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Legality of Resale of Software Confirmed in European Court Microsoft Case

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The European Court has restated the legality of the resale of software in the EU in its latest judgment but confirmed that the principle does not extend to software transferred on back-up discs.

The case follows 12 years of investigation and criminal proceedings in respect of Microsoft Windows and Office software sold on eBay by a Latvian reseller, ‘Soft Home’.  Fake Certificates of Authenticity and labelling had been created with the software being supplied on duplicate discs copied over from original OEM discs supplied with PCs or back-up discs obtained without transfer of the related hardware.

The two directors of Soft Home, Aleksandrs Ranks and Jurijis Vasiļevičs, had marketed and sold pirated copies of Windows 95, Windows 98, Windows 200 Professional, Windows Millennium, Windows XP, Office 200 Professional and Office 2003 Small Business netting US$300,000.

The individuals were finally found guilty by the Latvian criminal courts in January 2012 but, following multiple appeals, there was a referral to the European Court in April 2015 requesting clarification of the 2012 ‘UsedSoft’  case – this first established that resale of pre-owned software could be lawful subject to certain conditions.

In its judgment last week, the court acknowledged the continued applicability of the UsedSoft case but declared that legal resale could not be effective by the use of back-up discs eg those delivered with OEM installed software without Microsoft’s consent.

Robin Fry, legal director at software license specialists, Cerno, said

‘Since the used software market first opened up in 2012, the concept of ‘authorised resellers’ has dissipated as the only mark of lawful sellers of business software. Software vendors have seen an upturn in criminal traders using the new marketplace to distribute obviously pirate software.  Against the backdrop of a long-running fight by Microsoft against one Latvian reseller, Europe’s highest court has confirmed that back-up discs can’t be used as the medium of transfer but otherwise reinforced the general principles that used software with perpetual licenses can indeed be resold. This now gives greater certainty to buyers and sellers venturing into this fledgling market and a helpful steer as to what media may be used for any license transfer.’