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Pre-owned software (also known as used software / aftermarket software / second-hand software / secondary market software) is a legal copy of software that is traded on the open market, for which the distribution rights held by the copyright owner have already been exhausted as a result of the first sale, and which is subsequently resold. In this context, more important than the copy of the software itself is the right to use the program.

The existence of surplus software (so-called overlicensing) may result from many causes, such as the end of an organization’s operations, restructuring and the elimination of positions at the original holder, but also from changes in the IT systems in use^[1], as well as from migration to cloud services. A company placing such software on the market may also seek to sell surpluses resulting from the purchase of multi-seat packages.

In addition to direct transfers between end users of software, there are also specialized sellers (software brokers) who, after purchasing software from the original owner, offer it for sale to new interested entities. Users of secondary market software include intelligence services^[2][3], energy companies^[4], ministries^[5], hospitals^[6], and other entities required to manage their cybersecurity in accordance with the NIS2 Directive^[7].

The most common reason for acquiring secondary market software is a lower price^[8] compared to buying directly from the manufacturer, as well as the fact that manufacturers often no longer offer older versions of software or have stopped granting perpetual licenses for certain products. The ability to purchase used software is important for the legal operation of older hardware or production machines acquired from another owner and not equipped with all software required for their operation. Proper licensing is important from a compliance perspective—not only in the context of the risk of software audits, criminal liability, or damages claims by copyright owners, but also due to its impact on a company’s valuation in the event of a sale^[9].

Resale of secondary market software may also take place between individuals; however, care must be taken to provide all necessary documentation so that the buyer can prove the legality of using the software. If certain licenses include prohibitions on further resale, such provisions are contrary to European Union law and are considered invalid.

Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs: ^[10]

According to Article 4(2): “The first sale in the Community of a copy of a program by the rightholder or with his consent shall exhaust the distribution right within the Community of that copy, with the exception of the right to control further rental of the program or a copy thereof.”^[10]

The same text was already included in the previous directive—the Council Directive of 14 May 1991 on the legal protection of computer programs (91/250/EEC).^[11]

The Court of Justice of the European Union (CJEU) confirmed in its judgment of 3 July 2012 that trading in secondary market software is permissible even where the software was distributed electronically.

The reasoning indicates that the principle of exhaustion of the distribution right applies to every first sale. The Court also held that each subsequent acquirer may download the software again directly from the manufacturer, and that exhaustion also covers updates and upgrades made available to the first acquirer. ^{[12] [13]}

License management is part of software asset management (SAM) and IT asset management (ITAM) processes, which enable companies to control the legality, cost, and efficiency of software use. Proper documentation of license provenance, confirmation of uninstallation by the previous owner, and continuity of lawful transactions are key to ensuring compliance and vendor audits. ITAM is standardized by the ISO/IEC 19770 family of standards^[14]. These standards also specify good practices for SAM processes. Pre-owned software is one method of optimizing SAM and ITAM.

Used software has the same technical parameters as new software. This is important from the perspective of cybersecurity management, because it enables broader modernization with the same investment and a lower unit price, thereby contributing to a higher level of cybersecurity.^[15] By managing cybersecurity with the use of pre-owned software, a cybersecurity manager can purchase a larger number of software licenses with the same financial resources, save funds for other projects, and—most importantly—avoid using unsafe, illegal, cracked versions of software.

With the growing importance of the ESG concept, the CSRD and socially responsible public procurement, since the 2020s secondary market software has also been seen as an element of the circular economy. It contributes to reducing waste by extending the life cycle of devices, machines, and systems, and also by reducing the outflow of capital to other world regions.^[16]

Unlike many other products, software quality does not deteriorate as a result of use^[17]. Sustainable development combines economic, environmental, and social aspects. Secondary market software reduces the need to produce new physical data carriers and the need to retire hardware from use due to incompatibility with new software versions.

In some EU countries, supervisory authorities have already issued decisions stating that the exclusion of pre-owned software bids from public procurement tenders was unjustified. These decisions are currently known in the following countries:

• Germany^[18]
• the Czech Republic^[19].

The principle of exhaustion of copyright may be recognized by individual legal systems either at the national, regional (e.g. EU) or global level.

The principle of regional exhaustion of the distribution right for copies of computer programs applies in the European Union: the distribution right is exhausted upon the first lawful placing of a copy on the EU/EEA internal market by the rightholder or with their consent.

The Software Directive^[10] states that once the author sells a copy of the program, the right to further distribution ceases to exist. This applies both to software delivered online and on physical data carriers. This position was confirmed by the CJEU in its judgment of 3 July 2012.^[13]

• Software