software. Oracle had brought a suit against UsedSoft, which resells old Oracle software licenses, arguing that it was essentially facilitating piracy by helping to transfer a license between users. Unlike physical copies of software or things like CDs, which are easier to argue for as discrete items, a digital download is not a tangible product. Nonetheless, a preliminary ruling found that Oracle’s exclusive right to sell even digital software is “exhausted” after the first sale, leaving users free to sell the license to someone else. It also overruled the terms of service many companies use: “even if the license agreement prohibits a further transfer,” the court ruled, “the rightsholder can no longer oppose the resale of that copy.” Patches or other changes that are installed after the original download are also counted as part of the original sale.

There are some caveats in the ruling. Users can generally make backup copies of software, but if they sell the license, they’re required to destroy their own copies or make them unusable. They also can’t split up individual codes in a bulk license and sell them piecemeal. Overall, though, this ruling is a broad affirmation that digital downloads shouldn’t be treated differently from physical sales. It’s also a marked contrast to the US, which has upheld the right to resell or rent out CDs and DVDs (due to the first-sale doctrine, which lets third parties resell copyrighted works) but has so far allowed software companies to get around the doctrine by claiming that they’re selling a “license,” not the software itself.

Thanks de5gravity!