Oracle Losses EU Software Resale Battle
It’s nothing new these days, but Oracle has been involved in yet another court battle. This time, the Redwood City, California based Oracle was in Europe trying to prevent a German company from reselling Oracle software licenses.
Oracle had launched proceedings against UsedSoft, a German company that markets used software licenses acquired from customers of the U.S. software company. Oracle, the largest maker of database software, claimed UsedSoft’s business model was breaking license agreements.
UsedSoft's business model hinges completely on reselling used packages or legally obtained license keys for them. By reselling the keys to clients, the clients are then able to download the latest version of a given program directly from a company's Internet site and obtain all new updates and patches in the process.
The European Court of Justice on Tuesday July 3, 2010 ruled that used software licenses may be resold by individuals or companies. The Luxembourg-based court sided with UsedSoft ruling that trade in used software was permissible even if the software had not been shipped on a physical medium such as a CD or DVD, but had been digitally downloaded from the Internet. "The exclusive right of distribution of a copy of a computer program covered by such a [used] license is exhausted on its first sale," the EU court ruled.
Oracle said the ruling ignored the value of innovation and intellectual property and said in an email statement that customers faced unnecessary risks by buying second-hand software licenses without knowing if the originals were purchased legally. Clearly, an attempt to sway potential customers away from the second hand market.
“This decision is a milestone for free trade in Europe,” said Peter Schneider, the managing director of UsedSoft. “This is particularly good news for customers who can finally benefit from low software prices without restrictions.” UsedSoft said that the ruling also pertains to computer programs sold by Microsoft and Adobe. "The door for the trade in used software has been pushed wide open throughout the European Union," UsedSoft said in a statement, welcoming "perfect legal safety on the market."
The court judgment did set limits on software resales, saying the original buyer must make their own copy unusable when the software is resold. The original owner must erase every copy on their own computers in advance and is not allowed to keep a copy after resale. Resellers also aren’t authorized to divide a license for several users and to sell them separately, the court said in the statement.
This is not only great news for UsedSoft but for all third party resellers. XSi provides comprehensive SUN/Oracle Hardware & Software Solutions, as an alternative to Oracle Sun’s Premiere Support for systems and Operating Systems. To find out more visit our Sun Oracle Products or Sun Oracle Maintenance pages.