The ongoing legal dispute between ValueLicensing and Microsoft has recently evolved, with Microsoft shifting its focus to copyright claims. This case, which began in 2021, was initiated by ValueLicensing. The reseller accused Microsoft of embedding restrictive clauses in customer contracts. These clauses allegedly hindered the resale of perpetual licenses while offering discounts.
ValueLicensing claims it suffered a loss of £270 million in profits due to Microsoft’s actions, which they argue stifled the marketplace. Microsoft has refuted these allegations and recently contended that reselling perpetual licenses constitutes a copyright infringement. ValueLicensing maintains that such reselling is legal, citing a European ruling from the UsedSoft case that affirmed the legitimacy of selling used software licenses.
Key Points in the Legal Battle
- Case Origin: Began in 2021 with ValueLicensing’s suit against Microsoft.
- Claims of Loss: ValueLicensing alleges £270 million in lost profits.
- Microsoft’s Response: Claims reselling perpetual licenses violates copyright laws.
- UsedSoft Precedent: ValueLicensing references a ruling that allows the sale of used software licenses.
The Copyright Argument
Microsoft argues that Office software is protected under copyright laws, specifically the Copyright and Information Society Directive. The company asserts that software like Office contains creative elements, including icons and fonts, thus qualifying it as a creative work.
Jonathan Horley, the CEO of ValueLicensing, highlighted a significant shift in Microsoft’s defense strategy. Previously, Microsoft denied the allegations outright but has now challenged the legitimacy of the market for reselling licenses. In September, during a preliminary hearing at the UK Competition Appeal Tribunal, the chairman noted the recent nature of Microsoft’s current stance.
Implications of the Case
This legal battle holds substantial implications not only for ValueLicensing and Microsoft but for the entire pre-owned software market. The outcome of this case could potentially impact numerous other resellers across Europe, particularly in light of the existing Wolfson class action. This class action addresses alleged abuses of market dominance by Microsoft, and a loss for the tech giant could result in a multi-billion pound payout.
Moreover, Microsoft argues that companies selling only portions of their licenses violate licensing agreements. This information, coupled with the copyright concerns raised, may drastically affect the operational framework for reselling software in the future.
Conclusion
The Competition Appeal Tribunal’s ruling on Microsoft’s copyright claims will be pivotal. A ruling favoring Microsoft may disrupt the secondary software market significantly. Conversely, a ruling against could leave the tech giant responsible for substantial financial compensation, emphasizing the case’s far-reaching consequences.
