A German court has upheld a decision by a lower court in Munich which banned the resale of used software licenses.

The Appellate Court of Munich ruled last week that the sale of used software licenses to third parties in Germany is illegal, at least in the case of software from Oracle.

Oracle had sued usedSoft GmbH, a Munich company that transferred software license rights to third parties. The software giant said it was very pleased with the ruling.

In 2000, a German Federal Supreme Court decided that a manufacturer's "first sale" of a license for software on tangible media (such as a CD ROM or DVD) subsequently limits the manufacturer's right to restrict the resale of the media with the software under certain preconditions. That prompted a thriving business of used software licenses, which were often used to create new copies via illegal downloads.

Now, a legal basis for this business model no longer exists, Oracle says. Although usedSoft has posted the ruling on its website, it hasn't made clear if it is going to appeal. ®