Microsoft is pursuing one last legal avenue to block the resale of pre-owned software licenses in the United Kingdom, seeking permission to appeal to the Supreme Court after losing at both the Competition Appeal Tribunal and the Court of Appeal. The case, which began as a GBP 270 million competition claim by license reseller ValueLicensing, has become a pivotal test of whether software vendors can use copyright law to prevent customers from selling unused perpetual licenses on the secondary market.
ValueLicensing sued Microsoft in 2021, alleging that contractual clauses in Microsoft’s licensing agreements were designed to push customers toward Microsoft 365 subscriptions while making it all but impossible to resell on-premise perpetual licenses such as Windows and Office. Microsoft initially contested the competition claim, then shifted strategy entirely by arguing that the resale itself constituted copyright infringement – a defense that, if successful, would have nullified the competition claim at its root.
The Competition Appeal Tribunal rejected both arguments in 2025, ruling that resale and subdivision of on-premise software licenses did not infringe Microsoft’s copyright. The Court of Appeal upheld that decision on July 7, 2026, in a judgment that criticized Microsoft’s reasoning as producing anomalous results – noting that accepting that logic would mean software vendors could sidestep the established UsedSoft precedent simply by bundling clip art or icons with a program.
Microsoft subsequently indicated its intention to seek permission to appeal to the Supreme Court. On July 21, the Tribunal granted an extended stay of proceedings while Microsoft pursues that application, though the stay is partial – it does not apply to ValueLicensing’s applications for further disclosure and confidentiality, which are expected to proceed at a case management conference in September.
The stakes extend well beyond ValueLicensing’s own claim. A related collective action brought by Alexander Wolfson, which shares legal foundations with the ValueLicensing case, could expose Microsoft to multibillion-pound liability if the Court of Appeal’s reasoning stands. The Wolfson action was granted permission to intervene in the appeal, and the judgment noted that the intervener’s position was essentially supportive of ValueLicensing’s case.
The underlying legal principle at issue is software exhaustion, established by the European Court of Justice in the 2012 UsedSoft v. Oracle ruling, which held that a copyright owner’s distribution right is exhausted once software has been lawfully sold. Microsoft has attempted to carve out an exception by arguing that modern software – which includes graphical elements, help files, and other non-program components – qualifies as a creative work under broader copyright directives rather than as a computer program under the software-specific rules. Both the CAT and the Court of Appeal rejected that distinction.
A Supreme Court grant would extend the battle by years. A denial would finalize a ruling that effectively confirms the secondary software license market as lawful in the UK – a decision with ripple effects for how enterprise software is priced, licensed, and resold across the industry.
Sources: Microsoft seeks Supreme Court lifeline in pre-owned license battle (The Register, July 27, 2026); Court tosses Microsoft’s appeal in pre-owned software licenses battle (The Register, July 7, 2026); Second-hand software gets a green light (Search the Law, July 7, 2026)