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ECJ confirms AG's opinion that perpetual licence of software is a "sale of goods" for the purposes of the Commercial Agents Directive

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In an article published earlier this year we reported on the AG's opinion that a perpetual licence of software is a "sale of goods" for the purposes of the Council Directive 86/653/EEC (the "Commercial Agents Directive").

The opinion was given in relation to the case The Software Incubator Ltd v Computer Associates UK Ltd, within which the AG proposed to the European Court of Justice (the "ECJ") that:

  1. a copy of computer software does constitute "goods" within the meaning of the Commercial Agents Directive; and
  2. computer software which is supplied by way of a grant to the customer of a perpetual licence does constitute a "sale" within the meaning of the Commercial Agents Directive.

The ECJ has now confirmed the AG's opinion. On 16 September 2021, the EU's top court ruled that software supplied to consumers electronically does count as a "sale of goods" where that supply is accompanied by the grant of a perpetual licence to use that software.

This decision will not only have significant implications for the Supreme Court's final ruling in The Software Incubator Ltd v Computer Associates UK Ltd, but also for self-employed agents supplying software who will likely have newfound protection under the Commercial Agents Directive.

With special thanks to trainee Kristina Holm for her contribution to this blog.

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