Is it legal to buy and sell used licences?
Buying used software licences is legal under the Exhaustion Principle and the EU Software Directive 2009/24 as confirmed in the European Court Judgment in 2012 (CJEU Court Judgment (Case C-128/11 -3 July 2012), licences purchased in perpetuity can be reused on other computer equipment without any problem.
However, there are a number of issues to consider when purchasing used licences, especially if you operate as a business, as the purchase is often in considerable quantities.
Buying second-hand licences has great advantages for companies, as we acquire exactly the same product, but at a much lower price, which can mean savings of up to 70%.
Because of this, a multitude of ecommerce sites have emerged that claim to sell legal pre-owned licenses, but at impossible prices. These licences are not usually sent with documentation (they only send the product keys) and in many cases they have been resold to several users at the same time.
When are used licenses legal?
Based on the aforementioned Exhaustion Principle itself, a letter from Microsoft Germany in 2018 and Microsoft’s own website, we can summarise that the requirements for pre-owned software licences to be legal are:
- The software must have been originally marketed in the EU or in another contracting state of the European Economic Area (EEA) with Microsoft’s consent.
- The first acquirer must have been granted the right to use the computer program indefinitely; therefore, it must be a perpetual licence.
- The licence must have been granted against payment of a fee designed to enable the right holder, i.e. Microsoft, to obtain remuneration corresponding to the economic value of the copy of the computer program.
- All copies of the previous owners must have been rendered unusable at the time of resale.
These principles apply to software on original data carriers and to software that has been sold by download. The seller is obliged to provide the customer with all information necessary to assess the existence and scope of the licence used.
The latter is the differentiating point to be taken into account, as it is necessary for used licences to be legal, when buying used software licences.
What documentation must accompany used licences in order for them to be legal?
In order to be sure that the licences we are going to buy meet the above requirements, they must be accompanied by documentation, as “The seller is obliged to provide the customer with all the information necessary to assess the existence and scope of the licence used“.
At Cheapfy, we always send all this documentation along with the used licences we sell, so you can be sure as a company that the software licences you purchase with us are 100% legal:
- Invoices for all transfers of ownership of the licence(s).
- Certificates of uninstallation/non-use of the licence/s.
- Licence number(s) of the licence(s).
- First owner information of the licence(s).
- Original Microsoft contract number.
- Certificate that it was first placed on the market in the EU/EEA.
- Original VLSC screenshot.
In addition to sending you all this documentation directly, you will always have it available in our “CLSC” portal.
If you have any questions regarding the legality or purchase of used software licences, please contact us.
Buying used licences is a great advantage for companies, as they get exactly the same software, but at a much lower price. However, we must always be sure of the legality of these licences, especially in case of a possible audit by the manufacturer.