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MUMBAI: Software may be intangible, but the fight over who owns it is proving anything but. Microsoft is preparing to take its long-running licensing battle to the UK Supreme Court, reviving a legal debate that has shaped software ownership in Europe for more than a decade.
The technology giant is seeking permission to appeal after losing two successive rulings against UK software reseller ValueLicensing. At the heart of the dispute is whether businesses that purchase perpetual Microsoft software licences are legally entitled to resell or split those licences—a question courts have increasingly answered by relying on a landmark 2012 Oracle judgment.
The case has implications far beyond the companies involved, with the outcome expected to influence Microsoft’s licensing strategy and the wider market for pre-owned enterprise software.
The legal foundations of the dispute were laid in 2012, when the European Court of Justice ruled against Oracle in what became known as the UsedSoft case. Oracle had argued that customers should not be allowed to transfer perpetual software licences after purchase. The court disagreed, holding that a perpetual licence is effectively equivalent to a product sale, meaning software publishers cannot indefinitely control its resale once the initial transaction has been completed.
That decision created the legal basis for Europe’s secondary software market and has continued to shape licensing disputes ever since.
Microsoft entered the same legal territory in 2021, when ValueLicensing accused the company of restricting the resale of perpetual licences while steering customers towards subscription-based products such as Microsoft 365.
According to the reseller, Microsoft’s contractual practices reduced the availability of unused perpetual licences that could otherwise enter the secondary market.
As the litigation progressed, Microsoft argued that reselling or dividing certain software licences amounted to copyright infringement. However, both the Competition Appeal Tribunal and the Court of Appeal rejected that argument, ruling that it did not override the legal principles established by the earlier Oracle decision.
The Court of Appeal also questioned Microsoft’s interpretation, suggesting it could produce inconsistent legal outcomes based on how software is distributed rather than how it is licensed.
Following its latest setback, Microsoft has been granted additional time to prepare an application seeking permission to appeal before the UK Supreme Court. While that process is under way, the tribunal has allowed procedural matters including disclosure and confidentiality issues to continue instead of pausing the litigation.
Microsoft has not publicly commented on its next legal steps.
Although the dispute centres on a £270 million claim, its significance extends well beyond the financial stakes. A final ruling could redefine the rights of businesses buying and selling perpetual software licences, clarify how much control software publishers retain after a sale, and influence how technology companies design future licensing models as the industry continues its shift towards subscription-based software.
