Legal Issues What you should look out for when buying pre-owned software

25. July 2019 – Katrin Luther
Katrin Luther, Relicense AG
Katrin Luther, Relicense AG

Companies can sell licences that they no longer need following restructuring, mergers or the decision to move to the cloud. These can then be purchased by new owners at a significantly reduced price in comparison to the original one as so-called pre-owned software. Provided the seller has an unlimited right of used, this process is completely legal and common practice within the EU and Switzerland. However, it’s not just the price that makes licences from the second-hand market so interesting: they are generally somewhat older and thus fully developed versions that are far more reliable than the latest releases. It’s not just companies in the private sector that are taking advantage of these benefits; an increasing number of authorities and other institutions in the public sector that are very careful with data storage in the cloud for compliance reasons are also making use of them.

While there are also individual cases in which licences are sold on directly from company to company, these are highly exceptional for good reason: to be able to really be sure that all legal and formal guidelines have been sufficiently adhered to, pre-owned licences should only be purchased from a provider that specialises in its sector and has long track record of proven expertise, experience and total reliability. Among other things, interested purchasers should make sure that this provider is regularly audited by external audit firms, and above all, that it informs the manufacturer of the respective licences about each transfer.

This check is incredibly important because there are one or two providers running around in the booming pre-owned licences market that don’t take legal conformity quite so seriously. In this respect, interested purchasers should therefore always ask a potential provider to supply complete documentation of the licence history to be able to rule out any eventuality. If you have this history, the proof and the scope of the unlimited right of use, and of course a valid purchase agreement, then the purchase and use of pre-owned software licences is absolutely free from risk.

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