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Legality of Resale of Software Confirmed in European Court Microsoft Case

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The European Court has reasserted the legality of the resale of software in the EU but confirmed that the principle doesn’t apply to software copied from backup discs.

The judgment follows 12 years of investigations and criminal proceedings against a Latvian company which resold Microsoft Windows and Office Software on eBay. The directors of Soft Home, Aleksandrs Ranks and Jurijis Vasiļevičs, copied Windows software over from original OEM discs supplied with PCs or backup discs obtained without transfer of the related hardware. It then marketed and sold them with fake Certificates of Authenticity and labelling.

The sale, of copies of Windows 95, Windows 98, Windows 200 Professional, Windows Millennium, Windows XP, Office 200 Professional and Office 2003 Small Business, netted Ranks and Vasiļevičs USD 300,000.

They were found guilty in Latvian criminal court in January 2012 but following multiple appeals, the case was referred to the European Court in April 2015, for clarification of the ruling in the 2012 UsedSoft case. That case established that the resale of pre-owned software could be lawful, if certain conditions are met.

In the judgment handed down last week, Europe’s highest court acknowledged the applicability of the UsedSoft case but ruled that Soft Home’s resale of software wasn’t legal if it used back-up discs as a medium of transfer without Microsoft’s consent.

The ruling provides further guidance for legitimate software resellers, Robin Fry, legal director at software license specialists Cerno, said.

“Against the backdrop of a long-running fight by Microsoft against one Latvian reseller, Europe’s highest court has confirmed that back-up discs can’t be used as the medium of transfer but otherwise reinforced the general principles that used software with perpetual licenses can indeed be resold. 

“This now gives greater certainty to buyers and sellers venturing into this fledgeling market and a helpful steer as to what media may be used for any license transfer.”

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