Posted on 09/21/2010 8:27:07 AM PDT by ShadowAce
In a major blow to user rights, the Ninth Circuit Court of Appeals has issued a decision that will go a long way toward ensuring that software buyers will rarely be software owners.
In a triumph of legal formalism over reality, the Court held that the copyright’s first sale doctrine – the law that allows you to resell books and that protects libraries and archives from claims of copyright infringement – doesn’t apply to software (and possibly DVDs, CDs and other “licensed” content) as long as the vendor saddles the transfer with enough restrictions to transform what the buyer may think is sale into a mere license.
Here's the back story: Timothy Vernor bought four packages of Autodesk's AutoCAD software at a garage sale and tried to sell them on eBay. Autodesk threatened Mr. Vernor with a copyright lawsuit, claiming that its software is only “licensed,” never sold and pointing to the fine print on the agreement it had with the original purchaser. With the assistance of the public interest litigators at Public Citizen, Vernor filed suit in Seattle against Autodesk, asking the court to clarify his right to resell the AutoCAD software packages that he paid good money for. He prevailed before the district court in 2009, prompting Autodesk to appeal.
Autodesk insisted that its software was “licensed,” rather than sold, and thus the original purchaser never “owned” it and neither could Mr. Vernor. And since Vernor didn’t own the software, Autodesk argued, his attempted sale of the software violated copyright law
EFF—joined by the Consumer Federation of America, the American Library Association, Association of Research Libraries, Association of College and Research Libraries, U.S. Public Interest Research Group, and Public Knowledge—filed an amicus brief supporting Mr. Vernor, arguing that copyright owners should not be able to trump the first sale doctrine by using a few “magic words” in a “license agreement.”
Unfortunately, the court agreed with Autodesk, holding that
"a software user is a licensee rather than an owner of a copy where the copyright owner, in the documents included with the software packaging, (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions."
In other words, the right “magic words” can turn unsuspecting buyers into renters, which means they can’t claim the longstanding protections owners normally get, such as the right to resell their legally purchased software when they are done with it.
This decision is deeply disappointing, and it is very bad news for consumers. By undermining the crucial balance between copyright owners and users that supports used bookstores, libraries, and DVD rentals, it hurts both our ability to save a few dollars and our ability to retain, archive and access older, out-of-print materials. Libraries and second-hand sellers are often the only hope for these materials and the “long tail” community of researchers, historians and hobbyists that value them.
But the potential effects of this decision don’t stop there: it risks creating a situation in which violating contracts and end-user license agreements (EULAs) could result in a copyright infringement lawsuit (with the heavy club of statutory damages, attorneys fees and low standards for injunctions) rather than just a simple breach of contract claim.
We understand Mr. Vernor may seek en banc review of this decision, which means the entire court will hear the case and could reverse this dangerous ruling. We hope that the court agrees to review the case and treats it as an opportunity to put consumer rights and expectations ahead of the overreaching demands of software vendors.
This is ridiculous. The First Sale Doctrine has existed for hundreds of years. Nothing is so special that it should be exempt from it.
Can you sell your driver’s license?
Even if you paid for it?
Also, with that license, I expect free replacements when that media goes bad.
Good luck with that!
“If we now just license software, can we sell the media? “
You should be able to sell it - just as you could sell the box. But no one could use the code.
I agree. But try using that argument with Microsoft when you call them to get a copy of the install disk for WinXP after you've purchased your new PC.
Exactly. We need to frame this as a loss for the software makers somehow. We need to "accept" the terms that it *is* just a license, then hold them legally accountable with those laws that will cost them more money in the long run.
I'm not sure yet how to do that. Any ideas?
Not quite sure, but I think it’ll involve a lengthy and expensive court battle.
APf
Are you seriously trying to make that parallel?
APf
Can you sell your rented apartment?
With software, you buy a single owner right to use, not the software itself.
If you don’t like the deal, don’t license the software.
Very, very bad decision. There is almost no balance left in copyright as the Founders intended.
If the packages were never opened the buyer could not have completed the EULA. There was no license agreement. I doubt that simply purchasing the package constitutes a license agreement. I smell judicial activism.
Even if the decision went the other way, software companies will survive.
They’ll just triple or quadruple the price of the software for the probability weighted number of subsequent transactions.
You won’t like the original price, but you can then transfer it.
2 things to say...
1) can books now do this and prevent them from being placed in a library or shared with another person?
2) the User agreement is only agreed to AFTER you purchase it and open it, so it’s not fair in that way either. I guess if I signed a contract when I bought it that it was a lease then sure I guess I have a contract. But putting that in after I bought it isn’t right on so many levels.
You buy a single copy of the software. Just like a book, you don't own the right to copy the book (the copyright) for others, you only own that copy. Here the 9th is saying you don't even own that copy.
If you don’t like the deal, don’t license the software.
Copyright doesn't work under the same rules as real property. Copyright consists only of those rights granted to the authors by the government. There is no natural right to own such works.
Exactly. And with any other type of purchased rights, there should be no problem with me selling those rights to another entity should I choose to do so, provided I do not continue to use the software after that time.
Software lawyers will write contracts that accomplish exactly what they need the contracts to accomplish. Single licensee use.
Whether covered by copyright law or not, executable code will be restricted by that contract to single user, or the contract will be changed to ensure that is exactly what is allowed.
Otherwise, nobody can create software. The $100M to develop code would be worth only one sale, after which, the code will just travel the globe....
Software companies’ economic models cannot allow that to happen.
Or, code will only be rented on a month to month basis. There’s a solution for everything.
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