On 26 January 2015, the Court of Appeal of Gent dismissed the claim of a software company for copyright infringement against another company that integrated its computer program into an ERP solution for dentists.

This computer program and the accompanying license key were ordered by and delivered electronically to an authorized reseller for the explicit purpose of resale. On many occasions, the Court stressed the fact that, apparently, the software company did not impose any restriction in this respect. Also, it appears that the defendant that acquired such computer program from the reseller did not know that it was the property of the plaintiff since the reseller never mentioned it and the software company failed to demonstrate that its licensing scheme should normally have been passed on to the defendant via the reseller. The latter went bankrupt two years later.

The software company then initiated a lawsuit against the second acquirer, asking for monetary damages and a cease-and-desist injunction.

However, pursuant to the Court that made several references to the landmark decision of the European Court of Justice dated 3 July 2012 UsedSoft v. Oracle (C-128/11), the defendant is a “lawful acquirer” within the meaning of Article 4(1) of the Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (the Directive) since it validly acquired the disputed component from an authorized reseller.

Therefore, the Court found that the defendant may benefit from the exception of Article 5(1) of the Directive, pursuant to which the authorization of the right holder is not required for some acts (such as the permanent or temporary reproduction by any means and in any form, in part of in whole) where they are necessary for the use of the computer program in accordance with its intended purpose. In the current case, the disputed software development kit aims to integrate third party applications. Furthermore, the Court ruled that the software company contractually agreed with such resale for commercial use, at least implicitly.

Finally, the Court decided that the right of distribution is exhausted towards the defendant and that such exhaustion does not relate solely to one physical copy of the program. Should the license key be used only-once for resale, then the software company should have expressly stipulated so, said the Court.      

The case can be found on http://www.ie-forum.be