Archive notice: This article was originally published on May 15, 2008. Links and embedded videos are preserved as part of the historical record.
In a letter to public-sector IT procurement offices, Usedsoft claims that trade in used software is legally protected «without any ifs or buts». The company seeks to substantiate this with rulings by the Federal Court of Justice (BGH) and Hamburg courts. However, none of these rulings concerns the trade in used licences practised by Usedsoft. At Microsoft’s request, Munich Regional Court I has now ruled in preliminary injunction proceedings that the following statements are impermissible:
«Standard software may be resold. This has been confirmed without any ifs or buts by, among others, the Federal Court of Justice and Hamburg courts: the legal basis for trade in used software is the principle of exhaustion under German copyright law.»
«The principle of exhaustion is mandatory law that cannot be ’contracted out of’, i.e.: conflicting manufacturers’ licence terms are ineffective on this point once exhaustion has occurred.»
How the Courts Actually Ruled
In fact, eight years ago the BGH dealt with a dispute between a Microsoft dealer and Microsoft over whether a complete original System Builder product, usually consisting of a data carrier, a certificate of authenticity, a manual and an end-user licence agreement (sometimes only available online), may also be sold to the end customer without hardware. The court ruled in favour of the Microsoft dealer at the time and permitted the separate sale of the software product package without the hardware. Trade in used licences played no role in this legal dispute, and consequently none in the BGH’s ruling.
The cited Hamburg proceedings from 2006 are not a blank cheque for trade in used software either. The point at issue in the case between software dealer Klar EDV and Usedsoft was not the legal question concerning trade in used software. Instead, it concerned whether Usedsoft’s advertising for used licences violated competition law and therefore had to cease. The Hanseatic Higher Regional Court (OLG), on appeal, therefore ruled solely under the Act Against Unfair Competition (UWG) and found that Usedsoft had made sufficiently clear in its advertising at the time that trade in used licences involves legal risks. The court neither examined nor confirmed the legal admissibility of this trade. Detailed information on the rulings mentioned can be found at http://www.gebrauchte-software.org in the Facts (Milestones) section.
As a result of the preliminary injunction, Usedsoft may no longer make the substantively false statements about the legal position concerning trade in used software. The preliminary injunction is a provisional decision issued without an oral hearing and can still be challenged.
