“9. As this part of the directive is based on French law, I think that one is entitled to look at French law for guidance, or confirmation, as to what it means. Article 12 of the French law says that the agent is entitled to “une indemnité compensatrice en réparation du préjudice subi”
“...it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better.”
“Where the Court does decide to 'grasp the nettle' and finally decide a point of law, then it must follow that the Court decides the issue on the balance of probabilities rather than simply on the basis of whether the applicant has a real as opposed to a fanciful prospect of success.”
“The correct approach on applications by defendants is, in my judgment, as follows: i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success: Swain v Hillman[2001] 2 All ER 91 ; ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8] iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10] v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 ; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 ; vii )On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .”
“‘commercial agent’” means a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the ‘principal’), or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal…”
“(1) Where a copy of computer software is supplied to a principal's customers electronically, and not on any tangible medium, does it constitute ‘goods’ within the meaning of that term as it appears in the definition of a commercial agent in article 1(2) of [the Directive]? “(2) Where computer software is supplied to a principal's customers by way of the grant to the customer of a perpetual licence to use a copy of the computer software, does that constitute a ‘sale of goods’ within the meaning of that term as it appears in the definition of commercial agent in article 1(2) of the Directive?”
“must be given an autonomous and uniform interpretation throughout the European Union, in the light of the need for the uniform application of EU law in conjunction with the principle of equality. That concept therefore constitutes an autonomous concept of EU law and its scope cannot be determined by reference either to concepts known to the laws of the member states or to classifications made at national level.”
“… it must be determined whether the concept of “sale of goods” in article 1(2) of Directive 86/653 can cover the supply, in return for payment of a fee, of computer software to a customer by electronic means where that supply is accompanied by the grant of a perpetuallicence to use that software”
“40. In the second place, according to a commonly accepted definition, a “sale” is an agreement by which a person, in return for payment, transfers to another person his rights of ownership in an item of tangible or intangible property belonging to him (Usedsoft GmbH v Oracle International Corpn, para 42). 41. In the particular case of the sale of a copy of computer software, the court has held that the downloading of a copy of a computer program and the conclusion of a user licence agreement for that copy form an indivisible whole. Downloading a copy of such a program is pointless if the copy cannot be used by its possessor. Those two operations must therefore be examined as a whole for the purposes of their legal classification (see, to that effect, Usedsoft GmbH v Oracle International Corpn, para 44). 42. Accordingly, the court has taken the view that the making available of a copy of computer software by means of a download and the conclusion of a user licence agreement for that copy, intended to make the copy usable by the customer, permanently, and in return for payment of a fee designed to enable the copyright holder to obtain a remuneration corresponding to the economic value of the copy of the work of which it is the proprietor, involve the transfer of the right of ownership of that copy (see, to that effect, Usedsoft GmbH v Oracle International Corpn, paras 45 and 46). 43. Consequently, in the light of the wording of article 1(2) of Directive 86/653, it must be held that the supply, in return for payment of a fee, of computer software to a customer by electronic means where that supply is accompanied by the grant of a perpetual licence to use that software can be covered by the concept of “sale of goods” within the meaning of that provision”
“It follows from all of the foregoing considerations that the answer to the questions referred is that the concept of “sale of goods” referred to in article 1(2) of Directive 86/653 must be interpreted as meaning that it can cover the supply, in return for payment of a fee, of computer software to a customer by electronic means where that supply is accompanied by the grant of a perpetual licence to use that software”
“42. According to a commonly accepted definition, a ‘sale’ is an agreement by which a person, in return for payment, transfers to another person his rights of ownership in an item of tangible or intangible property belonging to him. It follows that the commercial transaction giving rise, in accordance with Article 4(2) of Directive 2009/24, to exhaustion of the right of distribution of a copy of a computer program must involve a transfer of the right of ownership in that copy. 43. Oracle submits that it does not sell copies of its computer programs at issue in the main proceedings. It says that it makes available to its customers, free of charge, on its website a copy of the program concerned, and they can download that copy. The copy thus downloaded may not, however, be used by the customers unless they have concluded a user licence agreement with Oracle. Such a licence gives Oracle’s customers a non-exclusive and non-transferable user right for an unlimited period for that program. Oracle submits that neither the making available of a copy free of charge nor the conclusion of the user licence agreement involves a transfer of the right of ownership of that copy. 44. In this respect, it must be observed that the downloading of a copy of a computer program and the conclusion of a user licence agreement for that copy form an indivisible whole. Downloading a copy of a computer program is pointless if the copy cannot be used by its possessor. Those two operations must therefore be examined as a whole for the purposes of their legal classification (see, by analogy, Joined Cases C-145/08 and C-149/08 Club Hotel Loutraki and Others[2010] ECR I-4165 , paragraphs 48 and 49 and the case-law cited). 45. As regards the question whether, in a situation such as that at issue in the main proceedings, the commercial transactions concerned involve a transfer of the right of ownership of the copy of the computer program, it must be stated that, according to the order for reference, a customer of Oracle who downloads the copy of the program and concludes with that company a user licence agreement relating to that copy receives, in return for payment of a fee, a right to use that copy for an unlimited period. The making available by Oracle of a copy of its computer program and the conclusion of a user licence agreement for that copy are thus intended to make the copy usable by the customer, permanently, in return for payment of a fee designed to enable the copyright holder to obtain a remuneration corresponding to the economic value of the copy of the work of which it is the proprietor 46. In those circumstances, the operations mentioned in paragraph 44 above, examined as a whole, involve the transfer of the right of ownership of the copy of the computer program in question”
“the making available for use, for a limited period of time and for profit-making purposes, of a computer program or a copy thereof.”
“[The decision in Usedsoft] has resulted in advice to legal advisors advising their clients to switch to subscription or cloud-based business models which avoid the transfer of ownership as a result of sale and are more akin to the rental of computer programs. The Computer Software Directive specifically excludes the application of the exhaustion right to the rental of computer programs.”
“To appreciate fully the potential ramifications of UsedSoft it is therefore perhaps also highly beneficial to consider how players “on the ground” are currently reacting. This is arguably best done by examining reactions to the decision found in legal advice memos posted by commercial law firms and reports of the case in the commercial press. The most common advice given to copyright proprietors by such services was to switch to subscription based or, ideally, cloud and Software as a Service (“SaaS”) based business models. Such sources were keenly aware of the Court’s focus on exhaustion taking place where ownership is permanently transferred as the result of a sale. All sources explained that where media is provided over the cloud it is accessed purely over the internet: neither files nor ownership change hands, pulling the principle rug out from under the Court’s feet. That this approach is probably a legitimate exception to the UsedSoft ruling has been confirmed by articles in numerous academic journals ...”
“I re-iterate that licences auto-renewed unless terminated by either party. In practice, and prior to LivePerson terminating the MPA, the vast majority of customers allowed the licences to auto-renew, treating them as effectively unlimited.”
“ancillary professional services” and a “turnkey service” where the Defendant would operate LiveEngage on behalf of the customer. However, these are optional services which customers can only use once they have purchased the underlying “good” which is the LiveEngage computer software. (c) Secondly, the CJEU was clear that “sale of goods” is an autonomous concept of EU law, the meaning of which has a purposive dimension: see paragraphs 30-31. In particular, the CJEUnoted that the effectiveness of the Directive would be undermined if the “supply, in return for payment of a fee, of computer software by electronic means” were excluded from its scope: see paragraphs 43, 49-50. Similarly, AG Tanchev, whose Opinion was followed by the CJEU, supported interpreting the phrase in a way that would minimise regulatory arbitrage. He noted, at paragraph 87 of his opinion, that if the grant of a licence in exchange for remuneration were not considered a ‘sale’ for the purposes of the Directive, then principals could avoid their obligations under the Directive by labelling any sale as the grant of a licence. In this regard, he said: “This interpretation is also consistent with the objectives of Directive 86/653. In particular, in light of the judgment in UsedSoft, it should be considered that a broad interpretation of ‘sale’ in Article 1(2) of Directive 86/653 is in line with the objective pursued by that directive to protect commercial agents in their relations with their principals (see point 43 of this Opinion). Any other solution would undermine that objective by allowing a principal to evade the mandatory provisions of Directive 86/653 simply by calling the agreement with his customer a ‘licence’ rather than a ‘sale’. In addition, it would be likely to deprive a large number of commercial agents of the protection afforded by Directive 86/653, given that computer software is generally marketed through licences.” (d) The same applies here: to find, as the Defendant contends, that LiveEngage is not a “good”, would mean that principals could avoid their obligations under the Regulations simply by making software accessible via cloud computing rather than direct download. (e) Thirdly, in Software Incubator, the relevant software was sold pursuant to licences which laid down a number of restrictions on a customer’s ability to use the software, and which were not always perpetual. If a customer breached their obligations under the licence, the seller could force them to delete the software from their computer. Despite this, the CJEU found that the purchase of a conditional, revocable, licence was compatible with the concept of the “sale of goods”