Reselling Used Apps?

In a recent decision, the Court of Justice of the European Union (CJEU) held that the resale of used software generally cannot be excluded in licence terms. The judgment, which aimed at the resale of used business software, may also affect the app market.

Smartphone and tablet users are used to all these little helpers easing their lives. Whether used to update the family photo album, to escape "real life" by playing some fun computer games or to read and revise documents for work, apps have become an integral part of our "smart" world.

What if a user does not want to use an app anymore?

Once purchased, apps usually cannot be returned for a refund. However, one could consider selling it to someone who would be happy to use it for a reduced price. Given the usually low purchase prices of apps, this might not be a realistic scenario.

But what about platform switchers? If someone intends to give up his iPad and switch to an Android- or Windows-based tablet, he might indeed be interested in receiving at least some money for selling the comprehensive collection of apps purchased over the years. This brings up various questions about the legal admissibility and technical feasibility of such used-app sales.

Recent CJEU case

While it was long unclear whether licence terms could forbid the resale of used software, the CJEU recently (case C-128/11, UsedSoft v Oracle) provided guidance on whether and under what conditions the resale of used software licences could be prevented by the rightholders of the software copyright. The CJEU held that the principle of exhaustion of rights (Erschöpfung) is also generally applicable to purchased downloaded software. Article 4 (2) of the Computer Program Directive stipulates, "The first sale in the Community of a copy of a programme by the rightholder or with his consent shall exhaust the distribution right within the Community of that copy, with the exception of the right to control further rental of the program or a copy thereof".

Exhaustion of rights thus principally means that the developer/seller of software (or any other copyright protected work) cannot have any further influence on the "fate" of one specific copy of the software once it has been sold to an end-user. Previously (at least according to the Austrian approach) the principle of exhaustion was only applicable to physical copies of the software (Werkstücke), such as a DVD with a copy of the software on it.

But the CJEU...