Microsoft software resale appeal catches eye of £3.5B class action

Appeal heads to the Court of Appeal

A long-running fight over whether Microsoft customers can resell perpetual software licences is heading to the Court of Appeal on April 28 and 29. The Competition Appeal Tribunal (CAT) ruled in November that resale of perpetual licences was lawful; Microsoft disagreed and, it has been reported that, the company filed this appeal. The legal argument took an unexpected turn in 2025 when Microsoft pivoted from competition law to copyright — arguing that Office and Windows contain non-code elements like help files and images that cannot be second‑handed without infringing copyright. The judge rejected that theory at the tribunal level; Microsoft has appealed, and a trial could now be scheduled for 2027.

Multibillion class action watches closely

This is not just a bilateral spat. It has been reported that the parallel Alexander Wolfson class action estimates a proposed class of 2.3–2.7 million UK customers, with aggregate damages preliminarily put between £1.3 billion and £3.5 billion, accounting for interest. The Wolfson team, which alleges that Microsoft’s licensing practices cost UK customers, has allegedly been granted permission to attend the ValueLicensing jurisdiction hearing — and they are watching closely. Why? Because a victory for Microsoft on the copyright jurisdiction point could blunt or reshape the legal route available to mass claims like Wolfson’s.

What’s at stake

If Microsoft wins, the consequences would ripple across the second‑hand software market and beyond — potentially overturning parts of the pre‑Brexit ECJ UsedSoft vs Oracle precedent and raising questions about how the European Computer Programs Directive applies to Office and Windows. ValueLicensing’s managing director Jonathan Horley told reporters that the appeal “deals with whether the CAT can decide non‑competition law issues (like copyright)” and that the copyright appeal could affect multiple claims, including Wolfson’s. Microsoft declined to comment on the latest development, and Stewarts LLP, supporting the class action, did not respond to requests for a statement. High stakes, old arguments — and an outcome that could rewrite the rules of a market that many assumed was settled.

Sources: The Register