European court of Justice in its ruling on 3rd July 2012 ruled that trading of used software licenses is legal and that the author of that software cannot oppose such resale. This judgment makes exhaustion doctrine applicable for "software licenses".
Oracle Corp, the software giant, lost itschallenge seeking to prevent the German company Used soft from selling computer soft wares and licenses no longer used by the original owner.
Oracle develops and distributes software through internet which can be downloaded freely from oracle's website.After downloading the software, user has to obtain a user- right which is in the form of a license agreement, which grants him a right to store the program permanently in his server and also to allow access to 25 users. User is even allowed to download any updates or any correction for faults of the program from Oracle's website. But license agreement has a "non - transferable" clause which restricts the user from transferring it to others for an unlimited period.
Used soft markets already marketed and licensed software of Oracle. Oracle made a complaint against Used Soft in German Courts which requested the advice of ECJ on the issue.
ECJ was called to examine the exhaustion doctrine under Directive 2009/24/EC of the European parliament and the council of 23rd April 2009 on the legal protection of Computer programs. Article 4 of the said Directive reads as follows:
"The first sale in the community of a copy of a program by the right holder or with his consent shall exhaust the distribution right within the community with exception to control further rental of the copy"
ECJ while interpreting this provision in the current case said that in case a copyright holder enters into a license agreement, in return for a payment of a fee, then such an agreement would amount to sale of that copy and hence right holder exhausts his rights upon such copy. Thus a "non- transferable " clause in a license agreement can no longer be valid within EU.
Further Court did place some limits on resell , firstly in case of multiuser license it is not permissible to split up the license and sell them separately and secondly after reselling the software the original licensee shall make his own copy unusable.
Though this interpretation protection protects the interests of the consumers, it would be a blow to the business patterns of software giants who invariably inserts such clauses into licensing agreements. Further the idea that the original user shall make his own copy unusable appears to an inoperable idea.
No comments:
Post a Comment