Unlawful trading in used software licences

Licences from the original licence holder and resale to a third party infringe the copyright of the software manufacturer. The manufacturer (author) of software can effectively restrict the right of disposal with regard to the usage rights granted in such a way that these cannot be further assigned. Any potential invalidity of such a contractual clause under general terms and conditions law does not stand in the way of this.

If the second acquirer does not obtain the software from the first acquirer but in another manner, and the software remains with the first acquirer, this transaction is not covered by the doctrine of exhaustion, as exhaustion applies only to the distribution right, not to the reproduction right.

The division and partial resale of licence rights sold as a unit by the author (software manufacturer) does not sufficiently take into account his interest in remuneration through the first distribution alone.The court's decision

The Regional Court (LG) Munich I had to address in its judgment of 19.01.2006 (Az. 7 O 23237/05) the question of whether this procedure violates the copyright and trademark rights of the Ast. and is furthermore anti-competitive, and whether Ast. is therefore entitled to the injunction claimed.

Ast. possesses as the producer of the disputed software the exclusive copyright usage rights therein, which are infringed by the sale of 'used' licences. By isolated sale of software licences, Ag. induces third parties – its customers – to make reproductions, as it creates the impression that by acquiring the licence, an increase in workstations (reproduction through loading the program into working memory) or the download of the software (reproduction through copying) is permissible. In fact, the reproduction right pursuant to §69c Nr. UrhG is reserved exclusively to the rightholder. The transfer of usage rights to the first acquirer took place with exclusion of further assignment options, which is generally possible with proprietary effect (see BGH NJW-RR 1987, 181 – Videolizenzvertrag).

An invocation of the exhaustion doctrine (§§69c Nr. 3, 17 II UrhG) would also not be possible. This applies solely to the distribution right, not to the reproduction right. Exhaustion has the consequence that further distribution of the software is no longer controllable by the author. However, there is no distribution by Ag., as it trades only in licences. The court proceeds on the basis that exhaustion in the case of non-tangible works such as download software is not in question in the first place, since in this case the marketability is not preserved but rather first created.

This is also supported by the present danger of division and piecemeal sale of the licence rights originally sold as a unit by the manufacturer. The court rightly points out that the interest in remuneration of Ast. is not sufficiently taken into account by the first distribution due to its degressive price structure. This also inevitably results in the requirement for reproduction, which is incompatible with the exhaustion doctrine. Ast. is therefore entitled to an injunction based on copyright.

The court further regards the application for an injunction as well-founded from a trademark law perspective (§14 V, II Nr. 1 MarkenG). Due to the advertising by Ag. using registered marks (the designations of the various software products) of Ast., there is a trade mark use – namely as an indication of the manufacturer of the software – and thus a trade mark infringement. Trade mark exhaustion pursuant to §24 MarkenG is likewise not in question in this respect, as Ag. in truth sells not licences but a legal 'nothing'.

The injunction entitlement finally also results from competition law considerations. The advertising statements of Ag. are namely misleading, as customers in fact cannot acquire licence rights from it for legal reasons. In this regard, particular reference is made to the statement that 'the lawful sale is confirmed by a notarial attestation'.