JJH Enterprises Limited v Microsoft Corporation & Ors

The Competition Appeal Tribunal has jurisdiction to decide any issue necessary to resolve a competition infringement claim, including logically anterior copyright issues raised as a defence. For copyright exhaustion, a product comprising computer programs and other protected works must be characterised as a whole to select the governing regime. Where the product is substantively a computer program and the other works are accessory, the Software Directive governs exhaustion. Volume licences for independent software copies may be subdivided, unlike user rights dependent on a retained central server copy. Exhaustion occurs on first sale and operates despite contrary contractual terms. A reseller’s failure to render its retained copy unusable may infringe the reproduction right, but does not defeat exhaustion or the subsequent purchaser’s entitlement.

JJH Enterprises Limited, trading as ValueLicensing, resold licences for Microsoft Windows and Microsoft Office. It claimed damages against Microsoft Corporation and the other defendants, together referred to as Microsoft, alleging that contractual restrictions and migration to subscription products suppressed the supply of second-hand perpetual licences. The claim concerned alleged competition infringements in the UK and EEA. Microsoft maintained that its copyright had not been exhausted and that ValueLicensing’s activities infringed that copyright. The parties agreed that success on that defence would defeat the competition claim.

In [2025] CAT 33, the Competition Appeal Tribunal rejected Microsoft’s jurisdictional objection and directed preliminary issues on copyright. In [2025] CAT 75, it resolved those issues in ValueLicensing’s favour. Microsoft appealed both rulings. Alexander Wolfson, a proposed class representative in separate proceedings against Microsoft, intervened in the jurisdiction appeal in support of ValueLicensing.

The appeals concerned the Tribunal’s jurisdiction to determine necessary copyright issues, the exhaustion regime applicable to software containing non-program works, and the subdivision of volume licences. The parties agreed that the applicable law was the EU law in force during the claim period. Neither invited departure from assimilated EU case law.

Both appeals were dismissed unanimously. The Chancellor of the High Court delivered the substantive judgment, with which Green and Phillips LJJ agreed.

1. Section 47 A of the Competition Act 1998 gave the Competition Appeal Tribunal jurisdiction to decide every issue necessary to resolve a competition infringement claim. The logical priority of copyright issues did not remove them from that jurisdiction. Nor did the possibility that their determination would establish a copyright cause of action. Microsoft sought no copyright remedy or counterclaim, but relied on copyright to defeat the competition claim. An alternative contractual claim requiring separate determination, as in Unwired Planet v Huawei, was materially different (paras 18–28).

2. Where an integral product contained both computer programs and works governed by the InfoSoc Directive, the governing exhaustion regime had to be selected by characterising the product as a whole. Nintendo Co Ltd v PC Box Srl and Nederlands Uitgeversverbond v Tom Kabinet Internet BV supported that approach. Accessory elements need not be trivial. The Tribunal was entitled to find that Windows and Office were substantively computer programs whose other protected elements were accessory. The Software Directive therefore governed exhaustion throughout the products. This reflected the balance inherent in exhaustion and did not constitute an unjustified derogation from intellectual property protection (paras 73–82).

3. The prohibition on subdivision in UsedSoft GmbH v Oracle International Corp concerned client-server user rights dependent on a single server copy which the original purchaser continued to use. It did not prohibit subdivision of licences for independent copies. Initial downloading to a server solely for internal distribution did not create the dependency found in that case. The German decision in UsedSoft 3 provided persuasive support for this interpretation (paras 90–96).

4. The distribution right was exhausted on first sale. A subsequent failure by the original purchaser to render its retained copy unusable could infringe the reproduction right, but did not invalidate the subsequent purchaser’s entitlement. Proof of deletion was therefore unnecessary to establish exhaustion. Contractual descriptions of volume purchases as a single licence, and contractual transfer formalities requiring consent, could not prevent exhaustion operating by law. The Tribunal had sufficiently examined the licence arrangements (paras 98–104, 110).

5. The challenge to the Tribunal’s factual characterisation did not approach the irrationality threshold required for appellate intervention. The allegation concerning technical measures sought determination of an unpleaded claim and required no decision. Splitting a product suite into constituent programs was also left undecided because no such activity was alleged (paras 85, 105, 108).

• Court of Appeal (Civil Division): In [2026] EWCA Civ 872 , unanimously dismissed the jurisdiction appeal and the preliminary-issues appeal.
• Competition Appeal Tribunal: In [2025] CAT 75, Justin Turner KC, Andrew Lykiardopoulos KC and Antony Woodgate decided the copyright preliminary issues in ValueLicensing’s favour. The Tribunal granted Microsoft permission to appeal.
• Competition Appeal Tribunal: In [2025] CAT 33, Justin Turner KC rejected Microsoft’s jurisdictional objection and directed a trial of copyright preliminary issues. The Tribunal granted Microsoft permission to appeal.