European Court rules in favor of digital resale

Better mow your digital lawn – we’re having an online yard sale! Ok, not really. But we could if we wanted to.

The European Court of Justice ruled today that it is, in fact, legal to resell used software regardless of whether the software was originally distributed on a physical disk or downloaded over the internet. The ruling ended a legal battle involving software giant Oracle who claimed a resale of their software was the same as pirating content.

Software vendors have long argued that software is "licensed, not sold." This claim is in tension with the doctrine of copyright exhaustion (called the first sale doctrine in the United States), which holds that copyright law does not give rightsholders control over used copies of their work. And the principle has gotten even more murky as software is increasingly distributed directly over digital networks, meaning that there's no physical copy of the work to resell. 

Oracle distributes its software online. Once a customer has signed a licensing agreement, it has an unlimited right to download copies of its database software from Oracle's website, and to install as many copies of the software as specified in its licensing agreement. A company called UsedSoft acted as a broker for used Oracle licenses, allowing Oracle customers who no longer needs (sic) their licenses to resell them to another firm that could put them to better use. [Ars Technica]

The decision handed down by the Court made the case that an online sale is essentially the same process as a physical sale and therefore licenses should be transferable.

The Court did, however, place some restrictions on software resale, stating that it is not legal to split up multiseat licenses and emphasizing that a legitimate resale requires that the seller's copy of the software be rendered inoperable at the time of the sale.