True Software Re-Harvesting in 2021: What does it mean in the post-Brexit era?

By Luke Burywood

In 2012, the European Union (EU) ruled that a software license legally can be treated like any other good, so long as the license was perpetually owned (I.e., not on a subscription). The analogy we often tell customers is if you run a business where you owned a fleet of vehicles, when the time came to upgrade, what would you do with the old vehicles? Leave them to rust? Of course not. You would sell them on as they still hold value. So why should a software license be any different?

Working alongside partners, we at EasySAM have helped our customers make back £1,000,000+ from re-selling old software.

An example of where we see this in the real world is where a customer moves to Office 365. All their old Office Professional Plus Licenses still hold value, and in a lot of cases this can be a sizeable figure.

On the 31st December 2020, the United Kingdom (UK) formally left the European Union (EU).  A withdrawal agreement (‘Treaty’) was agreed, and the following summarises the key facts concerning how that Treaty affects the trade of pre-owned software transactions between the UK and the EU:

  1. The Treaty has no historical impact on previous pre-owned software transactions made between the UK and the EU, on or before the 31st December 2020;
  2. The Brexit Treaty does not retrospectively have any impact on pre-owned software licences originally ‘put into use’ in the UK on or before the 31st December 2020.  Therefore, software licences first ‘put into use’, on or before the 31st December 2020, can still continue to be resold to the EU, on or after the 1st January 2021;
  3. Software licences that are first ‘put into use’ in the EU, on or after the 1st January 2021, can still be resold to the UK.  During 2020, the UK Government enshrined in law that it will continue to recognise the ‘Exhaustion of Rights’ principle, whereby pre-owned software originally ‘put into use’ within the EU, can flow freely from the EU to the UK:

Intellectual property rights which were exhausted both in the Union (EU) and in the United Kingdom before the end of the transition period under the conditions provided for by Union law shall remain exhausted both in the Union (EU) and in the United Kingdom

Article 61 of the “Transition Agreement” [Treaty Series No. 3 (2020) Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community].

  1. Whilst a Treaty was agreed, it did not specifically address the trade of pre-owned software ongoing.  Therefore, software licences that are first ‘put into use’ in the UK, on or after the 1st January 2021, cannot subsequently be resold to the EU; such software can only be resold to UK clients. 

One of EasySAM’s partners for re-selling software is a company called Discount Licensing. They had this to say on the matter:

“Discount-Licensing warrants that it will only resell pre-owned software to EU clients with software in compliance with UK and EU guidelines, as summarised above.  Whilst it is not a legal requirement in order to maintain trade between the UK-EU, we have decided to open a subsidiary company within the EU in case our EU clients prefer to trade with an EU based ‘Discount-Licensing’ entity.  In any case, it is our ongoing commitment to continue trading within the UK and the EU to the same high levels of service that our European clients have come to expect from us.”

To summarise, the main changes are for licenses ‘put into use’ in the UK on or after 1st January. As was mentioned earlier, licenses ‘put into use’ in the UK before this date can still be resold to EU customers, however from the 1st Jan, they can only be sold into the UK.

If you think you may have a surplus of old licenses that are no longer being used, get in contact with us today and see if they have any value. You could be sitting on a great deal of money and not even know it! To find more info on Software Re-harvesting click here.

Published by

Luke Burywood

Share on:

Tagged under: