ANYONE WHO TRADES IN
USED SOFTWARE MUST STILL BE
UP-TO-DATE.

THE GLOSSARY FOR USED SOFTWARE.

In the economic sector, auditing is defined as inspecting internal activities with the aim of obtaining proofs for these. In Information Technology, and particularly in the software area, audits designate inspections within the context of licensing. In this way, controls can be put in place to see whether the software used is sufficiently licensed. In this case, it remains questionable whether the manufacturers legally hold the authorisation for this type of inspection. Notwithstanding the above, an audit does not present a problem for businesses that have acquired used software licences with PREO. PREO are recognised at audits.

Abbreviation for Certificate of Authenticity for FPP and OEM Software.
The sticker can frequently be found on the computer or on the product packaging.
With OEM licences, buyers should make sure that the COAs have not been stuck onto one of the CDs/DVDs. This can create issues at audits in relation to trademark law. The buyer is also on the safe side with these licences if the origin can be proven up to the initial licence holder.

Copyright law is designated as works protection for its author. In this case, the basic idea is to protect the author’s interest. His services should be protected and appropriately remunerated. Compositions, paintings, sculptures or texts were traditionally classified as creations worthy of protection.
Based on an EU directive from 1991, copyright was transferred to national law to protect computer programs. As a result, e.g. in Germany, computer programs have been protected by copyright since 1993. In Germany is equal before the law to protected goods such as literature, art or science.
Due to these legal framework conditions, the rights holder receives protection of his/her intellectual creations that he/she is entitled to. He/she can decide on the initial sale and reproduction of his/her works. Corresponding to the principle of exhaustion that also used on software as well with the EU directive of 1991, the author’s right to control further circulation of works expires after the initial volitional sale.

When continuing to sell used software licences, the seller, buyer and dealer must ensure correct transfer and permitted use of the software licence. Licences can only be transferred correctly by transparent communication between all parties involved.
The licence seller must be able to prove origin and thereby, the chain of rights for the licences to be transferred. The buyer is responsible for the completeness of the transferred licence proofs. The dealer acts as an interface between the seller and the buyer, and the software manufacturer if required. Transparent and compliant software licence transfer from PREO Software AG has established itself as ‘Best Practice’ in the market. In this way, the correct licence transfer process is ensured.

Direct licences are licences that are acquired from the manufacturer or a sales partner directly. With software licences, there is no fundamental difference between using used licences or direct licences.
Using used licences is synonymous with using direct licences from a correctness perspective.

If a newer version of software is acquired, but an older version of the same software (precursor version), this is a downgrade. Standardisation to one version reduces IT costs is a possible reason for this process. Above all, what is downgradable are products, the licences for which have been acquired via volume contracts and operating system licences.

The term Download Software designates software products that are delivered via download. In this case, the user receives a licence key, which is used to activate the installed software.
According to the ECJ decision from 2012, software licences can continue to be generally resold and this is notwithstanding the type of the original delivery, this also includes software delivered by download.

An EULA (End User Licence Agreement) is a licence agreement in which the software manufacturer controls the usage rights of a piece of software.

FPP is the abbreviation for Full Package Product. In this case, they are individual data carriers with software as the customer can buy them in trade. These individual packages are usually made up of the data carrier and the documentation in one package (software box). In general, this software may only be installed on a single computer (individual licence). A resale is also permitted in this case.

With individual licences, acquired software may only be installed and used on one single computer, in constant to licences.

An array of variables must be taken into account in the context of software plans. These include licence or maintenance models or numerous different versions of individual products.
The complex structures often lead to under-licensing or over-licensing. The respective situation is frequently uncovered by SAM (Software Asset Management) projects or audits. Remedial action can be taken by acquiring used software, via which a cheap standardisation can be carried out. Normally, used software, if its products have been bought and not rented, can be sold and therefore lead to an improvement of liquidity.

OEM software (Original Equipment Manufacturer) is designated as programs to initially set up computers that have been sold together with a new PC for a cheap price. Therefore, the customer pays less when buying a new computer with a pre-installed OEM version than if he/she buys the same PC and a normal sale version of the same software separately.
However, these software licences are associated with restricted usage rights if required.
Usually, OEM software contains a data carrier, the COA and a small handbook if required. OEM software can be freely resold. However manufacturer trademark and copyrights must be kept in mind.

Over-licensing is a form of mis-licensing, in which case the user company owns too many licences past the actual need. These licences can be sold and lead to an inflow of liquidity.

The principle of exhaustion stipulates that the manufacturers’ right of distribution is exhausted once the holder of an intellectual property right for used software of a computer program in circulation agrees. The manufacturer subsequently no longer has an influence on further circulation of software in the market.
In the European Union, data-based software products and software licences are subject to exhaustion and may be resold as used software.

Microsoft publishes new PURs on a quarterly basis that each define user rights for software use.

Behind the term remarketing is selling and marketing used objects, e.g. It hardware, manufacturing machines – or even software licences.

With the first FSC decision in 2000, there is the option to have surplus licences further utilised as part of the process designated as software remarketing. In the last three to four years, industry and trade in particular have increasingly handed over their licences that are not required and have taken the pressure off their IT budget considerably as a result. So it’s not uncommon for users to finance up to 50 percent of a licence project by marketing their licences that are not required.

Software Asset Management (SAM) is defined as a bundle of different business processes, with the help of which, a company’s stock of software can be administered and controlled. The process-orientated method is supported by Software Asset Management Tools.

Software Asset Management Tools support administration and creation of inventories for the software and licences available in the business. With this approach, the devices and the number of licences is counted and compared with one another.
The result of a SAM project is a licence record with surpluses and shortfalls for software licences. This normally leads to recapitalisation of used software. Existing licence deficits can be balanced out cheaply with used software.

System builder licences are individual licences that are sold via authorised intermediate dealers to system manufacturers (system builders).
The products are frequently cheaper than FPP and are usually offered in a bundle with hardware – similar to OEM).

Sublicensing is a form of mis-licensing, in which case the user company does not own the number of licences that are actually required. Sublicensing always poses a legal risk. Sublicensing can be offset cheap via the used software market.

System builder licences are individual licences that are sold via authorised intermediate dealers to system manufacturers (system builders).
The products are frequently cheaper than FPP and are usually offered in a bundle with hardware – similar to OEM).

When the customer acquires a piece of software, he receives specific rights for this. The buyer acquires a copy of the computer program. The respective contracts contain detailed copyright provisions and determine to what extent the software can be installed and used by the individual user or by the company.

Used software is what has already been sold once to a business by the manufacturer or a contract partner. These licences are not, or no longer required by the ‘previous owner’, and therefore, they are sold. In contrast to direct licences, used licences are not acquired from the manufacturer directly or from one of its distributors, but usually from a specialist dealer. This dealer organises the transfer from the seller to the buyer.
However, as software cannot wear out, the term ‘used’ does not describe the condition of the software, but only that the previous owner had already owned and used it. This software is in mint condition.

In contrast to individual licences, with licences from volume contracts (volume licences), the user acquires a larger number of licences and is granted the right to install and use the software on several PCs.
At least one data carrier is handed over or provided for download which may be used in accordance with the licensing contract to install software – the user receives the right to create an appropriate number of copies of the software.

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