Commercial Agent Indemnity and the sale of software licences

Yes, the Court of Justice of the European Union confirmed this in 2021 in the case The Software Incubator v Computer Associates. The supply of software licences online can be qualified as a sale of goods, opening up the status of commercial agent and the right to an end-of-contract indemnity under certain conditions.

Computer Associates was selling software licences online and refused the end-of-contract indemnity to its agent, considering that online sales were not a sale of goods within the meaning of Directive 86/653. The CJEU ruled in favour of the agent, qualifying the online supply of software as a sale of goods.

Yes, according to the CJEU. The Court held that these transactions involve a transfer of ownership against payment, which qualifies them as a sale of goods within the meaning of the directive on commercial agents. This qualification opens up the application of the protective status of the commercial agent to the distribution of software.

Because it clarifies that distributors of software licences online can be recognised as commercial agents and claim an end-of-contract indemnity. Publishers must therefore factor this risk into their distribution contracts and anticipate the possible indemnity due upon termination of the relationship.

In the event of termination of the contract, the agent is entitled to an indemnity compensating the loss suffered. In practice, it is often assessed at around two years of commissions, but this scale is not binding on the judge, who assesses according to seniority, the contribution of clientele and the circumstances of the termination.

One must first be qualified as a commercial agent, which the CJEU decision facilitates for distributors of software online. The indemnity is due in the event of termination of the contract, except for exceptions (serious fault of the agent, assignment on its initiative, termination by its own doing). The conditions are assessed on a case-by-case basis.

By precisely framing its distribution contracts: qualification of the relationship, missions, remuneration, conditions and consequences of termination. The publisher must appreciate that its online distributors may fall under the status of commercial agent and provision for the potential indemnity. Legal support makes it possible to structure these contracts with full knowledge of the facts.

Yes. CJEU decisions are binding on the interpretation of the national law of Member States. The French Court of Cassation integrates this case law, as it has done on other aspects of the status of commercial agent. Distributors of software online established in France can therefore avail themselves of it.