LHR obtains preliminary injunction against software manufacturer for violation of the principle of exhaustion

Arno Lampmann

Photo by Marius Christensen on Unsplash

The Regional Court of Hamburg (LG Hamburg, decision of 1 February 2019, ref. 312 O 452/18) has issued a preliminary injunction against a software company at the request of Lampmann, Haberkamm & Rosenbaum Rechtsanwälte (LHR).

This prohibits the latter from using the following general terms and conditions in licence agreements with German customers for software in the course of business for competitive purposes:

(…) The resale of purchased software to third parties is only permitted if the customer passes it on in full and without retaining copies (including backup copies) and the recipient undertakes in writing to comply with the provisions of these licence conditions. The customer shall immediately provide AAV with a copy of this declaration of commitment

if this is done as shown in Annex LHR 3.

In the event of non-compliance, a fine of up to € 250,000 or up to six months’ imprisonment may be imposed. The amount in dispute was set at € 50,000.

The decision is not legally binding, but was issued without an oral hearing despite the fact that the defendant had filed a protective letter. The latter now has the legal remedy of an objection or clarification of the facts in the main proceedings.

The ban joins a whole series of proceedings that we have brought on behalf of used software dealers against manufacturers who try to obstruct the secondary market for their products by all means:

The Hamburg Regional Court again agreed with our client that the licence condition is inadmissible because it inadmissibly restricts the used software market.

The clause can only be understood by the relevant public to mean that the software or the usage authorisation may only be sold to third parties under certain conditions. However, these are unreasonable, at least with regard to the required written form, and in view of the fact that a simple checkbox is sufficient for the defendant even for the first sale, are obviously aimed solely at making the secondary software market more difficult in practice.

This impairs the competitive development of the applicant, whose business is based, among other things, on the resale of tax software. This is because its customers could get the false impression that the purchase of ‘used’ software or its use by them may not be permitted under the GTC or depends on a written declaration that must also be sent to the defendant and therefore refrain from concluding a contract with it.

This is based on the decision of the ECJ of 3 July 2012, case no. C-128/11, which has attracted a great deal of attention in software trading circles.

Lawyer Arno Lampmann from the law firm LHR:

“The decision of the Hamburg Regional Court is now one of a considerable number of court rulings of this kind and is only logical in view of the European legal situation. Unfortunately, many software manufacturers do not want to recognise the clear requirements of the ECJ and even now, years after the landmark decision, are still trying to circumvent them with – unlawful – clauses in their licence conditions. It is important for software retailers to know that – as this decision shows – they can actively defend themselves against unlawful provisions.”