Microsoft's spat with ValueLicensing limps toward 2026 showdown

The legal saga involving reseller ValueLicensing, Microsoft, and perpetual licenses continued through 2024 and is set for trial in 2026.

Jonathan Horley, CEO of UK reseller ValueLicensing, described the drawn-out process as "feeling like a child that's got to walk and go to school."

Indeed, it'll be five years since The Register reported on case by the time it makes it to trial.

The latest turn came about after ValueLicensing made an application for summary judgment at the end of 2023. The UK's Competition Appeal Tribunal (CAT) dismissed the application in a ruling [PDF] dated November 28, 2024.

Horley told The Register: "We're not going to be appealing." He explained that the purpose of bringing the summary judgment was "to clarify what it was that we were up against because it didn't make a lot of sense to us."

The reseller sued Microsoft for £270 million ($335 million) in damages in 2021, alleging the US software and cloud biz had inserted restrictions into customer contracts to prevent the reselling of perpetual licenses in return for a discount on subscriptions.

Microsoft's desire for customers to move to a subscription-based model is well documented, and it is hardly the only tech giant to seek such a move. However, according to ValueLicensing, Microsoft choked off a supply of secondhand perpetual licenses as a result of its actions.

A Microsoft spokesperson told The Register: "ValueLicensing's core complaint is that we gave customers the option to apply the value of their licenses for older products to new cloud subscriptions rather than selling them to third parties. We believe that was both legal and the right thing to do. Helping our customers move to the cloud improves productivity and security."

However, the CAT agreed with ValueLicensing that the Windows giant's defenses were inconsistent. According to the ruling, "JJH [ValueLicensing] point out that on the one hand Microsoft contends, in its principal defense, that the Impugned terms had little effect and were not enforced; and yet on the other hand when it comes to the alternative defenses it contends that these terms were necessary to protect its commercial interests."

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The tribunal added: "JJH says these positions cannot be reconciled. Microsoft's response to this is to say the alternative defenses are contingent on it being wrong in its primary defense that there is no distortion of the market. That might be its position but JJH is correct that it is difficult to reconcile these alternative cases."

Charles Fussell & Co called the situation "Schrödinger's CAT" (we see what you did there) – where two contradictory realities coexist. In this instance, Microsoft's primary defense was that its conduct wasn't abusive and did not have any appreciable effect on competition, and its alternative defense (if the primary failed) was that it had to engage in the alleged conduct in order to protect its copyright.

ValueLicensing as a business has effectively closed down while the legal process rumbles on, but Horley remains determined to see it through.

He told us: "We're fully funded, and that makes a massive difference to our ability to continue ... I'm left with a small team to support the litigation. So, quite frankly, I'll be carrying on as long as it takes." ®