Two unfavourable rulings were not enough. Microsoft has decided to take its legal battle against ValueLicensing all the way, requesting permission to appeal to the UK Supreme Court. At stake is the right of businesses to resell surplus on-premise software licences, a secondary market that the Competition Appeal Tribunal found does not infringe copyright. On July 7, the Court of Appeal upheld that view, dismissing Redmond’s arguments.

At the technical heart of the dispute is the ability to subdivide and transfer to third parties licences that were originally purchased in bulk. ValueLicensing’s business model revolves around buying unused licences from large organizations and reselling them at a discount. Microsoft argues that this practice amounts to copyright infringement, whereas the courts have so far held that the exhaustion of distribution rights also applies to software licences.

Behind the legal veil lies a scenario that directly affects those who run on-premise IT infrastructure and, in particular, those building self-hosted stacks for Large Language Models. The reason is straightforward: on-premise AI workloads, from inference to fine-tuning, often rely on commercial operating systems and databases – from Windows Server to SQL Server – whose licence costs are a significant line item in TCO calculations. An active and legally recognised secondary market would allow these licences to be procured at lower prices, lowering the barrier to entry for labs, SMEs, and research centres that want to retain data sovereignty without moving to the cloud.

Microsoft’s reaction, however, signals a hard-line stance. The company is unwilling to concede on a principle that, if upheld at the highest level, could erode its control over the licence lifecycle and encourage a parallel ecosystem of resellers. The issue is not just lost revenue: what is truly at stake is the ability to lock customers into multi-year contracts and subscription models that ensure predictable cash flows. At a time when the giant is pushing cloud-first solutions aggressively, a vibrant and regulated on-premise licence market represents a brake on migration to Azure and consumption-based services.

For those evaluating on-premise LLM deployments, the message is ambivalent. On the one hand, prolonged legal uncertainty suggests caution when crafting procurement strategies that depend too heavily on the future resale value of licences. On the other, if the Supreme Court were to confirm the earlier decisions, a window of opportunity would open to optimise fixed infrastructure costs, shifting resources toward specialised hardware – GPUs, high-speed storage – where every euro invested translates into tokens per second.

The ValueLicensing case should therefore be read as a structural signal: the tension between proprietary software and the right to resell is set to grow as computing workloads become increasingly vertical. Companies that already struggle to size licence purchases against usage peaks (think of GPU clusters that are powered on only during training windows) could find a liquid secondary market to be a strategic ally. Conversely, vendors will likely intensify technical and contractual tools – audits, hardware-locked activations, mandatory subscriptions – to protect their revenues. The final decision of the UK Supreme Court will not only affect the United Kingdom: in a global market, it will set a precedent that legal departments on both sides of the Atlantic will watch closely.