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12 October 2016Copyright

CJEU limits resale of back-up computer programs

Europe’s highest court has ruled that the initial acquirer of a computer program who has an unlimited user licence can resell the copy and licence in some circumstances.

In a decision handed down today, October 12, the Court of Justice of the European Union (CJEU) held that copyright in such programs can be passed on to new users, but only under certain conditions.

If the original copy has been damaged, destroyed or lost, the acquirer “may not provide his back-up copy of that program” to a second acquirer without the authorisation of the original rights owner.

The court was ruling on a case involving Aleksandrs Ranks and Jurijs Vasiļevičs, referred by the criminal law division of the Riga Regional Court, Latvia.

Criminal proceedings were brought against Ranks and Vasiļevičs, who were charged with the unlawful sale of objects protected by copyright and intentional unlawful use of another person’s trademark.

“They are alleged to have sold various copyright-protected computer programs published by Microsoft (such as versions of the Microsoft Windows software and the Microsoft Office suite) on an online marketplace in 2004,” said the CJEU in a statement.

It’s estimated that they sold more than 3,000 copies of programs, and the material damage caused to Microsoft has been evaluated at €265,514 ($292,762).

The CJEU was asked whether a party who has obtained a back-up copy of a computer program from the first acquirer can resell that copy where the original material has been damaged and the initial acquirer has “erased his copy or ceased to use it”.

The question concerned the directive on the legal protection of computer programs, Council Directive 91/250/EEC.

Under the rule of exhaustion, the court explained, a copyright owner that has sold in the EU a copy of a program on a material medium (such as a CD-ROM or a DVD-ROM) with an unlimited user licence can no longer oppose the subsequent resale of that copy.

The referred question specifically concerned the resale of a computer program stored as a back-up copy.

“The making of a back-up copy of a computer program is therefore subject to two conditions. That copy must (i) be made by a person having a right to use that program and (ii) be necessary for that use,” said the CJEU.

According to the court, the rule, which “lays down an exception to the exclusive reproduction right” of a copyright owner, must be interpreted strictly.

It ruled that a back-up copy may be made and used “only to meet the sole needs of the person having the right to use that program” so the initial acquirer cannot use the back-up copy to resell that program.

Wioletta Kulińska, attorney-at-law at Magnusson Warsaw, said: “It seems to be yet another little step back or at least an attempt to clarify by the CJEU, after a very controversial judgment in UsedSoft v Oracle.”

She added that the decision that back-up copies may not be resold is “mostly reasonable and of course should be appreciated by copyright holders”.

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