Judge rejects another Microsoft appeal against surplus license reseller suit

Windows giant's UK tentacle still on the hook over pre-owned on-prem software market dominance

The stage is set for a courtroom showdown between Brit reseller ValueLicensing and Microsoft after a judge dismissed the Windows giant's latest appeal to toss the case about allegations of unfair licensing.

This follows an attempt by Microsoft to get its UK tentacle removed from the claim brought by ValueLicensing and shift the hearing to Ireland. In April, Mr Justice Picken disagreed and dismissed Microsoft's challenges. The company filed an appeal, which was refused by Lord Justice Males this week.

The reasons for the refusal were blunt. "This is not a case where Microsoft UK was merely a subsidiary, playing no role in the conduct alleged to be abusive," the order reads. "Rather, it is contended that it was itself active in implementing that conduct by marketing the licences containing the 'Impugned Terms'."

Licenses form the core of the case. ValueLicensing makes its money by reselling perpetual licenses for Microsoft products from organizations that no longer need them. The company alleges that Microsoft imposed restrictions on customers to prevent these licenses being sold on in return for more favorable terms for subscription-based products, such as Office 365.

Microsoft removed the requirement in 2021, but the ValueLicensing claim asserts the practice cost it $352m in lost gross profit.

Microsoft described April's ruling as merely "procedural" and The Register asked the company what it made of the rejection of its leave to appeal. We will update this piece should Microsoft respond.

Jonathan Horley, founder and Managing Director of ValueLicensing, said in a statement: "We are pleased that the High Court and the Court of Appeal have both dismissed Microsoft's meritless delaying tactics and look forward to moving into the substantive phase of the case.

"Microsoft's abuse of its dominant market position effectively destroyed the pre-owned software market for desktop products. Microsoft's removal of these products from the market has deprived UK and European customers including public sector organisations, such as NHS Trusts and local councils, of the opportunity to buy perpetual licences at lower prices. As Microsoft benefited from extending its market share, it has likely come at a cost to the UK taxpayer as well as businesses like ValueLicensing."

Microsoft must now file its defense by the end of August ahead of a hearing later this year.

A Microsoft spokesperson sent us a statement:

"This dispute about the court's jurisdiction has nothing to do with the substance of the case. ValueLicensing's core complaint is that we gave customers the option to apply the value of their licenses for older products to new cloud subscriptions rather than selling them to third parties. We believe that was both legal and the right thing to do. Helping our customers move to the cloud improves productivity and security." ®