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].
4) 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.
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.
Should you have any questions, please telephone one of our colleagues on +44 (0)1283 511524 or email: email@example.com.
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