Clear legal foundation

Anyone considering buying or selling used software licences can rest assured. It is certainly legal to resell software licenses that were purchased at any point in time.

Legal justification

The legal justification for this lies in the so-called principle of exhaustion. This leads to the fact that distribution rights as per copyright of a copy of an asset protected by copyright are exhausted once it has been placed into circulation rightfully. 

For the EU and Germany, supreme court rulings have unequivocally confirmed this legal situation

European Court of Justice – judgement issued on 3 July 2012 (Case C-128/11)

Where the copyright holder makes a copy of a software product available to their customer – whether on a material medium or as a download – and at the same time concludes, in return for payment of a fee, a license agreement granting the customer the right to use that copy for an unlimited period, that right holder sells the copy to the customer and thus exhausts their exclusive distribution right. This means that the copyright holder can no longer oppose the resale of this copy by the customer (first acquirer), if the customer makes his own copy unusable at the time of the resale. This even applies if the license agreement prohibits a subsequent transfer.

Bundesgerichtshof – judgement issued on 11 December 2014 (Case I ZR 8/1)

In general, it can no longer be disputed that selling relicensed software, even taken from volume licenses, is acceptable.

Bundesgerichtshof (Germany’s Federal Court of Justice) – judgement issued on 17 July 2013

For the resale of a copy of a program that has been downloaded from the website of the copyright holder, there is no requirement for the subsequent acquirer to receive a data carrier with the ‘exhausted’ copy of the computer program. It suffices if they download a copy of the program from the website of the copyright holder. Contractual provisions cannot revoke the right of the subsequent purchaser of the ‘exhausted’ copy of a computer program to use the program for its intended purpose. Nevertheless, the exhaustion of the right to distribute this copy can only be successfully invoked by this subsequent acquirer if the first acquirer has made their own copy unusable.

Conclusion

In general, it can no longer be disputed that selling used software, even taken from volume licenses, is acceptable.

What about Switzerland? Is the exhaustion right affected when purchasing from or selling to Capefoxx?

The legal situation in Switzerland is quite similar to the European Union. A sale to or a purchase from Capefoxx as a Swiss registered company is not affecting the exhaustion right, as it is based on the first sale between Microsoft and the first owner.

Microsoft Customer Letter regarding the purchase and use of used software licences

The distribution of licenses subject to certain legal conditions

01
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The products must be individually marketable (i.e., standard software products).
02
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Licenses issued by the manufacturer must be perpetual.
03
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The software must have been distributed legally.
04
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The software needs to be transferred in real terms - the seller’s copy of the software must be made unusable.
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