Oracle: 'The battle against reselling software licences is not over'

A decision in the Court of Justice of the European Union allowing the resale of software licences caused strong reactions in Germany. Oracle's lawyer said the company will fight on

While the EU may have not have found in Oracle's favour in its long-running case to stop its software licences being sold on second-hand, but the company has vowed to carry on the fight.

The Court of Justice of the European Union (CJEU)passed judgment on the case, between Oracle and German reseller UsedSoft, last week : it ruled that software licences can be resold, even when the software in question is downloaded rather than bought on physical media.

While the ruling may have come as a blow for Oracle, the CJEU's decision is not the end of the story: the court has handed back the case to the Germany's federal court of law, the Bundesgerichtshof (BGH).

While the BGH is expected to broadly accept the verdict after clarifying a few details of the CJEU ruling, both Oracle and UsedSoft think it unlikely that BGH will reach its decision within the next few months.

According to both a spokesman for UsedSoft and Oracle lawyer Dr Truiken Heydn, the BGH is more liable to settle the question some time in 2013.

The question of timing is one of the few things both sides can agree on.

But when it comes to the verdict, Oracle intends to pursue its own path. "This is not the end of the legal process. We are confident that the member states of the European Union as well as the European Commission will do everything in their power to protect innovation and investment in the technology industry," Heydn said.

Oracle is also demanding further action over the issue of splitting - where a user can split a licence and sell on the part they're not using - according to its lawyer. "The court has forbidden the splitting of licences, but UsedSoft's whole business model is based on that. We will demand that the BGH upholds this principle," she said.

Heydn also believes that UsedSoft could be vulnerable around its use of contracts drawn up by a notary to cover the licences, in order to reassure customers: "We consider this use of a notary highly questionable. The contract does not show who the original licensee was or the conditions of the original treaty," she said.

And, while the court has granted users the ability to resell their licences, Oracle may yet find wiggle room: Hedyn also argues that the exhaustion of the distribution right - the software maker's right to exclusively determine how the software it produces is distributed - upheld by the court does not apply to additional licences or to maintenance services.

The case may have opened up a potentially huge trade in second-hand software, but it's not one UsedSoft has so far taken part in: UsedSoft has not sold any Oracle licences in the eight years that the legal battle has been going on. "UsedSoft acts rather like a broker. They contact a buyer when they have a seller," Hedyn said.

A spokesman for UsedSoft concurs that the company has not sold Oracle licenses - rather, Oracle sued UsedSoft when the company put up an advertisement for their services.

UsedSoft has received a huge wave of congratulations after the verdict, according to its spokesman.

The German Oracle User Group are among those who have reacted positively to the decision. Its CEO Dr Dietmar Neugebauer said: "We welcome the decision by the European Court. If the BGH confirms it, it will lead to a liberalisation of the market which would be positive for users."

However, Neugebauer, a database architect at German car maker BMW, also signalled there could yet be negative knock-on effects from the case: "How Oracle reacts to this decision remains to be seen," he said. We fear it could affect maintenance conditions or licensing terms."