Publication

VILGERTS’ Senior Partner Ineta Krodere delivered a presentation at the 12th AIPPI Baltics conference ‘IP Rights, Globalization and New Technologies’. The presentation focused on Ranks & Vasilevics case (C-166/15) and most recent CJEU developments on resale of used software.

There has been notable development of exhaustion of rights since adoption of Directive 91/250/EEC, which was followed by the Directive 2001/29/EC and later on by Directive 2009/24/EC and the ground-breaking UsedSoft v Oracle case before the CJEU.

Oracle is a developer of computer software and in 85% of cases software was made available by downloading from internet. UsedSoft marketed used software licences, including user licences for the Oracle computer programs at issue. Oracle brought an action against UsedSoft in Germany, where the Federal Court referred questions to the CJEU.

In the UsedSoft v Oracle case, the CJEU established five criteria for exhaustion of distribution rights. Although the findings of the CJEU were not completely in favour of Oracle, nevertheless the burden of proof was upon the reseller and it the main proceedings UsedSoft could not satisfy the criteria established by the CJEU.

As the Federal Court concluded, the burden of proof and rendering evidence for meeting the CJEU’s conditions was with UsedSoft, as the doctrine of exhaustion was an exception to copyright protection rule invoked by UsedSoft.

The most recent development of exhaustion of rights of computer programs was regarding sale of “back-up” copies, which was an issue addressed by the CJEU in Ranks and Vasilevics case C-166/15.

In Ranks and Vasilevics case, which was a criminal case dating back to years 2001- 2004, the accused were selling counterfeit copies of Microsoft production, while advertising them as “new” and “genuine” products. Initially, their line of defence was selling of rights to use the software, then exhaustion of distribution rights and then 4 years later selling of back-up copies.

The CJEU once again reaffirmed conclusions drawn in the UsedSoft v Oracle case, additionally the CJEU held that “back-up” copies of computer programs do not exhaust. Accordingly, it must be emphasized that the position of the EU Law is strict and sound, providing that the burden of proof for satisfaction of all five criteria set forth by the CJEU in Oracle v UsedSoft case rests with the reseller.