GERMAN COPYRIGHT LAW – SOFTWARE RESALE (DETAILED EXPLANATION)
1. LEGAL FRAMEWORK
§ 69c No. 3 Sentence 2 UrhG (German Copyright Act):
The distribution right of a computer program copy is exhausted when the copy is first sold within the
EU/EEA with the consent of the copyright holder.
§ 17(2) UrhG:
Once a copyrighted product is placed on the market in the EU/EEA with the consent of the author,
the distribution right is exhausted.
Meaning:
After the first lawful sale, the copyright holder cannot control further resale of that specific copy.
-----------------------------------------------------------2. IMPORTANT COURT DECISION
UsedSoft GmbH v Oracle International Corp (C-128/11):
Key rulings:
- Software downloaded from the internet can be resold.
- A licence qualifies as a sale if it is granted for an unlimited period.
- The original purchaser must stop using the software.
- The buyer of a used licence acquires a lawful right to use it.
This case confirms that digital software can fall under exhaustion, unlike many other digital goods.
-----------------------------------------------------------3. HOW THE LAW WORKS (M → B → C MODEL)
M (Manufacturer / Developer):
Creates software and sells it.
B (First Buyer):
Receives the software legally.
C (Second Buyer):
Buys the software from B.
Legal effect:
- M cannot stop B from reselling to C.
- C gets a valid licence.
- M’s distribution right over that copy is exhausted.
-----------------------------------------------------------4. CONDITIONS FOR LEGAL RESALE
Resale is allowed only if:
- The software was lawfully acquired.
- The licence is permanent (not time-limited).
- The original user deletes or stops using the software.
- No additional copies are created.
-----------------------------------------------------------5. WHEN RESALE IS NOT ALLOWED
- Subscription-based software (e.g., monthly payment models)
- SaaS (Software as a Service)
- Trial or temporary licences
- Cases where duplication occurs
-----------------------------------------------------------6. WHY THIS LAW EXISTS (LEGAL PURPOSE)
The exhaustion principle ensures:
1. Ownership Rights:
Buyers truly own what they purchase.
2. Free Market:
Products can circulate freely after first sale.
3. Prevention of Monopoly:
Companies cannot control products indefinitely.
-----------------------------------------------------------7. ARGUMENTS AGAINST THE LAW
- Digital goods are easily copied.
- Companies lose control over pricing and distribution.
- Modern business models rely on subscriptions.
-----------------------------------------------------------8. IS THE LAW MANDATORY?
YES – within Germany and the EU:
- Applies automatically to transactions within jurisdiction.
- Cannot be overridden by private contracts.
NO – globally:
- Other countries may follow different rules.
- Example: United States has different treatment for digital resale.
-----------------------------------------------------------9. FINAL CONCLUSION
The German exhaustion principle allows resale of software under strict conditions.
It balances the rights of developers and the freedom of the market.
In my view:
The law should be mandatory within its jurisdiction because it protects ownership,
supports fair competition, and prevents excessive control by copyright holders,
while still requiring safeguards against misuse.
------------------------------------------------------------