The defendant in the interlocutory injunction proceeding had bought software licences from the software manufacturer’s licensees (»Primary Purchasers«) and had sold such licences to its clients (»Secondary Purchasers«). The District Court Munich considered this business model as unlawful, arguing that the sale of the software licences to the Secondary Purchasers breached the copyright of the software manufacturer if the trade was not limited to the resale of reproduced software which had been put on the market by the manufacturer. The defendant transferred the licences without changing the data carrier. The defendant confined itself to sell software licences to Secondary Purchasers who already had the software itself, but needed additional licences. Secondary Purchasers who did not have the software were asked by the defendant to download the software from the manufacturer’s homepage.
The District Court Munich considered this procedure as a breach of law, because it violated the manufacturer’s copyright in the software as well as the manufacturer’s exclusive reproduction right. The court considered the request to download software from the manufacturer’s homepage and respectively to store the software in the main storage of the user’s computer as unlawful. In the opinion of the court, both actions were part of the exclusive reproduction right of the manufacturer.
In the context of its decision, the court made it clear that the defendant could not provide the Secondary Purchasers of the software with the user rights in the software because it was impossible for the Primary Purchasers of the software to transfer the user rights given by the manufacturer to the defendant because the First Purchasers only get simple, non-assignable user rights. According to the opinion of the court, such a limitation of the user right is possible and binding towards third parties.
In addition, the court stated that the defendant could not rely on the exhaustion of rights principle. This principle is only applicable if the software is distributed on a physical storage device (e.g., a CD), but not where non-embodied software licences are sold.