back to article Software company says it can still resell Microsoft licences

The founder of a company set up to re-sell Microsoft software licences claims he will still be able to do so, despite changes made by Microsoft to its software licences which appear to be designed to stop the re-sale. Discount-Licensing.com has been in business since 2005 and buys used licences, often from company liquidations …

COMMENTS

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  1. Anonymous Coward
    Thumb Down

    "No resale" clauses should be illegal

    Surely in any capitalist economy it should be illegal to include a "no resale" clause for anything? Imagine if car companies did that, or even worse - house developers. Once you've bought it, you can't ever transfer it to anyone else? Sounds like the stupidest idea ever.

    Methinks someone needs to complain about this to the EU.

  2. Cody

    Selling versus licensing

    I'm curious whether it has ever been formally held in court that you have licensed rather than sold, and about post sale restrictions on use. Does anyone here have hard evidence of the legal position?

    If, for instance, you entered into an agreement with B&Q that you'd take 100 drills, but with a 'license' that forbade their subsequent sale through third party resellers, would that hold up in court? Is this not simply a post sale restriction on use of the kind the EC has always held to be unlawful and so not binding?

    And whatever the various agreements say, isn't it in fact a sale of so many seats that you buy? So you've actually bought your copies, or right to make a certain number of them, and surely under EC competition and consumer law, you can resell those purchases like any other property? The manufacturer of products surely loses all rights to control what you do with stuff after he sells it to you? He can of course withdraw support and warranty. But he surely cannot tell you what to do with it or who you can sell it to, or who they can sell it to?

    Anyone have a proper authoritative legal opinion on this?

  3. Mark

    This is why it's a contract not a license

    You don't need a license to sell a copyrighted work on because you aren't making copies.

    That the EULA says you can't means that it is a contract and not a license.

    And you need some "consideration" and "a meeting of minds" to make a contract stick.

    So where's the consideration for agreeing? Are the licenses cheaper since they brought in the change?? If your software doesn't transfer, it loses its value immediately, rather than depreciate (you don't deperceiate the cost of catering), but as far as I can recall, the taxman won't let you draw down your tax burden like that.

  4. herman Silver badge

    Depends on laws of your state

    This is why it is always good to consult a lawyer. In many states the restrictions are unenforceable.

  5. Anonymous Coward
    Anonymous Coward

    Re: "No resale" clauses should be illegal

    Or, if you don't like the terms, you could buy something else...

  6. Anonymous Coward
    Anonymous Coward

    Definitive legal opinion

    Definitive legal opinion might vary from jurisdiction to jurisdiction.

    Anywhere that did have a definitive legal precedent would (if they were sensible) be extremely unlikely to set it in favour of MS's interpretation of commercial law.

    Therefore MS generally aren't going to let it go to court and have a preceedent set against them.

    Therefore there isn't generally a definitive legal opinion.

    Also there's a difference between boxed product and schemes like Select.

    There's at least one very fine website out there on the theme of "sold not licenced" but I didn't save a pointer and can't find it right now... prompt, anyone?

  7. Hayden Clark Silver badge
    Gates Horns

    Balance sheet

    If you are unable to realise the value of an asset - it ceases to be an asset. In other words, as soon as you buy MS software, the book value is £0. Therefore all expenditure on Microsoft licences will need to be from the P&L (revenue) books, not the balance sheet (capital). Having a new version of Office, rolled out across the company, all realised off this quarter's bottom line should concentrate a few minds.

    IANAA.

  8. Dunstan Vavasour
    Boffin

    Copying.

    This all comes back to the issue of copying. Specifically, while the CDs with software on are goods which can be bought and sold, doing anything with them involves an act of copying from the CD to a computer (even if this only a transient copy in the system's memory). As the copyright holder, they can attach whatever conditions they want to this act of copying (in the same way as the GPL attaches enduring freedom conditions to the copying of GPL's software). But while the GPL only attaches conditions when you *distribute* copies, most proprietary EULAs attach conditions to the copying from the CD to your machine.

  9. Mark

    Re: Re: "No resale" clauses should be illegal

    That's the unique problem of closed source software, though. Computers MUST interoperate. If they can't talk to each other, they it's just a glorified PDA. And when software is a secret, you can't interoperate unless you undertake the expensive and lengthy task of reverse engineering. And patents squash that (without making reverse engineering redundant, which is kind of what patents should be doing: removing the need to reverse engineer).

    So if your company has to accept Word2000 documents, it must be running Windows. If your management are using exchange, you must use Windows. In short, you can't go somewhere else.

    And in any case, such a postori clause is shaky anyway and as I said earlier, such a clause is contractual and there's no consideration or quid-pro-quo to make it a meeting of minds (a requirement for a contract to be binding).

  10. Mark
    Stop

    Re: Copying.

    Yup, so I delete the copy and pass on the CD to another for some money.

    I no longer NEED the license, so breach of license is irrelevant. That's why it's a license: without it you can't do what it let you. E.g. Fishing license: you aren't sued for breaking the fishing license, you lose the license and fishing thereafter is punished because you're fishing without a license. Well if I'm not using the software, the End USER License Agreement isn't needed so feel free to ban me from installing it after I've sold the CD.

    So they can put whatever restriction they like but when I no longer need the license, I no longer need to abide by the terms. So I can sell it on. Selling isn't copyright infringement.

    PS the berne convention proscribes copyright control from limiting copying required as a part of using the product (else DVD players would have problems, since they keep the keyframes [a copy] while they add the changes required by the I-frames).

    Try using Vista without installing it to disk...

  11. Anonymous Coward
    Anonymous Coward

    suck it up

    Don't like thier abusive behaviour? Then don't buy their crappy software. Or shut up.

  12. A J Stiles
    Stop

    Not Microsoft's decision to make

    There is a little thing called "the Doctrine of Exhaustion of Rights", which prevents Microsoft from stopping you selling on a licence. Basically, once you have bought something, what you do with it next is none of the business of the person who sold it to you and whose property it no longer is (unless you *make* it their business, e.g. by throwing it through their window or retaining copies which infringe copyright).

    A licence is only required for acts (such as making copies above and beyond Fair Dealing; note also that any copy that is inevitably made in the course of using software for its Rightful Purpose would *not* infringe copyright) which the Law of the Land ordinarily forbids.

    But re-selling a piece of software is *permitted* by the Law of the Land. And that's sacrosanct.

    Therefore, just because Microsoft's licence does not deign to permit you to re-sell the software, is irrelevant; because *you* *do* *not* *need* *permission* *from* *Microsoft* to sell it.

  13. James Pickett
    Gates Horns

    Consequential losses

    If MS still insists it has control/rights over the software, then they might like to consider their responsibility towards failure of same. I often waste time dealing with crashes of Office, to which the official MS web response is 'we recommend upgrading' (i.e. our old crap doesn't work, so why not buy our new crap?). If this were costed properly and MS insisted on its continued involvement, then they would soon be out of business. They should put up or shut up.

    BTW, have they paid their EU fine yet?

  14. JimP
    Coat

    Not only but also

    In the case of second hand ex-corporate equipment, if the corporation licenses windows with a Select style agreement and never runs the OEM version of windows pre-installed on the machine it means they are running a different copy (possibly even version) of windows, and the pre-installed one has never had its EULA clicked on or agreed to. The issue of what is in the EULA of that copy is somewhat irrelevant to the organisation which sells it, as they have not agreed to anything about licensing it and were not given an opportunity to avoid buying it when they purchased the hardware. Sounds like a debatable plus point to bundled OS sales from the perspective of someone who buys an ex corporate PC with a license sticker on it to me, and I can't see why that unused license pack couldn't be sold on to be used on another machine (from the same manufacturer in the case of the OEM version). If there is a reason why then there needs to be a law to sort that out.

  15. DR

    licensed not sold

    If MS software is really licensed not sold then it should be perfectly legal to download copies after the original disc is lost/scratched/broken.

    after all you only pay for the serial number, which is a license to use the product.

    try phoning microsoft and saying you've lost your install disc, can they send you another... (the cost should be what 12p for the disc + P&P?).

    if you buy the license disc et al then it should be perfectly OK to sell the goods you buy. after all you rarely buy goods for your exclusive use on an exclusive computer... you're allowed to transfer the license from one PC to another after you upgrade...

    You can transfer a license between individuals when someone leaves they don't take the license with them...

    if your company was bought licenses could travel with assets.

    in this case all that's happening is as a company that's in trouble is selling it's assets, this should be perfectly acceptable, and as long as it helps MS maintain business monopoly I can't see why they are so fussed about it.

  16. Anonymous Coward
    Anonymous Coward

    @DR

    I believe you can get hold of copies of MS software for the charge of the media, if you can prove that you previously owned another version and it no-longer works. Not having done it myself, I'd imagine that you would be sent to your initial supplier/the OEM first, though.

    I do know that the standard MS media charge is about £15 for a DVD, because I get Office on the home use programe via my employer and this was £15 which was to cover the post, packing, media etc.

  17. Ed

    In the states...

    ...this may not work. There's possible conflict with the doctrine of first sale.

    http://en.wikipedia.org/wiki/Softman_v._Adobe

  18. jay margo
    Coat

    Software licenses have never made legal sense to me.

    Marge Simpson got a letter from the school once that said something like: "By reading this letter aloud you agree that you won't hold the school responsible..."

    I think of this everytime I "agree" to a license. By opening a sealed envelope I'm entering into a legally binding contract? By clicking something I'm signing something? I'm just the temporary hire consultant, my agreeing to something is binding on the company that has hired me? For years after I'm long gone?

    And when a software company sues, years after the installation, for some kind of violation of the agreement, who made the initial agreement? At least with a signature, one could reasonably say that the contract was entered into by a particular responsible person. When the license agreement is executed by opening an envelope or clicking a screen button, how do they know who did that and how [and who] do they sue accordingly?

    Mine's the one with the legal papers in the pocket.

  19. Charles Manning

    The Burrito License

    Whether you wish to call it a licence or a contract is largely pointless- ultimately we have some sort of agreement between two parties.

    Imagine there being a Burrito License that said that on any day you used the software you would be required to eat a burrito. You'd have an agreement and any day you did not eat a burrito you'd not be allowed to use the software.

    That there was no signature does not invalidate the agreement. If you enter a pub with conditions of entry (dress, age, behaviour ...) then you don't sign anything or get the pub owner's signature. He can sell you a pint and immediately turf you out before you even drink the pint.

    So if you enter into an agreement with MS you get to agree to the terms and conditions. If you really don't want to enter the agreement, then don't: take your computing needs elsewhere.

    I dislike MS's methods as much as anyone, but dislike is not a valid reason to be irrational.

  20. JC

    At any rate

    Even if MS's EULA change was enforcible, it wouldn't apply to (most of these) previously purchased licenses, only those bought after the EULA change. Even the mighty MS can't change the terms of a license after it's been bought and agreed to.

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