Microsoft loses bid to ban license reselling as UK court gives it the thumbs up

• UK tribunal throws out Microsoft’s arguments against ValueLicensing
• ValueLicensing intends to seek £270 million from Microsoft
• Microsoft says it will appeal the decision

The UK Competition Appeal Tribunal has ruled Microsoft cannot block customers from reselling perpetual software licenses, marking the end of a years-long debate.

The debate started in 2021, when ValueLicensing sought £270 million on the basis that Microsoft used contracts to prevent license reselling - and despite the latter arguing that reselling licenses infringed copyright, the company failed to get its way.

The Tribunal found Enterprise Agreements ultimately create multiple licenses, not a single multi-user license, therefore no subdivision would need to take place for licenses to be resold.

Microsoft lost its license reselling case

Given that Microsoft’s distribution and reproduction rights do not prevent the resale of portions of bulk licenses, the Tribunal found the resale lawful.

ValueLicensing also notes that, from about 2011, Microsoft shifted perpetual license customers to its Microsoft 365 subscription, requiring customers (like ValueLicensing) to surrender or retain perpetual licenses they no longer required.

Argument number two relates to Office and Windows including copyrighted non-program elements (like icons, fonts, clip art, and resource/help files). The Tribunal found that buyers purchase Microsoft’s software as computer programs, not as collections of artistic work, and therefore Microsoft lost this battle too.

The Tribunal “unanimous[ly]” ruled against Microsoft on both issues.

“ValueLicensing has always believed it was running a legitimate business underpinned by the principles of the European Software Directive and the UsedSoft judgment at the ECJ,” ValueLicensing Managing Director Jonathan Horley stated (via The Register).

“Now these preliminary issues have been decided, we look forward to continuing the claim against Microsoft.”

Microsoft told The Register it disagrees with the decision, and intends to appeal.

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