On 16 September 2021, The Court of Justice of the European Union (CJEU) handed down its judgment in The Software Incubator Ltd v Computer Associates (UK) Ltd (Case C-410/19) EU:C:2021:742, ruling that the supply of computer software by electronic means, together with a grant of a perpetual licence, falls within the definition of “sale of goods” for the purposes of Article 1(2) of the Commercial Agents Directive (86/653/EEC). The judgment followed a request for a preliminary ruling from the UK Supreme Court.
The Directive is implemented in Great Britain by the Commercial Agents (Council Directive) Regulations 1993, which remain in force as retained EU law and provide significant protections to commercial agents, including compensation rights upon termination of the agency agreement.
The decision is significant as it was previously uncertain whether the activities of agents appointed to sell software supplied by electronic means (and not on tangible medium) fell within the scope of the Directive. Given the request for a preliminary ruling was made before the end of the transition period, the Supreme Court is now expected to apply the CJEU’s ruling with the effect that commercial agents selling software supplied by electronic means, along with the grant of a perpetual licence, will be protected by the Regulations.
For more detail, read the CJEU’s judgment here.