Transfer of software licenses, or resale. Eg. SIMS.net, and EU law

[localzuk]

So, I was reading an article last night about Oracle being slapped down by an EU court saying that once a company has sold a license, they have exhausted their distribution rights and the owner of that license is then free to sell it on or give it away. (Judgement here - http://curia.europa.eu/jcms/upload/docs/application/pdf/2012-07/cp120094en.pdf, relevant directive 2009/24/EC, as implemented by The Copyright (Computer Programs) Regulations 1992 in the UK.

 

Specifically, this section in the UK law.

 

“(3) References in this Part to the issue to the public of copies of a work where the work is a computer program are to the act of putting into circulation copies of that program not previously put into circulation in the United Kingdom or any other member State, by or with the consent of the copyright owner, and not to—

(a)

any subsequent distribution, sale, hiring or loan of those copies, or

(b)

any subsequent importation of those copies into the United Kingdom,

except that the restricted act of issuing copies to the public includes any rental of copies to the public.”.

It got me thinking - how does this mesh with Capita and the whole academies re-licensing debacle?

 

If a license has been sold to an LEA, then regardless of the clauses in the contract, EU law dictates that the LEA is legally allowed to sell that license on to another entity, at a price of their choosing.

 

So, how then are Capita still getting away with forcing schools to buy new licenses?

 

Other similar examples exist too - look at the terms and conditions on many licenses and they include 'non-resale' clauses. Eg. 2Simple have this on their Ts and Cs.

Edited July 4, 2012 by localzuk

[CyberNerd]

I'm guessing that if you took them to court they would bend quite quickly. All the time no-one bothers they will get away with it.

[teejay]

This is very interesting, problem is the only way to resolve this I believe is for an Academy to take Capita to court over it to get a judgement, trouble is that could cost more than just paying for the license, so is a real gamble.

[Achandler]

The chances are:

 

1) No one has challenged Capita properly, or those that have haven't had to pay.

2) No one in the LEA or Capita knows about the laws (highly likely)

[glennda]

This is very interesting, problem is the only way to resolve this I believe is for an Academy to take Capita to court over it to get a judgement, trouble is that could cost more than just paying for the license, so is a real gamble.

 

The LEA's should take Capita to court over it - They tend to have huge legal teams so it would only cost them time rather then paying large legal fees to external agencies.

 

I know when our school was taken to court by a company we had the LEA do all the work and didn't cost us a penny (we sign up to a legal services SLA).

[teejay]

That's the problem though, once you're an Academy you are an independent company and so not part of the LEA, so LEA legal services won't act on your behalf (unless you buy their services which is going to cost anyway).

[glennda]

That's the problem though, once you're an Academy you are an independent company and so not part of the LEA, so LEA legal services won't act on your behalf (unless you buy their services which is going to cost anyway).

 

I know that, but LEA's will still let you sign up to there SLA's. I Know WSCC allowed schools i sign up to there SLA's once academies. But you must being thinking about Sims Licensing etc before you become an academy. If its in the interest of the LEA to get money for a license they own they may well help you fight it.

[Chris_Jones]

I was looking at this last night when I first saw the ruling. As I understand it, the companies cannot stop you selling on or giving away the licence. However I dont think there is anything that would force them to provide support for a re-sold licence, so you could buy a second hand SIMS licence but Capita could turn around and demand a support fee from you.

Same with firms that sell software by download - I dont think they would have to provide downloads to the second hand buyer, or support/upgrades

[localzuk]

I was looking at this last night when I first saw the ruling. As I understand it, the companies cannot stop you selling on or giving away the licence. However I dont think there is anything that would force them to provide support for a re-sold licence, so you could buy a second hand SIMS licence but Capita could turn around and demand a support fee from you.

Same with firms that sell software by download - I dont think they would have to provide downloads to the second hand buyer, or support/upgrades

 

They make you pay a support fee anyway...

[Arthur]

From a recent HN post...

 

According to a more comprehensive [article]:

 

- The court has ruled that reselling doesn't violate copyright, but nothing prevents a software vendor from forbidding the reselling in it's license. The court didn't force vendors/service providers to permit reselling.

- The court has not demanded that vendors enable the reselling technically.

- The court has limited its ruling to computer programs, and excluded media like ebooks, video, music and the like.

 

So in effect, this will change: Software vendors will have to change their licenses to prevent reselling.

[localzuk]

From a recent HN post...

 

That doesn't match up with what the Oracle case judge just ruled though - it specifically says that including it in the license is unenforceable. Basically, once the license is out of their hands, they cannot control this. So, that reading seems to be wrong - compared to every other reading of it I've seen anyway.

[featured_spectre]

Everywhere that I have read it states that EU law prevents companies enforcing any type of system that negates bodies from selling their licence. As such the school becoming an academy, if they have their own SIMS licence, they could "Sell" it to the new academy at a fee of their choosing.

[localzuk]

Just as a clarification. The European courts have ruled on various aspects of the principle of exhaustion, covering both tangible and intangible software sales.

 

Tangible sales are you and I going into a shop and buying a box with Windows 7 in it. Intangible are a company buying a license to use a piece of software - be it online, or offline.

 

So, the idea that all a company need do is alter their terms and conditions is wrong, plain and simple - it was already covered in the different cases, and there are no provisions for it in either the EU directive or the UK regulations that amended the Copyright, Designs and Patents Act.

[Dos_Box]

“(3) References in this Part to the issue to the public of copies of a work where the work is a computer program are to the act of putting into circulation copies of that program not previously put into circulation in the United Kingdom or any other member State, by or with the consent of the copyright owner, and not to—

 

Just to play devils advocate here. What that statement says to me is that whilst you can sell on the (any) program, if it requires client licences to access you would have to purchase those separately as client licences and client software are not necessarily 'the program' in question.

[localzuk]

Just to play devils advocate here. What that statement says to me is that whilst you can sell on the (any) program, if it requires client licences to access you would have to purchase those separately as client licences and client software are not necessarily 'the program' in question.

 

That is what the court just ruled on - there is no differentiation between licenses and the physical software. ie. intangible and tangible software sales. Oracle were trying to say that licenses aren't software and the court disagreed.

[localzuk]

Been doing a bit more reading, with the help of a useful article on the register today, and it appears that Capita would still be safe - if the licenses were sold as a pack.

 

Ie. An LEA wouldn't have the right to sell extra licenses it doesn't need if it bought them as one pack.

 

Used software firms win small victory in shrinking on-premises world ? The Register