Court of Appeal England Wales: JJH Enterprises v Microsoft EU Copyright Exhaustion

• The Court of Appeal of England and Wales recently ruled in favor of JJH Enterprises Limited (trading as ValueLicensing) in a copyright exhaustion case, JJH Enterprises Limited v Microsoft Corporation, confirming that Microsoft's software copyrights were exhausted on first sale.
• The decision marks an important development in the ongoing debate over copyright exhaustion in Europe, particularly in light of recent developments in EU IP law.
• The concept of copyright exhaustion is rooted in EU IP law and refers to the idea that once a copyrighted work is sold or licensed, the copyright holder's exclusive rights are exhausted.
• The Court of Appeal's decision will likely have significant implications for businesses operating in the EU, particularly those involved in software development and distribution.

The concept of copyright exhaustion is rooted in EU IP law and refers to the idea that once a copyrighted work is sold or licensed, the copyright holder's exclusive rights are exhausted.

The Court of Appeal of England and Wales recently issued a judgment in JJH Enterprises Limited v Microsoft Corporation, a copyright exhaustion case that has significant implications for businesses operating in the EU. The court's decision was handed down on July 7, 2026, and it marks an important development in the ongoing debate over copyright exhaustion in Europe. In this case, JJH Enterprises Limited (trading as ValueLicensing) argued that the copyright in Microsoft's software products was exhausted upon first sale, allowing for resale of licenses, and the court ultimately ruled in their favor on this point, upholding the Competition Appeal Tribunal's decision. This ruling has sparked renewed interest in the topic of copyright exhaustion, particularly in light of recent developments in EU IP law.

The concept of copyright exhaustion is a complex and multifaceted issue that has been the subject of much debate in recent years. At its core, copyright exhaustion refers to the idea that once a copyrighted work is sold or licensed, the copyright holder's exclusive rights are exhausted, and the work can be freely used without further permission. This concept is rooted in EU IP law, which provides for certain exceptions and limitations on copyright protection. The Court of Appeal's decision in JJH Enterprises v Microsoft will likely have significant implications for businesses operating in the EU, particularly those involved in software development and distribution.

The recent German Supreme Court ruling in USM Haller II (I ZR 96/22), handed down on July 2, 2026, has contributed to the ongoing debate over copyright protection for works of applied art. In that case, the court addressed the copyrightability of the USM Haller furniture system, clarifying that objects of applied art are subject to the same originality threshold as other copyrighted works, following a preliminary ruling from the CJEU. Lawyers should take note of these developments and consider how they may impact their clients' copyright exhaustion strategies. The Court of Appeal's decision in JJH Enterprises v Microsoft will likely be closely watched by lawyers and businesses alike as it provides further guidance on this complex issue.

Lawyers should watch for the implications of JJH Enterprises v Microsoft on their clients' copyright exhaustion strategies, particularly in light of the recent German Supreme Court ruling in USM Haller II.

Source: Original reporting via The IPKat