Court Says First Sale Doctrine Doesn't Apply To Licensed Software 758
An anonymous reader wrote to tell us a federal appeals court ruled today that the first sale doctrine is "unavailable to those who are only licensed to use their copies of copyrighted works." This reverses a 2008 decision from the Autodesk case, in which a man was selling used copies of AutoCAD that were not currently installed on any computers. Autodesk objected to the sales because their license agreement did not permit the transfer of ownership. Today's ruling (PDF) upholds Autodesk's claims: "We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (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. Applying our holding to Autodesk’s [software license agreement], we conclude that CTA was a licensee rather than an owner of copies of Release 14 and thus was not entitled to invoke the first sale doctrine or the essential step defense. "
Bad consequences (Score:5, Insightful)
Yay! (Score:5, Insightful)
Wait...what? Seriously?
Many industries have been trying for literally decades to prevent used or second-hand sales...but parts of the software industry are the ones to actually do it? Huzzah. That's so awesome. Thanks for fucking us over once again. Guess what people will do when they can't buy a used copy and don't have money for a new copy?
Yaargh.
Oh, crap (Score:5, Insightful)
This is a ruling that is going to spur a lot of changes to software vendors.
*everybody* will end up being "a licensee" of the software, and you will no longer own anything.
And yes, this will extend to FOSS as well... licensing through copyright is still licensing....
Do these judges even understand the enormity of their decisions?
Whatever happened to copyright? (Score:5, Insightful)
Now, while producers now have more power, consumers have less. We no longer have limited copyright, fair use is being systematically eliminated and now the first sale doctrine is being challenged.
A free market works on balance on both sides of the scale, producers and consumers both have rights. A producer has some rights to screw customers but customers have rights to balance that out by being able to screw producers in numerous ways. But that balance is being broken with copyright.
So let me get this straight... (Score:5, Insightful)
You buy something (and you *are* buying it, because the "agreement" isn't presented before the sale.)
You try to install it, and disagree with the EULA, so press "I disagree", and the software doesn't get installed.
You then sell it to try to recoup some of your lost money.
But you can't, because the *agreement*, which you did not agree to says you can't.
The USA is officially the most fucked country on earth.
Re:Yay! (Score:5, Insightful)
Many industries have been trying for literally decades to prevent used or second-hand sales..
Expect an End User License Agreement with your next car or house. Car manufacturers and home builders would love that.
Used video games (Score:3, Insightful)
It will be interesting to see how this plays out. If this ruling holds, the used video game market is on its last legs.
Re:Oh, crap (Score:5, Insightful)
I will enjoy watching piracy numbers escalate. (Score:5, Insightful)
Makes you wonder if the software vendors have any grasp on the idea that the license having some value as a second-hand sale item is what allows them to charge such exorbitant rates in the first place.
Re:Whatever happened to copyright? (Score:0, Insightful)
Now, while producers now have more power, consumers have less.
Well, to be fair, consumers now have much more power than they used to; namely, the power to duplicate and distribute an endless number of copies of whatever the producer was selling. Idiotic rulings like this one are basically misguided attempts by elderly judges to restore what they think will be a level playing field.
Time to Burn Down the Supreme Court (Score:2, Insightful)
Unless you like living as a Serf of the Corporations who aren't even MENTIONED in the US Constitution, it's time to consider revolution.
That really sucks. (Score:2, Insightful)
Re:Not Quite (Score:3, Insightful)
Re:Oh, crap (Score:4, Insightful)
This is a ruling that is going to spur a lot of changes to software vendors.
*everybody* will end up being "a licensee" of the software, and you will no longer own anything.
And how, exactly, is this a change? What software do you currently have that's not licensed to you rather than sold?
I'm not saying it's right - I'm just saying I don't expect changes as a result of this ruling because this is pretty much what every software company does already.
Re:Not Quite (Score:3, Insightful)
This sort of licence will start to fade as more and more Open Source projects attain "enterprise quality".
Good luck with that. Everything from Starcraft 2 to your small business accounting software has a click through EULA. FOSS is great, but its not going to fill every niche ever. Its progress in accounting is glacial. And while there are FOSS games, the bulk of major development is and will remain proprietary for the foreseeable future. That is just 2 examples.
For another example -- while FOSS forms the guts of most Virtualization schemes, the proprietary software you need to pile on to really work with them in a serious way is not at all threatened by FOSS alternatives.
Tell these software houses that still use this sort of licence to hit the road.
If you can afford to stop using proprietary software great. Most of us don't really have that option.
Re:Used video games (Score:4, Insightful)
OTOH piracy will gain a boost.
Re:Bad consequences (Score:5, Insightful)
Just wait until publishers of physical books and magazines add a 'license agreement' to the first page.
This ruling has the potential to strip the right of first sale from all future books, magazines, CDs, DVDs, etc.
Worth nothing then.. (Score:1, Insightful)
One more reason not to pay ANYTHING for proprietary software or content..
It is worth nothing when you need to resell it, why should you pay more than nothing for it in the first place?
Re:So let me get this straight... (Score:5, Insightful)
Not quite. Essentially, when you handed over the money, the transaction wasn't complete, because you didn't accept the contract yet. Without that, whatever you paid for is still not yours.
The joy of contract law.
Re:Yay! (Score:3, Insightful)
Well what about software delivered on a piece of hardware? Like a game cartridge.
This just opens up the doors for companies like Nintendo and their ilk to disallow the used game market to exist. Hooray, one more way to fuck over consumers.
Re:9th Circuit (Score:4, Insightful)
It kind of makes sense, you should be able to license software to somebody, just like you should be able to rent a car to someone. The problem is (in my opinion) it should require more than a EULA stuffed in a box, or that you click on, to bind you to such a contract. If you sell something by selling it like an object, people are going to have a reasonable expectation that they bought it.
Re:Yay! (Score:5, Insightful)
Piss on that, and piss on the Ninth Circuit (in whose jurisdiction I do not reside). What I buy is a copy of a piece of software. The thing in the box is merely an impermissible attempt to restrict my rights post sale.
It's in the copyright code, 17 USC 109.
Re:EULA-mania (Score:5, Insightful)
Used "Iron Man" DVD case for sale: $6.00 - DVD thrown in for free!
Re:Used video games (Score:1, Insightful)
Posting as AC because I already moderated this thread.
This ruling is much more likely to affect the PC game market than the console market in the near term because console games do not, as yet, require installation before you begin playing them. An installation process means an opportunity for the publisher to foist a license on you before you can play. Now that HDDs and network connections are a standard part of the modern console, however, I wouldn't be surprised if the next generation required installation, on-line activation, tethering to your XBL/PSN account, etc. Which means the death of the used market. Of course, we were moving in that direction anyway; this ruling is just another nail in the coffin.
I can't see how EULAs can be enforceable... (Score:4, Insightful)
Re:Time to Burn Down the Supreme Court (Score:4, Insightful)
I wish this wasn't modded flamebait. You folks should realize that revolution doesn't necessarily mean flag burning and civil war. It does mean that you have to gather enough popular support to oust the current government though.
Revolution CAN be peaceful. It will always cause upheaval, but if the system is broken enough, it needs to be thrown out and rebuilt.
Not that I'm saying its necessarily time for Americans to do so, or that this is the sort of issue that should cause a revolution, but there are more than just this fellow that seem to feel that one is necessary, on both sides of the political spectrum.
Re:Oh, crap (Score:3, Insightful)
There is a third option: They do, but they also recognize that they are bound to make their rulings based on what the law is, not on what it "should" be.
Re:Bad consequences (Score:5, Insightful)
Also, I'd like for it to now be legally disallowed to use the term "buy software" in a commercial context as it no longer applies and would falsely advertise what it is that we "purchase".
Re:So let me get this straight... (Score:3, Insightful)
Re:Bad consequences (Score:5, Insightful)
Reductum ad absurdum is not simply a logical argument but an overall strategy
It's hard to reduce to absurdity that which is already absurd. Copyright and patent law has been absurd for decades.
Re:Yay! (Score:4, Insightful)
Do you run AutoCAD solely from the DVD or do you install a copy on your machine?
Will the publisher... (Score:3, Insightful)
Re:Yay! (Score:3, Insightful)
oh well, a panel at PAX you say! why then it's settled~ A bunch of people gathered around in an effort off grand wankary doesn't mean shit.
How about we wait until it's goes all the way through the courts instead off letting a bunch of people riding on Penny-Arcade coat tales dictate when the court means.
BTW, buying the software is agreeing to the EULA.
This will just spur an increase in piracy. (Score:3, Insightful)
If they are going to disallow sale of licensed software, then unlicensed software (read: pirated) can easily have more value to a user than the licensed work.
I'm not saying that the increase piracy is justified, but it's an inevitable result.
Re:Bad consequences (Score:5, Insightful)
Not unless the license allows you to install it on multiple devices. Typically they do not or only allow a limited number of copies.
If you lose your licensed copy- instead of replacing it, you are usually screwed.
This could be a value add for the companies but instead they use it as a hammer. It could be, "once you license this song, you can download it to any new computers or other devices for life. And the storage fee will only run you $20 a month for an unlimited number of movies and songs." Put a reasonable download limit of once per quarter on it to avoid obvious abuse.
But what they really want is to RENT it to you. You pay for the content every time you use it/play it. Microsoft has said openly they want you to "subscribe" to office.
Re:So let me get this straight... (Score:4, Insightful)
This is inaccurate. A typical purchase of boxed software has two parts. First, you buy the box. That transaction is between you and the retailer, and it is complete when you pay for the box. The box will typically include a notice that installing the software requires accepting the terms of a license. This ruling does not affect that transaction. You are free to transfer the box to someone else because you are not yet bound by the license.
Second, you install the software, which includes accepting the terms of the license. This ruling says that, at least under certain circumstances, once the license has been accepted, the user is a licensee, not an owner of a copy, and must abide by the terms of the license.
Note that just because you can transfer the box to someone after step 1 does not mean that the transferee will be able to accept the license. For example, if you buy the student version of a program and sell the box to a non-student, that non-student will be legally precluded from accepting the terms of the license agreement, assuming the license specifies that it is only to be used by students.
Re:Yay! (Score:3, Insightful)
As long as the HOA is legitimately providing services, there's nothing inherently wrong with it. It just isn't necessarily the best thing. It does however have the bight side of discouraging people from flipping the real estate on a regular basis.
Re:Whatever happened to copyright? (Score:3, Insightful)
Or even other goods (Score:4, Insightful)
Suppose you buy an expensive piece of industrial equipment. Once you get it home, you open the box and an EULA falls out. It says you didn't buy the device, you licensed the ability to use it. It says you may not sell the device, or return it for a refund, it is yours now once and for all time. Further, you agree that you can't sue for any injury that happens, even if such an injury is a result of a defect in manufacturing.
How would that be any different? How would that be at all legal, based on existing contract law?
This could be the end of culture. (Score:4, Insightful)
Libraries are now required to predict, in advance, which video games and other licensed media will be culturally significant in the future.
If they fail to buy a copy of a product while it is on store shelves, there is now no legal way for them to preserve it for posterity, since the people who did buy it are not allowed to transfer ownership.
Ah well, back to reading the works of authors like Shakespeare who were somehow inspired to expend massive effort on creating amazing intellectual works despite the lack of any effective copyright protection whatsoever. (Still waiting for you to explain that, copyright lobby ...)
Re:This will just spur an increase in piracy. (Score:3, Insightful)
If they are going to disallow sale of licensed software, then unlicensed software (read: pirated) can easily have more value to a user than the licensed work.
I'm not saying that the increase piracy is justified, but it's an inevitable result.
Let me put it this way, if copyright is supposed to be a deal between copyright holders and society it has turned into a slave contract. I'll just treat it as such.
But you can't get a refund (Score:5, Insightful)
Try taking software back to a store. Say you didn't like the license and want a refund. They'll tell you "No refunds on opened software, exchanges only." Of course you can fight that but it takes time and money.
Re:Bad consequences (Score:5, Insightful)
The problem is that once you have it applying to things like books, it will be much easier for the software/music lobbyists to pitch a bill that limits the practice to just digital stuff as a "compromise". We call it politics for a reason. Rarely does any one party in a contentious issue get everything they want from new legislation and the only way for the whole system to work is for the people writing and voting on the bills to agree to concessions. The further you let them push it before clamping down in it, the further in their favor the final law is likely to be.
Re:Bad consequences (Score:3, Insightful)
Just add a note to the back of your dollar bills indicating that the money is just licensed and may not be passed on to another user in exchange for goods or services.
See how they like them apples...
(I do wonder though why a software publisher who sells their product through a retailer figures that they have any business relationship with me at all.)
Ninth Circut (Score:3, Insightful)
No wonder. No other court is filled with more ignorant and corrupt judges.
Re:Bad consequences (Score:5, Insightful)
I'll miss libraries when they're gone. :(
Publishers are gradually changing to e-books anyway and they've never liked libraries, now they just have to make one of the terms of the license that you can't loan books.
Re:Bad consequences (Score:3, Insightful)
you always have the option to not buy something if you dont agree to the terms
I'll remember that when the store arrests me for ripping open boxes of software to read the terms before I buy it.
These days I'd probably even have to put the CD in my computer before I get to see the license agreement. Almost nothing ships with printed manuals anymore.
Re:Anyone Read It? (Score:5, Insightful)
I guess in my opinion CTA is the one in the wrong. CTA broke a contract, not Vernor. I could agree with CTA getting sued for the ~3k/seat for their ill gotten copies (plus punitive, etc). As I see it, the sold software was not illegal for Vernor to buy and resell, but was illegal for CTA to sell.
I'm curious to know if the same rules should apply as to passing on endorsed checks as software, where no matter the interim steps a legally signed check is still valid by whoever cashes it in (i.e. interim illegal activities don't make the check null and void).
Clearly I am not a lawyer...
Re:Yay! (Score:3, Insightful)
I bought the physical media. I don't need a copyright license to do that. And now owning a "copy" (defined in 17 USC 101 to be the physical media), I have the right per 17 USC 117 to install and run the software on that copy.
Re:Bad consequences (Score:3, Insightful)
There's nothing where single-license purchasing is the norm. You simply don't need a license to use a copyrighted work, only to duplicate it in a lasting medium. If you buy a copy you've got unlimited use rights, excepting a few copyright exceptions such as public performance, etc.
In the case where these works purport to come with a license, often packed as an EULA, they aren't valid because they're post-agreement modifications.
If you don't know you licensed a work, you did not. It cannot happen accidentally.
Re:Bad consequences (Score:3, Insightful)
As long as it was just copyright extensions, even if it was the Mickey Mouse protection act, that didn't bug me so badly. It's all the absurd crap they're trying to pull to preserve copyright as a system that does and that's really just in the last decade or two.
Re:Yay! (Score:3, Insightful)
Re:Yay! (Score:3, Insightful)
I figure it will take about 10 seconds for someone at VISA to realize that they can charge the Merchant a little bit more to have that signature cover a licensing agreement.
And then watch it go away again as Best Buy/Walmart/Staples/etc.. realize that some people WILL hold up the line for 20 minutes to read the fucking things.
Re:In my best Morbo voice (Score:3, Insightful)
And of course, you've got to be careful; the last time that was tried, we got UCITA, which would have been even more one-sided against people.
That seems to be the major problem with any kind of reform, nowadays. As soon as you start the process, special-interest types immediately being to try and corrupt it. I see a lot of things wrong with the patent system, for example, but I'm afraid that any attempt by Congress to "fix" it will leave us worse off than we are now. After all, they're the outfit that got us into this mess, I see little reason to trust them to make amends.
Re:Bad consequences (Score:5, Insightful)
It surely is relevant to the issue of shrinkwrap licensing. In the absence of a valid EULA to strip license, Vernor bought a non-infringing copy. I think it's plain software sold from publisher to end-user with no valid extra contract provisions attached is both implicitly licensed (warranty of merchantability, if nothing else) and that the media is resellable (first sale). ]
For this judgment to be valid, the EULA has to be upheld. AFAIK, that's a new horizon for the 9th District.
Re:Bad consequences (Score:5, Insightful)
> Had the wholesalers violated the license, any copies sold to
> the defendants subsequent to the violation would have been infringing,
> and the first-sale doctrine would not have applied.
I have a bit of trouble with this one... You're talking about copies being sold when, in fact, neither the wholesalers nor the retailers were selling anything other than the physical things delivered unaltered by the publisher (who, for sake of argument, we'll assume was providing authorized copies). I fail to see where copyright could have been infringed. If you s/wholesalers/printers/, sure, I'd buy the argument, since the printer would be the ones making copies under license, but it's a completely different scenario when you talk about those who just act as conduits for physical goods.
Re:Change you can believe in. (Score:1, Insightful)
George W Bush, who appointed 2 of these 3 judges, is suddenly a liberal?
Comment removed (Score:5, Insightful)
Re:Bad consequences (Score:5, Insightful)
Re:Bad consequences (Score:3, Insightful)
Hmmm... that's a good point. While this court case seems make it illegal to give software licenses away (just as it does for selling them), how can it prevent people from simply giving each other the manuals, install discs, etc.? It's up to the recipient if they install them or not. While they would be in breach of the license terms if they did, that's their problem.
Of course, the way things are going now, they'll probably make it a criminal action to use unlicensed software, and we'll probably have a special division of the FBI to run around and raid peoples' homes, looking for unlicensed software. Meanwhile, the missing persons (or worse, missing childrens) division will be chronically understaffed and unable to locate missing children in time, but the copyright division will be well-staffed.
Re:So let me get this straight... (Score:3, Insightful)
The problem with this analysis is that the box typically includes a shiny disc. When I buy the software from the retailer, I buy not just the box, but the shiny disc contained therein. The shiny disc is, according to 17 USC 101, a copy of a work of software, made with the authorization of the copyright holder. The copyright holder sold that shiny-disc-in-a-box to the retailer, who then sold it to me. I now have the right as the owner of the shiny disc to install that software (17 USC 117) or to resell it (17 USC 109). The Ninth Circuit chose to ignore all that and accept that a simple statement from the manufacturer that software is licensed and not sold makes it so. In doing so, they even ignored their own precedent on movie prints, which had a few more rational tests as to whether a transaction was a license or a sale.
Re:Yay! (Score:4, Insightful)
Re:Bad consequences (Score:5, Insightful)
Also, I'd like for it to now be legally disallowed to use the term "buy software" in a commercial context as it no longer applies and would falsely advertise what it is that we "purchase".
Seriously. If a person watches a commercial that says a product is for "sale". They go into the store and see a "sale" sign for the product. They then take the product to the cash register and offer to "buy" the product. The cashier runs the transaction, takes their money, and hands them a "sales receipt". How is this not a SALE of the product?
Re:Bad consequences (Score:3, Insightful)
I have thousands of books, CDs, vinyl, and none of them have a EULA that prohibits me from selling any of it at all.
That's only because publishers didn't think they could get away with using one. They can always add a retroactive EULA to your books, CDs, and records any time they want. But you say that you never saw or agreed to any EULA? That's right. Neither did the buyer of the Autodesk Software. The box was unopened.
Re:Yay! (Score:1, Insightful)
Since, I can do whatever I wish to the box. I can then sell the box to the next person. Tim S.
Maybe, but... that person cannot use the software in the box, because they did not acquire a legal license from the licensee. Only you did.
Re:Bad consequences (Score:3, Insightful)
why should you feel like a criminal? Buy the software, do what you like, and if it pisses off a bunch of shitty lawyers too bad. Just because a bunch of greedy shit heads want to make everything illegal doesn't mean you should feel bad for doing something you would have done anyway. It's not like you're murdering puppies or anything... are you?
Re:Bad consequences (Score:5, Insightful)
So, uh, the retroactive copyright extensions [wikipedia.org] didn't happen?
Re:Bad consequences (Score:3, Insightful)
"Really? Doing marches, protesting and that stuff won't work?"
Ah hahahahaha!
When in the last two or three decades has that achieved anything?
Hell, between 1 and 2 million people took to the streets of London to protest the upcoming Iraq War, they were totally and utterly ignored.
Re:Bad consequences (Score:4, Insightful)
``You know, as much as I hate to agree with FLOSSies on...well pretty much anything, I have to say RMS is looking spot on with his right to read [gnu.org] story.''
Indeed. The beauty is that you don't have to like someone to agree with them, and you don't have to agree with them for them to have a point.
It's scary that, although The Right to Read seemed like a whacky conspiracy theory when I first read it, things have rapidly changed to make it a reality since.
Re:Bad consequences (Score:5, Insightful)
You know, as much as I hate to agree with FLOSSies on...well pretty much anything, I have to say RMS is looking spot on with his right to read [gnu.org] story. The most basic fundamental rights we have enjoyed for centuries are being taken away by a bunch of weasel lawyers and corrupt officials. Sadly there ain't a damned thing we can do about it either, unless someone here has a couple of billion lying around to buy some politicians with?
Really? Doing marches, protesting and that stuff won't work?
You do realize the one thing the government is afraid of is it's people taking to the streets to voice their unapproval?
It's true: governments will respond to gigantic throngs of penniless people angrily protesting nearby. But to recognize that is not to deny the even more abundant truth that governments will respond to miniscule numbers of rich assholes quietly greasing palms. The ratio of rich fucks versus poor saps that it takes to move government is, what, something like 1-to-100,000-. I absolutely believe that 3,000 of the richest and best connected people in the USA could outweigh every single last one of the rest of us on a policy issue such as copyright reform. So, what I'm saying is, good luck getting your protest participation to the 99.999% level, and if you can't, then I'd rely on big money to get the way you want.
Why aren't the license terms visible on packaging? (Score:3, Insightful)
Comment removed (Score:5, Insightful)