Software Licensing After Oracle v. UsedSoft

Abstract

AbstractIn July 2012, the CJEU issued its preliminary ruling in the Oracle v. UsedSoft proceedings. The decision is significant for several reasons, not least because the Court resorted to a surprisingly broad application of the exhaustion principle.This paper will first set out the legal framework of the decision, in particular the relevant provisions of the Software Directive and the Information Society Directive as well as the WIPO Copyright Treaty (I.). Subsequently, the questions raised by the German Federal Supreme Court are briefly outlined (II.). The main part of this paper focuses on the opinions of the Advocate General and the CJEU ruling (III.). In analysing their interpretations of Articles 4(2) and 5(1) of the Software Directive, the paper reveals that neither the Advocate General’s nor the Court’s understanding of the exhaustion principle is consistent with the WIPO Copyright Treaty and the approach in theUS according toVernor v. Autodesk (IV.).This paper endswith concluding comments, which highlight the implications of the CJEU’s decision for copyright owners in general and software vendors in particular (V.). It is argued that it will cause arbitrary distortions in some areas of software licensing. Unless the decision is rendered moot by future legislation, it will take a number of cases to re-balance the interests of the parties involved.