Tuesday, June 06, 2006

Hardware lock Theft

Dear Colleagues

You work with various softwares. Some of them are very expensive. AutoCad, Primavera Project Management, Thermoflow thermal power plant design etc.

Say one day, your PC plus its hardware lock is stolen. What happens next?? In our local environment, we insure only hardware unless we clearly specify the other valuables. Then insurance company specifies the software value and puts a premium. If you don't, then you have value under risk.

Below given is the German law practice. Please do review carefully.

There are serious cases in the local market for hardware lock theft, so you should better take precausions earlier to cover your software valuables.

Thank you & best regards

Haluk Direskeneli

Increasing Importance of Hardware Locks (Dongles, Keys) in Recent German Case Law

by Andreas Raubenheimer
Attorney at Law/Maître en Droit

User must purchase complete software license in case of theft or loss of hardware lock - no obligation for software manufacturer to sell dongle separately

Theft or loss are risks in the sphere of the user - therefore no claim for additional lock as replacement for stolen or lost lock

Finally one may mention a case where the Frankfurt District Court had to decide whether supplier had to provide an additional hardware lock free of charge where the original lock has been stolen. However, on April 4, 1995 the Court rejected the demand of a preliminary injunction filed by the user to this respect. The reasoning was that theft or loss of the original hardware lock occur in the sphere of
the user and therefore is beyond the control of the software supplier who his part has already fulfilled his contractual obligations by delivery of the software in conjunction with the original hardware lock and by grant of a use right (license).

User is only authorized to legal measures of protection against theft or loss - therefore circumvention/removal of original lock not allowed

Lock represents value of relating software - therefore user has to acquire complete new program license where lock is stolen or lost The Düsseldorf District Court and the Düsseldorf Court of Appeals in their above-mentioned judgements of March 20, 1996 and March 27, 1997 shared the point of view of the Frankfurt District Court. Moreover the latter two judgements explicitly stated that the user must purchase another complete software license in case of theft or loss of the hardware lock. The Düsseldorf District Court furthermore explained that the lock represents the economic value of the program. It is important to note that the Düsseldorf District Court and the Düsseldorf Court of Appeals rejected a right of the user to
circumvent or remove the hardware lock as an alleged protection for potential loss or theft of the lock which might occur later.

© 1997 by Andreas Raubenheimer, Munich/Germany


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