Software agents now afforded statutory protection

As we move deeper into the digital age we are increasingly seeing traditional legal concepts of goods and services re-examined. The Consumer Rights Act 2015 recently introduced a third “digital” category for consumers and we now have a new case providing that software agents are entitled to statutory protection under the Commercial Agents (Council Directive) Regulations 1993 (the “Regulations”), a protection which, in the UK at least, was previously reserved for agents acting as intermediaries in the sale of goods only (unlike our European cousins whose agents for goods and services have been protected).

In the case in question, The Software Incubator Limited v Computer Associates Limited [2016], the judge found that a licence of software was a sale of goods for the purpose of the Regulations, resulting in payment of compensation, commission on post-termination sales and damages for termination without notice.

Although shrink-wrapped software has been treated as goods for some time, this development further dismantles the distinction between software and goods when delivered via hard disk or server. We will have to wait and see how this case impacts on the interpretation of broader sale of goods legislation.  Companies using software sales agents would be advised to review their current arrangements to ensure they minimise their exposure to their agents under the Regulations.

Please contact Ben Cooke for more information as to how this development may affect your business.

Article written by Alex Aisthorpe

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Ben Cooke

Senior Associate

I specialise in commercial contracts, intellectual property exploitation, data protection, e-commerce and consumer law.