OEM-Software and the law

An OEM software version that is sold alongside hardware (such as a new PC) cannot be restricted to a single distribution channel for the buyer. The buyer can resell the software through another distribution channel because, under the exhaustion principle, every buyer is entitled to resell a product that was previously purchased (in the European Union) with the agreement of the originator based on the exhaustion principle, which states that the producer’s right of sale is exhausted after the initial market placement.

In regards to the use of OEM-software, the Federal Supreme Court of Justice (BGH) decided the use of the software and reselling of such software, in a case involving the passing on of OEM-software on July 6, 2000, in response to a lawsuit filed by software producer Microsoft®.

Anyone who purchased the original software and hardware as an OEM version has the right to resell the software. When selling the package of hardware and software, he/she/they can unbundle it in this way. Additional individual restrictions on contractual agreements between buyer and producer are the sole possibilities.

As a result, the producer can only profit once from the sale of their goods. This decision applies not only to OEM software products, but also to the sale of pre-owned software licenses, which was not limited to hardware sales.Trials by software companies to impose contractual restrictions on the sale of used software licenses are thus generally invalid, not just for OEM products.