Sale of counterfeit OEM software licences

version of standard software is not a counterfeit. When calculating damages claimable by the software manufacturer, the market value of unbound OEM versions must be used, as the OEM market is not an illegal distribution channel.

The claimant ordered three OEM versions of her standard software 'MS Office Professional' from the defendant. These were admittedly counterfeit, which would also have been ascertainable upon careful examination. The claimant therefore demanded damages for the resulting infringement of her copyright exploitation rights, namely the right of exploitation.

The court's decision

The court proceeded on the assumption (Higher Regional Court (OLG) Düsseldorf, judgment of 15.02.2005) that this infringement of the claimant's right of exploitation was culpable, as the defendant must have known that software producers make OEM versions available exclusively to hardware manufacturers for pre-installation and that, moreover, software counterfeits (pirate copies) circulate in large numbers. The required examination should therefore have been carried out by the defendant with the greatest care and, if necessary, by removing the existing sealing.

The licence damages claimed by the claimant are to be calculated on the basis of the price that a law-abiding dealer would reasonably have paid when contractually granted the right to use. The trade in free OEM versions is namely not illegal, as the Federal Court of Justice (BGH) has already established in its fundamental judgment (MMR 2000, 749). According to this, a software manufacturer cannot contractually prescribe to its customer that OEM software may only be sold in connection with new PCs. In this respect, the principle of exhaustion of the author's right of distribution applies in full. For in German law, a contractual arrangement can never have effects at the expense of an uninvolved third party. The software manufacturer – like any other producer – therefore has no influence on the further distribution of its product in principle after the first sale.

The retail version, by contrast, cannot be used to calculate the damages, as a full version of the software in dispute was not ordered and was also not delivered.