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JJH Enterprises Limited, trading as ValueLicensing, today welcomes the unanimous judgment of the Court of Appeal dismissing Microsoft's appeals in full. The Court dismissed both Microsoft's jurisdiction appeal (CA-2025-001656) and its appeal against the Competition Appeal Tribunal's determination of the preliminary copyright issues (CA-2025-003082). The judgment confirms that the Competition Appeal Tribunal has jurisdiction to determine copyright issues where they arise as necessary questions in competition law claims. It also upholds the Tribunal's application of the landmark UsedSoft decision, confirming that Microsoft's software products are capable of benefiting from the doctrine of exhaustion and that qualifying volume licences may be subdivided and resold. The Court rejected Microsoft's argument that its licensing arrangements create an indivisible block licence and confirmed that Microsoft's contractual licence terms cannot override the doctrine of exhaustion, which operates as a matter of law. The Court also dismissed Microsoft's remaining grounds of appeal, including arguments concerning sample transactions, contractual transfer mechanisms and the burden of proof. The judgment clears the way for ValueLicensing's abuse of dominance claim to proceed before the Competition Appeal Tribunal and is expected to be of considerable significance for the proposed opt-out collective proceedings brought by Alexander Wolfson and the separate proceedings in Discount-Licensing Limited and another v Microsoft Corporation and others.

"Microsoft is facing increasing legal and regulatory pressure, including a certified £2 billion ($2.8 billion) class action lawsuit in the UK over alleged anti-competitive cloud licensing practices. An ongoing appeals phase in the UK regarding software license resales also risks a multibillion-pound class action, potentially impacting future market dynamics and financial liabilities."

The article examines the applicability of the exhaustion doctrine under EU copyright law to hybrid software products—works that combine computer programs with expressive content like user interfaces, icons, fonts and templates.

Microsoft told a London appeals court Tuesday that the Competition Appeal Tribunal lacks jurisdiction to decide copyright infringement issues underpinning a reseller's £140 million ($189 million) case over alleged anticompetitive restrictions on the secondary market.

Microsoft has doubled down on its claims that the UK’s Competition Appeal Tribunal does not have jurisdiction to hear issues concerning copyright law, urging an appellate court to overturn a ruling that rejected its defence against a £270 million standalone antitrust lawsuit.