EU ruling restricts rights to resell back-up copies of software where originals are damaged, destroyed or lost

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Software companies must enable customers that acquire an unlimited licence to use their product to download a copy of that software to replace originals that have been damaged, destroyed or lost, the EU's highest court has ruled.

The right to access a replacement for damaged, destroyed or lost software exists in this way under EU copyright laws, and applies regardless of whether the software was originally supplied digitally or on "material media", such as computer disks, the Court of Justice of the EU (CJEU) ruled.

An initial acquirer of software that is subsequently damaged, destroyed or lost can sell on the replacement copy that they download providing they "make any copy in his possession unusable at the time of its resale", the Court said.

The CJEU ruled, however, that whilst the initial acquirer of software can make their own back up copy of the product to use "in accordance with its intended purpose", they cannot resell the back up software where the original copy has been damaged, destroyed or lost unless they have the consent of the copyright holder.

"Although the initial acquirer of a copy of a computer program accompanied by an unlimited user licence is entitled to resell that copy and his licence to a new acquirer, he may not, however, in the case where the original material medium of the copy that was initially delivered to him has been damaged, destroyed or lost, provide his back-up copy of that program to that new acquirer without the authorisation of the rightholder," the CJEU said in its ruling.

The judgment issued by the CJEU further clarifies a 2012 ruling it issued on the rights to re-sell licensed software.

A court in Latvia had asked the CJEU to consider questions concerning the right of copyright holders to prevent the resale of computer program licences in cases where disks containing the software are damaged and the first purchaser of the software has erased their copy of the software and no longer uses it.

The Latvian court asked for the CJEU's ruling on the issue in the context of criminal proceedings brought against two men in Latvia. The men are charged with unlawfully selling copyright-protected software published by Microsoft.

In 2012 the CJEU ruled that software owners exhaust their rights to control the resale of their copyrighted products after they have sold them within the EU, regardless of whether the sale concerns a physical product or one downloaded from the internet.

It said that, as a result, the original purchaser of software can sell on 'used' copies to others providing they delete any copy they have made for their own use when they make that sale.

The CJEU's judgment was issued on its reading of the EU's Computer Programs Directive. The Directive provides content creators with exclusive rights to control "any form of distribution to the public, including the rental, of the original computer program or of copies thereof". However, that right is 'exhausted' following the "first sale" of a copy of their computer programs under the terms of the Directive "with the exception of the right to control further rental of the program or a copy thereof".

In its latest ruling the Court explained that back-up copies of computer programs can only be made "by a person having a right to use that program" and if the making of the copy is "necessary for that use". It said those principles in EU law must be "interpreted strictly".

"It follows that a back-up copy of a computer program may be made and used only to meet the sole needs of the person having the right to use that program and that, accordingly, that person cannot – even though he may have damaged, destroyed or lost the original material medium – use that copy in order to resell that program to a third party," the CJEU said.

"Consequently … the lawful acquirer of a copy of a computer program accompanied by an unlimited licence for the use of that program, who seeks to resell it, after the exhaustion of the copyright holder’s exclusive distribution rights … cannot, without the authorisation of that rightholder, transfer to the new acquirer the back-up copy of that program made … on the ground that he has damaged, destroyed or lost the original material medium sold to him by or with the consent of that rightholder," it said.

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