A recent European Court of Justice ruling allowing the re-sale of perpetual software licences has been widely reported, and a number of our clients have asked questions about its impact on NZ software suppliers.
In this case, German company, UsedSoft, resold perpetual licences to Oracle’s database software. If a client bought a licence for 100 users but now only had 50 staff, UsedSoft would resell that unused allocation. Oracle sought to stop this practice on a number of grounds, including that the licence was non-transferable under the licence agreement.
Based on the wording of the relevant EU directives (which overrule the express terms of a licence agreement), the Court held:
If you supply or intend to sell software to customers in the EU, you may want to give some thought to your supply model. If your current model is based on up-front license payments, and you are concerned about subsequent second hand sales of your software, you may want to restructure your model to better protect your interests. E.g.:
Since increasing recurring revenues is often an important business objective for software companies, these approaches may make good commercial sense.
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