It’s just after Christmas and with the holiday spirit in mind, I want to let that “software” Santa is alive and well but only in Europe!

So what’s this about? Many organizations have considered selling software licenses that they are no longer using due to buying too many licenses or converting to a different software but in North America you can’t resell your unused – but paid for – software licences. However, in Europe you can legally do just that.

Last year in July, Europe’s highest court, the European Court of Justice ruled against Oracle Corp. stating that the exclusive right of distribution of a copy of a software is “exhausted” on its first sale (see this page for more information). Copyright “exhaustion” refers to the concept that once you sold something, you gave up your right to control it. This means that the selling and/or trading of used software licences is legal in Europe and that the issuer of such software cannot oppose any resale.

Last month this was further strengthened by a German (Hamburg Regional) Court that ruled that SAP’s terms and conditions are anti-competitive. Those clauses among other things, required written permission from SAP for the resale of SAP licences. The ruling means that SAP software can now be resold in Germany without the vendor’s permission.

And what’s happening in North America? Have the European rulings created a debate? Has any media covered it? The best I could find is a story about an appeals court ruling in the US that when dealing with software, as long as the provider calls what it sells “a licence” rather than a “sale”, the provider (eg. Oracle or SAP) keeps the re-sale rights.

It is interesting that there is no debate on the subject in North America when a similar ruling would benefit many organizations as most have unused software licences that they could sell. This would help the organization purchasing the used software licenses as the buyers would get the full benefit of the software at a fraction of the cost. It would also create a resale market for used software licences. It would be
just like cars, some people will only buy used cars while others want new ones with the latest features.

In the new world of software licencing, North American vendors will find that they are at a disadvantage when they compete for business in Europe unless they offer their products to the new and used market. They will probably change their licencing terms to allow the flexibility of the reselling feature in Europe, but not in North America as there is no pressure to do so.

What do you think, should the reselling of software licences be allowed?

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