This is not the final word, and it is not a ruling on who ultimately wins. It does remove a major obstacle for the plaintiff, and it affects anyone who buys, sells or manages perpetual Windows and Office licences.
What just happened
The decision is procedural. The Court of Appeal declined to let Microsoft take its July defeat further. The Supreme Court itself has not ruled on anything.
Microsoft could still apply to the Supreme Court directly. It would have 28 days to file and would need to show a compelling reason why the Court of Appeal was wrong to refuse permission. That deadline and test come from The Register's report. Neither Microsoft nor ValueLicensing commented on the latest development, according to that report.
The stakes of that application are practical. After the July judgment, the Tribunal paused the claim, apart from ValueLicensing's outstanding disclosure and confidentiality applications. Charles Fussell LLP, the firm acting for ValueLicensing, said that if permission to appeal is refused, the claim will proceed to a liability trial in the CAT. Whether Microsoft goes to the Supreme Court directly will decide how quickly that happens.
The July judgment
The refusal only makes sense against what the Court of Appeal decided on 7 July. In JJH Enterprises Ltd (t/a ValueLicensing) v Microsoft Corporation [2026] EWCA Civ 872, the court dismissed both of Microsoft's appeals. They covered two preliminary questions:
- Jurisdiction. The court held that section 47A of the Competition Act 1998 lets the CAT decide any issue needed to resolve a competition claim, including a genuine copyright dispute.
- Exhaustion of copyright. The court upheld the Tribunal's rulings that Microsoft's copyright in its software had been exhausted. This follows the principle from the EU's UsedSoft case. That principle says a copyright owner loses the right to control further sales of software once it has lawfully been sold.
Microsoft's two main arguments were these:
- Office's icons and help files made it a creative work covered by different copyright rules, not the software rules UsedSoft addressed. The Register reports that the Court of Appeal found this would lead to "odd results". The court said it would let a vendor avoid UsedSoft just by bundling in some icons or clip art.
- Bulk licences, such as a 1,000-seat purchase, could not legally be split up and resold piece by piece. The court sided with the Tribunal and found nothing wrong with ValueLicensing's approach.
What this does and doesn't mean
These were preliminary issues. They were not a trial of the alleged competition-law breaches. The underlying claim is that Microsoft restricted the resale market for pre-owned on-premises licences. ValueLicensing alleges Microsoft built restrictive clauses into its contracts, essentially offering better subscription deals to customers who did not resell old licences. It sought £270 million, and Microsoft denies wrongdoing.
Microsoft's position is that the July ruling misses the point. Its spokesperson said the decision does not address ValueLicensing's core complaint: that Microsoft let customers apply the value of older licences to new cloud subscriptions instead of selling them to third parties. Microsoft says it believes that was legal and the right thing to do, because helping customers move to the cloud improves productivity and security.
So the careful reading is narrow:
- The courts have rejected Microsoft's copyright-based defences to the resale model, as those defences were framed in this case.
- The courts have not found that Microsoft broke competition law.
- Nothing here says every second-hand Microsoft licence can be freely transferred. The rulings turn on the issues and facts before the tribunal.
- The ruling is a UK decision based on EU-derived exhaustion principles. Anyone relying on it should take advice for their own jurisdiction and licence type.
The "Known Adverse Document"
The disclosure fight adds pressure. A recently published Consent Order requires documents from current and former Microsoft executives. They include an internal presentation titled "Second-Hand Software Presentation" (SHS). Its contents are unknown, and the order calls it a "Known Adverse Document" dating to 2013. The order also asks why Microsoft waited until the end of 2025 to disclose that the document existed.
A label in a court order is not evidence of what the slides say. Nobody outside the case knows what the deck contains. It would be a mistake to read it as proof of intent, or to link it to the Court of Appeal's refusal. The two are separate tracks. The order is a Tribunal case-management step from September, and the refusal is an appellate permission decision from October.
The next steps are reportedly a witness statement from Microsoft explaining who knew what and when, then further disclosure.
The bigger exposure: the class action
Alexander Wolfson is the proposed class representative in a separate collective claim. The Register describes it as brought for millions of UK customers and seeking between £1.3 billion and £3.5 billion in compensation. Those are claimed figures, not awards. Wolfson was granted permission to intervene in the appeal on 30 March. The Register's July report says Justin Turner KC presides over both his collective action and ValueLicensing's claim. The judgment also noted that the intervener's position was "essentially supportive of VL's case." That is why this ruling matters beyond ValueLicensing.
What IT admins and licence managers should take away
- Don't change anything yet. Existing agreements, Software Assurance terms and cloud migration offers are unaffected by an unexplained permission refusal.
- Watch the 28-day window. If Microsoft applies to the Supreme Court, the Tribunal stay may continue. If it doesn't, the claim heads toward a liability trial.
- Keep your records. Licence purchase history, volume agreement terms and any "From SA" credits are the paperwork that matters if resale or migration rights are ever tested.
- Treat resale as a legal question, not a licensing-portal question. The courts have narrowed Microsoft's copyright arguments, but contract terms and competition issues are still open.
The case is a long way from over. Microsoft has lost the argument that copyright law shuts the second-hand market down. It has not yet lost the argument that its cloud-migration offers were lawful. The next milestones to watch are whether Microsoft applies to the Supreme Court and what the SHS disclosure shows.