Microsoft seeks Supreme Court lifeline in pre-owned license battle
Microsoft has won an extended stay in its long-running legal battle with ValueLicensing over the resale of second-hand software licences, as it seeks permission to appeal to the UK Supreme Court. The move follows a Court of Appeal defeat on 7 July, which upheld a 2025 ruling by the Competition Appeal Tribunal that reselling and subdividing Microsoft's on-premise licences does not breach the company's copyright, keeping Microsoft on the back foot in a case with potentially huge financial stakes.
ValueLicensing originally sued Microsoft for £270 million in 2021, alleging the firm used contractual clauses to push customers towards Microsoft 365 subscriptions and blocked resale of perpetual licences; Microsoft later argued such resales were unlawful under copyright law, a position tribunals have repeatedly rejected. While most proceedings remain paused pending the Supreme Court decision, ValueLicensing's disclosure and confidentiality applications will still be considered at a Case Management Conference in September. The case is being watched closely as a similar, much larger class action led by Alexander Wolfson could result in a multibillion-pound payout, and ValueLicensing's Jonathan Horley welcomed the tribunal's decision not to grant a full stay.
In short
- Microsoft seeks Supreme Court appeal after losing licence resale case twice
- £270m ValueLicensing claim partly paused pending appeal decision
- Related class action could bring multibillion-pound damages against Microsoft
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Software is intellectual property fundamentally different from physical goods, and creators should control distribution to maintain product integrity, security, and legitimate business models. Microsoft has invested billions developing these tools, and licensing terms represent fair voluntary contractual arrangements. Without distribution control, the company cannot effectively manage support, security patches and prevent piracy. Allowing unfettered resale grants others commercial interest in Microsoft's intellectual property without compensation.
The case against
Once customers have purchased a license, resale restrictions are anti-competitive and harmful to consumers and fair markets. Repeated tribunal rulings confirm resale does not breach copyright—it exhausts Microsoft's rights after sale. This principle protects consumer choice and prevents monopolistic behaviour where Microsoft uses contractual terms to eliminate cheaper alternatives and force expensive subscriptions. The multibillion-pound class action reflects genuine harm: customers are overcharged because legitimate second-hand markets are eliminated, and fair competition is stifled by treating permanent licenses as subscription services.
Explained simply
Microsoft and ValueLicensing have been locked in a long-running legal dispute over the resale of second-hand software licences. ValueLicensing sued Microsoft in 2021, accusing the company of trying to block resales through contractual terms. The legal question at stake is whether reselling licences breaches copyright law.
The stakes are enormous. ValueLicensing is seeking £270 million in damages, whilst a separate and much larger class action led by Alexander Wolfson could result in a multibillion-pound payout if Microsoft loses. This makes the outcome critical to how software licensing will work in the future.
British courts have ruled against Microsoft at every stage. The Competition Appeal Tribunal and the Court of Appeal both found that reselling and subdividing Microsoft's licences does not breach copyright law. Microsoft's defence that resales are unlawful has been repeatedly rejected.