Microsoft Seeks UK Supreme Court Review in Pre-Owned Software License Battle

Microsoft is asking the UK Supreme Court for permission to appeal a string of legal defeats over the resale of pre-owned software licenses, pursuing its last available route to overturn rulings that have validated the secondary license market.

The Court of Appeal dismissed Microsoft's challenge on July 7, 2026, upholding a Competition Appeal Tribunal decision that ValueLicensing's business model—reselling and subdividing perpetual licenses—does not infringe copyright. An extended stay of proceedings was granted on July 21 while Microsoft pursues its Supreme Court application.

The Core Legal Fight

ValueLicensing sued Microsoft in 2021 for £270 million, alleging the company illegally restricted the market for pre-owned on-premise software licenses. The case hinges on the 'exhaustion of rights' doctrine established by the 2012 EU UsedSoft ruling, which holds that the first sale of a software license exhausts the copyright holder's control over its resale.

Microsoft attempted to circumvent UsedSoft by arguing that Microsoft Office contains non-software creative elements—icons and clip art—that place it under the Copyright and Information Society Directive rather than software licensing rules. The Court of Appeal rejected this reasoning, noting it would mean 'all that was necessary to avoid the effect of UsedSoft would be to incorporate some icons or clip art with the program.'

The court also dismissed Microsoft's argument that volume licenses cannot be subdivided for resale.

What Happens Next

While the main proceedings remain stayed pending the Supreme Court's decision on whether to hear the appeal, some aspects of the case continue moving forward. ValueLicensing secured partial progress on disclosure and confidentiality applications.

'We are pleased a full stay of the proceedings hasn't been granted and we can progress the outstanding applications on further disclosure and confidentiality,' said Jonathan Horley, ValueLicensing's boss.

Stakes Keep Rising

A final defeat for Microsoft would cement the legality of reselling perpetual licenses in the UK and could trigger massive payouts beyond the £270 million ValueLicensing claim. A separate collective action led by Alex Wolfson, filed in May 2025, seeks a multibillion-pound payout that would dwarf the original case.

The outcome carries industry-wide implications. A loss for Microsoft could accelerate the software industry's shift toward subscription-only SaaS models, which avoid exhaustion-of-rights liabilities by never selling perpetual licenses in the first place.

The Supreme Court has not yet announced when it will decide whether to grant Microsoft permission to appeal.