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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 8445
Experience:  I have been practising for 30 years.
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A quick question:- If some computer software has been

Resolved Question:

A quick question:-
If some computer software has been legally purchased and the company that purchased it went into administration and we purchased all the assets of the company, is it reasonable to be blackmailed by the computer company into purchasing the software again (at high cost - i.e. £46k)?
i.e. is legitimately purchased software transferrable between companies?
Submitted: 2 months ago.
Category: Law
Expert:  F E Smith replied 2 months ago.

Can you explain the situation here in detail please?

In particular, does the software agreement say that it is non-transferable?

Customer: replied 2 months ago.
Sorry for the delayed response. It seems that neither the software supplier nor us can find the original licence agreement - it was signed over ten years' ago. Their current licence clearly states that under our circumstances the licence would be terminated, but that doesn't necessarily mean that it was the same when we signed the agreement. I remember, some years' ago, a radio article on Microsoft and transfer of licences on selling a PC with windows on it. Microsoft's stance was the same as here, a new licence was required, but the legal guy said that whilst that was written in the licence, that did not make it either legal or enforceable... This was why I asked the question in the first place. In our situation the software company is holding us to ransom saying if we don't pay, they will switch us off.... then we can't run the company.
Expert:  F E Smith replied 2 months ago.

You have to consider who has the deepest pockets. Who has the most money to be able to risk going to court?

If they simply turned the software off, would that be the end of your business? If they did that, would you then be able to fund the litigation.

At the moment, to an extent, they have you over a barrel until this issue is decided by a court.

You know you don’t have the agreement. What you don’t know is whether they have the agreement or not and they are simply choosing to say they don’t have it because it may be that the agreement that was signed and that you inherited along with the company, did not have any mention of transfer and that is why they don’t want to produce it!

If there is nothing mentioned in the document about transfer, then it is transferable.

Now, this company has presumably been in business for some period of time and presumably, they have other agreements with other companies from the time and it seems unlikely that all of those have been lost or destroyed and hence, it would potentially be possible for them to let you have another from another customer to show the wording. If this gets to court, I would probably raise that in court, rather than now.

You want to keep your company going and at the moment, they are holding a knife at your throat.

There is nothing to stop you therefore either negotiating or if they will simply not negotiate, paying the money under duress/pressure and then taking them to court to have the issue of whether the software is transferable or not determined by the court.

If you think that having the software turned off is a real threat, and would be a real threat to your business, you could apply to court for an injunction preventing them turning off the software in the short term, pending the outcome of a court hearing to have the whole thing determined.

Can I clarify anything for you?

Please rate the service positive. It’s an important part of the process by which experts get paid.

I can still clarify things for you.

Best wishes.


Customer: replied 2 months ago.
Can you please answer the question that I have posed, rather than stating the obvious and answering questions that have not been asked?
Expert:  F E Smith replied 2 months ago.

It would be remiss of me not adding relevant points whether you had asked the question or not.

With regard to stating the obvious, sometimes, things which are obvious may be obvious to one person but not necessarily another. Hence, I need to state the obvious because I don’t know whether it’s obvious to you or not.

If there is a software agreement in which it was agreed that it was non-transferable, then it is not transferable regardless of whether you bought it or not. The view of the court would be that you should have made enquiries.

However if neither party can find a copy of the actual agreement signed at the time, the court is likely to take the view that although that one particular agreement cannot be found, if there were other agreements with other customers at the same time, which said that the licence was non-transferable, that on the balance of probabilities, it was a non-transferable license.

Does that answer?

Customer: replied 2 months ago.
Not really. If I tell you to kill somebody, you might do it (following my instructions), but it certainly does not make it legal. Just because there might (or might not) be a licence agreement that precludes transfer between companies, doesn't make it legal. This is the basis of my question:- can a licence legally preclude the transfer? Bearing in mind this type of think (even though it is USA based:-
Expert:  F E Smith replied 2 months ago.

Apart from the fact that it is a US case(which you could cite as being persuasive and are not binding), if the company simply say that you can’t do it, as they are doing, then you are faced with going to court if they threaten to turn the software off as I explained in my earlier post.

Very often, all the persuasive arguments and reasons on the face of the earth fall on stony ground if they don’t want to listen.

Even if you go to court and win, you may find that the support they give you, if you need it, may be non-existent.

In law, there is very often never a yes no black-and-white answer and even if there is a yes no black/white answer, it relies on the parties accepting the answer.

Even if I said to you that they cannot do this, it seems that they are doing, and hence, you are faced with court. When they are faced with it, they may back down based upon the prospect of potentially losing and having to pay your costs .

F E Smith, Advocate
Category: Law
Satisfied Customers: 8445
Experience: I have been practising for 30 years.
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