The initial acquirer of a copy of a computer program on a material medium accompanied by an unlimited licence to the use of that program is entitled to resell the copy and the licence to a new acquirer. However, where the original material medium has been damaged, destroyed or lost, the original acquirer may not provide his back-up copy of that program to that new acquirer without the authorisation of the copyright holder.

In its recent judgment in case C-166/15 of 12 October 2016 ("Judgment"), the Court of Justice of the European Union ("CJEU") has shed new light on the protection of computer programs against distribution. Aleksandrs Ranks and Jurijs Vasievics were charged with having sold various copyright-protected computer programs published by Microsoft Corp., such as versions of the Microsoft Windows software and the Microsoft Office suite, on an online marketplace between 2001 and 2004. The number of copies of computer programs sold is estimated at 3,000. In the case in hand, the CJEU addressed the following questions for a preliminary ruling submitted by the Criminal Law Division of the Riga Regional Court on the interpretation of Directive 2009/24/EC ("Directive"):

1) W hether a person who has acquired a computer program with a "used" licence may rely upon the exhaustion of the right to distribute a copy of that computer program;

2) Whether the person has the right to resell that computer program on a non-original disk to a third person.

Exhaustion of reproduction right

Article 4(2) of the Directive stipulates that the first sale in the Community of a copy of a program by the copyright holder, or with his consent, shall exhaust the distribution right within the Community of that copy. In the Judgment, the CJEU has clarified that a first sale is deemed to mean the first marketing on the EU market of a copy of a computer program stored on a material medium (such as CD or DVD) along with an unlimited licence to use the copy. The CJEU has concluded that the holder of the copyright to the computer program can no longer oppose the resale of that copy by the initial acquirer or subsequent acquirers of that copy, notwithstanding the existence of contractual terms prohibiting any further transfer. The CJEU has also pointed out that the exhaustion of the distribution right concerns the copy of the computer program itself and the accompanying user licence, and not the material medium.

Under the rule of exhaustion of the distribution right, the acquirer of a copy of a computer program is entitled to resell that used copy to a third party without the consent of the copyright holder.

Computer program sold on a non-original disk

The CJEU has noted in the Judgment that the making of a back-up copy by a person having a right to use the computer program may not be prevented by contract, in so far as it is necessary for that use. As a result, the making of a copy is subject to two conditions that must be satisfied concurrently: the copy must be made by a person having a right to use that program, and it must be necessary for that use.

The CJEU has emphasised that if the copy is necessary for the use of the computer program by the lawful acquirer in accordance with its intended purpose, the consent of the copyright holder is not required. However, a back-up copy may be made and used only to meet the sole needs of the person having the right to use that program. The CJEU then expressly states that a back-up copy of a computer program on a non-original disk must not be used for resale without the consent of the copyright holder, even when the lawful acquirer has damaged, destroyed or lost the original material medium.

Conclusion

Three fundamental conclusions can be drawn from the Judgment which we consider important for our future practice:

1) Under the rule of exhaustion of the distribution right, which is the first marketing in the European Union of a copy of a computer program stored on a material medium, accompanied by an unlimited licence to use, the acquirer may resell the program without the consent of the copyright holder.

2) T he acquirer is entitled to make a back-up copy of a program if it is necessary for the use of the program.

3) H owever, the back-up copy must serve solely the personal needs of the original acquirer who is not entitled to make it available (sell) to another acquirer without the authorisation of the copyright holder, even if the original material medium of the copy delivered to him has been damaged, destroyed or lost.