A preliminary ruling by Advocate-General Bot in UsedSoft v. Oracle has determined that users are allowed to re-sell and re-distribute software that has been acquired by purely online means. Recipients of such software, however, require the developer's permission to install and run the program.

Background

Copyright owners can exclude others from performing certain acts in relation to their protected work, including reproducing or distributing it without permission. One important exception to the copyright protection granted to software is that a "lawful acquirer" of a copy of a computer program can reproduce it without the rightholder's permission, provided that he does so in order to use it in accordance with its intended purpose. A copyright owner is also unable to prevent the re-distribution of any copy of software that it has "sold" within the EU: his distribution rights in respect of such a copy are said to have been "exhausted" by the sale.

The Advocate-General's Opinion

The Advocate-General, who advises the full Court on how it should rule, has opined that because the downloads at issue in this case involved the "transfer of ownership of a copy of the computer program, for an unlimited period of time, in return for a one-off fee" they amounted to a "sale" within the meaning of EU law. Accordingly, the software developer's distribution right in respect of each downloaded copy of the software had been exhausted, meaning that the developer could not prevent the downloader from distributing the downloaded copy of the program, via sale or otherwise, to a third party. That third party would also be free to sell it to someone else, and so on.

However, the Advocate-General has also advised the Court that anyone acquiring "used" software is not a "lawful acquirer" within the meaning of the relevant legislation, in part because they do not have a direct contractual relationship with the software developer. As a result, the developers' permission must be given before there can be any reproduction of the copy of the software, for example during installation or during normal use.

Conclusion

In summary, the Advocate-General has advised that while the onward sale of Oracle's software does not require Oracle's consent, installing and running it does. The judgment of the full Court is expected by the end of this year.

For fuller consideration of this Opinion, and a guide to some of the steps that developers should now be taking to protect their position, please see our Client Advisory here.

The case is Axel W. Bierbach, administrator of UsedSoft GmbH v. Oracle International Corp. Case C-128/11. The Advocate-General's Opinion can be read in full here.