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EU Court Nixes Sales|of Software Backups

(CN) - Computer users can sell their licenses to programs to other people but not the backup version in cases where the original becomes lost, damaged or inoperable, Europe's highest court ruled Wednesday.

The ruling stems from criminal proceedings against two Latvians charged with selling various copyrighted Microsoft software, including Windows and the Office Suite. The men are suspected of having sold more than 3,000 copies of programs online, damaging Microsoft to the tune of nearly $300,000.

However, the Latvian criminal court questioned whether EU law's rule of exhaustion allows someone who acquires a backup copy of a computer program not stored on the original media may resell the copy in cases whether the original purchaser has either stopped using the program or it has become damaged.

On referral from the Latvian court, the European Court of Justice ruled Wednesday that software companies that sell programs on CD-ROM or DVD-ROM with an unlimited user license can no longer oppose subsequent resale of the programs to another user without contractual language barring such a transfer.

However, the questions of the case concern the sale of backup copies on non-original media. In that regard, the Luxembourg-based court said that only the person who makes the backup from original media can use the backup and cannot sell it to another person.

"Although the initial acquirer of a copy of a computer program accompanied by an unlimited user license is entitled to resell that copy and his license to a new acquirer, he may not - in the case where the original material medium of the copy was initially delivered to him has been damaged, destroyed or lost - provide his backup copy of that program to the new acquirer without the authorization of the rightholder," the high court wrote in its 6-page opinion.

The European Court of Justice's opinion is binding on the Latvian court, which must handle the criminal proceedings against the men with the high court's decision in mind.

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