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The Courts Government News

Software Transferability? (or the lack of it) 471

BarefootClown asks: "We've all seen the stories about Microsoft forcing eBay to remove auctions hawking their software. Microsoft is certainly the most visible target, but there are others. Most every EULA includes a clause forbidding the transfer of ownership of software (there are exceptions, of course, and kudos to them). My question is, have these clauses been upheld in court?" What is so special about software (and their licenses), that allows it to avoid the protections consumers enjoy from more tangible products?

"I seem to recall hearing stories of courts overturning these schemes; does anybody have any specifics? Cases/judicial opinions, perhaps? I've checked FindLaw, Google, and others, but haven't found anything (haven't found anything upholding them, either...). Have these clauses ever even been to court, or do the companies just depend on FUD to bludgeon the end user into compliance? Anybody with experience, I'd love to hear it. Lawyers, your opinions? (Lawyers, would you be willing to fight one out in court, if given the chance?)"

As many of you may know, the concept of "owning" software is fallacy. You own nothing. What you do posess when you purchase your new piece of commercial software, is a corporate-skewed set of limited-use rights, which are getting more and more limited each day. For those interested, the latest print issue of Wired (October, 2001) has a big "article" on this (see p.170). It attempts to illustrate thru humorous example, what software has been seriously doing for decades.

No one would own (or lease) a car if the contract said, "You must not sell this car, in the event this car is no longer used, send it to the nearest junkyard.", so why is this true for software?

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Software Transferability? (or the lack of it)

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  • We shouldn't worry about that GPL 'virus'.
  • because... (Score:4, Funny)

    by spacefem ( 443435 ) on Thursday September 27, 2001 @10:36AM (#2358695) Homepage
    Software is like prostitution. You got the product. You sell the product. You still got the product. The consumer doesn't get money back just because he's done with the product, it's a totally different concept than just buying tangible things.
    • by Anonymous Coward
      And like prostitution, you sometimes get a little extra lasting effect, viral or otherwise. Just like IIS.
    • Ahhhh (Score:3, Funny)

      by drodver ( 410899 )
      So that explains why I feel so dirty after buying software!
    • Re:because... (Score:5, Insightful)

      by Anonymous Coward on Thursday September 27, 2001 @10:55AM (#2358816)
      Well, close, but not quite.

      Yes, MS can keep on selling the product, just like a prostitute can. However, the sale of software concerns a tangible good, whereas prostitution is a *service*.

      Since software is a tangible good, it is possible for the consumer to recover part of their initial investment by reselling ("transferring") it to someone else. This is what is prohibited by the EULAs, since the software vendors a) don't want old copies of their software out there and b) want everyone to upgrade to the latest version of everything.

      Since "transfer of title" clauses in EULAs have largely been ignored by consumers and unenforced by the courts and software manufacturers, they are now trying to figure out how they can accomplish a) and b). The answer is software *services*, or the ASP model. By doing this, everyone signs a contract saying "for $xxx my 50 employees can use Office 2005 for 1 year." Since the software is never distributed on CD-ROM, the service is never placed into a form that people can resell (transfer). Since people are forced to go to the manufacturer for the software, and since the manufacturer determines what versions are available when, for how long, and at what cost, they can accomplish both a) and b).
      • Re:because... (Score:5, Interesting)

        by Alien54 ( 180860 ) on Thursday September 27, 2001 @11:42AM (#2359055) Journal
        Since the software is never distributed on CD-ROM, the service is never placed into a form that people can resell (transfer). Since people are forced to go to the manufacturer for the software, and since the manufacturer determines what versions are available when, for how long, and at what cost, they can accomplish both a) and b).

        You know that someone is going to come along with a remake of the infamous Apple 1984 commercial, promoting a rebellion against the Beast. Maybe with a take on the old myths of hell, where all of the people think they are eating the finest grub, but instead are revealed to be eating ashes and slime from the Abyss. The number of Advertising campaigns that could be mocked up around this are amazing.

        And irony of Ironies, they could even be paid for by IBM. I can even imagine a voice over that says something like "hey we thought we were evil. Then we met Microsoft, evil on a scale that is simply awe-inspiring." Or mock commercials with the Ferengi advertising for Microsoft .Net

        All you have to do is push the idea of "Don't Get Suckered by Microsoft!"

    • by Dman33 ( 110217 ) on Thursday September 27, 2001 @11:07AM (#2358845)
      So, is your software 'free' as in beer?

      Uh, no. It is costs money as in prostitute.
      • So what you're saying is,

        There's nothing more expensive than free software.

        --Blair
        "Except maybe an equity position in a can't-miss internet opportunity."
    • by Merk ( 25521 ) on Thursday September 27, 2001 @11:09AM (#2358853) Homepage

      But what about the nice box (ahem) that software comes (ahem) in? What about the manuals, the CD, and all the other goodies you get in a box of software? Why do you get it in a store, see a price sticker on it, give a cashier money for it, and walk out with it?

      MS wants software to be prostitution. They want you to pay each time you use it, and they want the US legal system to be their pimp.

      Chances are, whether we like it or lot, they'll get to do that. If we're lucky, however, there will be some alternatives in the form of Free software.

      The problem, as I see it, is that right now software is more like marriage. You find what you want, pay a big up-front cost -- the wedding -- and make a commitment for life. When new, improved versions become available you can go through a long, involved process to get them, but you can't recoup the original cost of the wedding. If someone wants your old version, you can't just give it to them, they have to pay for a wedding too.

      • > MS wants software to be prostitution.

        Open Source is easy, as in promiscuous.

        > [MS] want the US legal system to be their pimp.

        Linus wants you to sleep around.

        Regards, Ralph.
      • by trcooper ( 18794 ) <coop@@@redout...org> on Thursday September 27, 2001 @12:41PM (#2359433) Homepage
        Hmmm... I like that comparison... MS is the whore who'll let you do anything you want to with them, so long you pony up the cash...

        But you can do all this yourself by writing your own software...several times a day...and...if you get tired of that, you can get married to the GPL...but then you just have to put up with that nagging bitch (RMS) all the time.

        Ok... back to 'writing software'
    • well if it's because you were able to get things done with software, didn't you get from point a to point b in your car?

      if it's because you can make money with the software, doesn't your car take you to work? I don't see where this is any different.

      this seems to be companies trying to maximize their profits by 'asking for an inch.'
    • Is that because you get screwed?
    • Re:because... (Score:2, Interesting)

      The way I see it, the current EULA's assume you are a thief. In this light, it's wrong to sell the software and keep a backup. EULA's assume that everyone will do this. This may be closer to the truth, but to assume all your customers are thieves is crap.

      There should be nothing wrong with selling your copy of Word if you plan on buying a new copy or stop using Word.

      However, to keep sales up, Microsoft and others must write it into the contract that everyone must pay for the wedding whether they are divorced or not.

      MHO.
    • Re:because... (Score:5, Informative)

      by blakestah ( 91866 ) <blakestah@gmail.com> on Thursday September 27, 2001 @11:29AM (#2358978) Homepage
      Software is like prostitution. You got the product. You sell the product. You still got the product. The consumer doesn't get money back just because he's done with the product, it's a totally different concept than just buying tangible things.

      Copyright protection allows full transfer and/or resale of copyrighted material and all copies made for personal backup. Software does not get an exemption .

      In Germany, this has been further extended. You can even resell your Microsoft Windows OEM license as a full blown license, provided you transfer all copyrighted associated material.

      In the US, the issue becomes more complex for EULA protected software. One issue is that the company claims the consumer agrees to a contract he never has a chance to read before purchase. The contract allows the consumer to be refunded for the software, but not from the software owner, Microsoft. No. You have to get the refund from the resaler. In practice this does not happen so you are forced into accepting a license whose terms you cannot read before purchase.

      There is some reason to think that EULAs of this form will ultimately be stricken as illegal, and software only protected by copyright. In fact, some people think this is already the case (read http://cr.yp.to/).

      So, to sumarize, software is not like tangible things. In some views, it is just like copyright, and is completely re-sellable. Even after use.
      • Re:because... (Score:3, Insightful)

        So, to sumarize, software is not like tangible things. In some views, it is just like copyright, and is completely re-sellable. Even after use.

        Ahh, but here is the catch. The EULA license agreement was not between you and microsoft, but rather between Microsoft and your OEM. So in actuality if you sell your copy, oops I mean the OEM's copy of windows you commit theft. Your OEM paid for each os install and agreed to be bound by the EULA. The EULA agreement was provided by Microsoft as a service for OEM's, and not individuals to provide an OS for customers. This loophole means as a consumer you are powerless under protection of various consumer laws including first sale doctrine. After all, you never really paid for it. Your OEM is the true consumer who is eligable under these specific laws. Obviously the OEM's will not protest to the government. So your OEM is legally allowed to sell their copy of windows but if they do, MS will stop selling them any more copies. You legally have no protection at all whatsoever unless you buy the more expensive non OEM version. Oh wait! You agreed under the EULA not to do this when you bought it yourself! Remember if you buy it yourself then you must agree to the EULA. Great legal loophole, hu. :-)

        It seems those guys at Microsoft really put alot of effort and thought thru this to get away with everything from consumer protection laws, to first point of sale laws, to even wiping out potential competitors by having the OEM's decide for consumers which OS we use. Very clever trick. Bill Gates was a law student at Harvard before he left to found Microsoft. I am sure he learned some these tricks through there as well from his father who is a very sucessfull lawyer.

    • Software is like prostitution. You got the product. You sell the product. You still got the product.

      There are plenty of instances where this simply isn't true. I remember a few months back when some university or lab was selling an old Cray computer of theirs. The computer required a proprietary OS to operate, and they had a licensed copy (which cost them a buttload.) Unfortunately, they couldn't sell it to the new potential owner because of the licensing restrictions. In effect, they were left holding a $200,000 set of disks that were useless without the computer. At the same time, the new customers were forced to go deep into the hole to purchase this exact same software from the company.

      Seems like there're no issues there. In any case, software companies are developing increasingly sophisticated licensing and copy-protection systems for their products. If these systems work as advertised, one person can't copy the product and sell it off to somebody else. Of course all of these can be broken, but they can be broken regardless of whether software sales are allowed or not.

      To me, it seems like you could say exactly the same thing about a book or a CD. Both can be copied before being resold.

    • You've thought about this way too much. And it shows. ;)
    • Clearly Microsoft (and most of the software industry, not to single out just Microsoft.)is trying to have it both ways. They want to sell it like a product, but continue to collect revenue on it like a service. Another model says give away the software, and sell the service. Unfortunately that model hasn't worked very profitably so far.

      But just because the 'software as a service' model hasn't worked yet doesn't mean it's wrong. Nor does it make 'software as a tangible good' or 'software as a tangible + continuing revenue' good.

      In practice, it appears that after taking a considerable amount of time to bring a given piece of software up-to-snuff, it really is mostly done. Then, in order to treat it as a 'tangible + continuing revenue' product, you have to keep overdeveloping it, adding features and junk to 'justify' the continuing revenue stream. Hence the mess we call MS Word today, dancing paperclips and all.

      The historical side of all of this is that software is sufficiently new, and the hardware it sits on has evolved so much that we've barely reached 'maturity' on anything. So thus far, software has had the appearance of tangible goods. I suspect that MS Office may be one of the few/first pieces of software to move past that category.

      We're really talking about something fundamentally new in the past 20 years: Revenue for IP. Up until 20 +/- years ago, IP was sufficiently bound into some form of matter (books, records, etc) that it wasn't commonly distinguished from something physical. Now it is, due to super-cheap media like CDs and the ease of electronic distribution of the Internet.

      Publishing (music, text, software, what-have-you) has always had two aspects, content creation and duplication/distribution. In a very fundamental way, the duplication/distribution part of the publishing industry is as obsolete as a buggy whip. But the duplication/distribution side is where most of the publicly perceived value lies.

      Therefore the publishing industry is hanging on to that role as hard as they can, trying to keep their buggy-whip in the pre-automotive model, and using the government and copyright law to do it.

      They're simply making too much money to let go of that revenue stream.

      Same as prostitution.
  • by Anonymous Coward on Thursday September 27, 2001 @10:37AM (#2358699)
    i recently transferred several copies on windows to my garbage...no problems, no visits from the police. it keeps the vagrants out of your trash too.
  • copying (Score:2, Redundant)

    Well, for one thing, you can't make a perfect copy of the car to keep and then sell the original. You can with software. I'm not agreeing with the liscensing restrictions, but there is a difference between the nature of the products.
    • Re:copying (Score:5, Insightful)

      by swordgeek ( 112599 ) on Thursday September 27, 2001 @10:43AM (#2358734) Journal
      However, at present you can legally resell music that you legitimately buy, and you definitely can make a perfect copy of an audio CD.

      The only think that makes software 'special' is the license agreement saying, "You don't own this item. You have the right to use the contents of it according to our restrictions, and exactly nothing else."

      That's the key--not the copyability of it.
    • But that process is a duplication without intent to keep as a legal backup. Which is already illegal. The licenses don't need to account for those. I think the real issue is not the sale of the software for itself, but the transfer of hte license. As soon as you register that software with their database, though the net or whatever, that license number is associated with you. Again, not saying that I agree with it, but the way the current licensing setup works with most of these companies, it becomes very difficult to argue something without them giving a just as valid counter argument. (even if it's not a truthful one)
    • Re:copying (Score:2, Interesting)

      by Ser\/o ( 105187 )
      Just because someone can, doesn't mean they will. If that were true, the world would be a lot less crowded. It's hard for me to stomach the accusation that I WILL do something illegal just because the possibility for it exists. I CAN steal a car, I CAN 'clear' my workplace of annoyances, I CAN copy CDs. . .

      I shouldn't be punished purely because I may do something I shouldn't. Let me at least have the chance to fuck up first...sheesh.

  • by frleong ( 241095 ) on Thursday September 27, 2001 @10:38AM (#2358703)
    The reason MS stopped those auctions is because most of them are pirated software. Or it is software licensed to OEM (you cannot separate the software bundled with the hardware) at a much lower price. If it is a shrink wrap package, I don't think you have a problem reselling.
    • by maetenloch ( 181291 ) on Thursday September 27, 2001 @11:25AM (#2358946)
      The reason MS stopped those auctions is because most of them are pirated software. Or it is software licensed to OEM (you cannot separate the software bundled with the hardware) at a much lower price. If it is a shrink wrap package, I don't think you have a problem reselling.

      Just because the shrink wrap packaging has been removed doesn't mean that it's pirated. I tried to sell an old personal copy of Office 97 on Ebay, and Microsoft had the auction stopped. And my copy of Office was not a pirated copy - I bought it directly from a store. There is an appeals process where you can get Microsoft to allow the auction to be reinstated. Unfortunately Microsoft wanted me to show them the original receipt (which I don't have anymore). They also demand that when you sell Microsofot software, you must include *all* the original packaging including the box. Basically they stop all non-shrinkwrapped auctions of Microsoft software, and make the seller prove it's legit. Bastard jerks. They deserve all the piracy they get after this.
      • "Unfortunately Microsoft wanted me to show them the original receipt (which I don't have anymore). They also demand that when you sell Microsofot software, you must include *all* the original packaging including the box. Basically they stop all non-shrinkwrapped auctions of Microsoft software, and make the seller prove it's legit. Bastard jerks. They deserve all the piracy they get after this."

        I am no big fan of Micro$oft, but I have a hard time seeing what is wrong with what you describe. Propriatary software is NOT free as in beer. While IMHO (IANAL) it is (or should be)perfectly legal for the original purchaser to re-sell his product (or license), it is also perfectly reasonable for the producer to enforce his right not to be pirated. If you don't have the original box, jewel case, and receipt, you very probably DON'T have a legal copy to sell.

        I have been keeping PC software boxes and disks since 1983 (160k floppies anyone?). When we are darn sure we don't need that product anymore, we destroy it all, or sell it all in the original box. No box - no license.

        Or am I missing something?

        sPh
    • Uh Oh... You haven't been paying attention. This [slashdot.org] story from May explains how Microsoft and ebay are conspiring to make life easier for themselves. Hard to say if MS is conceding the point at hand, or if they are intentionally confusing the situation. In any case, they do not directly address what we are talking about here. The article does mention that MS is going after "infringing" software with no specific definition of what constitutes infringing.
  • by ljnelson ( 143073 ) on Thursday September 27, 2001 @10:40AM (#2358717)
    I'm not arguing that this is correct, but strictly speaking software is licensed, not sold. That means you don't own it. If you don't own it, you can't sell or resell it.

    To take an example from another arena: if I write to one of the media syndicates and get permission to use a Peanuts cartoon in some publication I'm working on, I can't then grant others access to use that cartoon, because I don't own it.

    Again, I'm not saying I agree or disagree with this particular way that people use/buy/license software.

    • by Anonymous Coward on Thursday September 27, 2001 @10:50AM (#2358791)
      That's fine then, I can't sell the software, because I don't own it. No problem, I won't sell the software, but I'll sell my license to use the software. As an added bonus, I'll give you the disks with the software on it. What's wrong with that?
    • No but you can sell the LICENSE...that is if it isn't explicitly prohibited *in* the license...which it looks like it is. So do licenses deserve the same status as property? I mean, do I *own* the license, or am I just a party to it??
    • However, that is not thew way in which most people come into contact with software.

      Software is, typically, sold just like books. You go to a store, you buy the book. Just like you go to the store, and you buy the software media.

      The book, like the media, is then owned by you. You have signed no binding contract, you are bound to no "agreements" beyond that of copyright law.

      You may not copy and redistribute the book, NOT because it says you can't in the first few pages (which it almost always does), but because copyright law says you can't.

      I would hold that this entire concept of ":licensing" and especially "shrink wrap" licensing where one is expected to be bound to a license AFTER having bought the software media in question, and without signing any formal agreement is a complete fabrication of software companies to foster this attitude.

      This goes on all the time. Hell, I have a book that I recently purchased from a major bookseller. It was written long ago and the copyright has long since expired, as such, it contains no copyright notice... however the publisher STILL put a notice in the first few pages to tell me that I may not copy this book, in whol eor in part.... a paraphgraph with exactly 0 legal force whatsoever.

      -Steve
      • No, you are wrong. Grammatical corrections AND language translation have been held by case law in the US to not be copyrightable. Books such as Moby-Dick(written in 1850-1851), under US copyright law, have no copyright protection. They are in the PUBLIC DOMAIN. You can, by law, copy them as often as you wish and mail copies to every one in the US.

        Software, when purchased in a store is exactly the same. Before you are forced to read the shrink wrap lincense but after you purchase the product, you may sell it to whoever you wish. This is assuming that the shrink wrap lincense is legally enforcible.

        UCITA legislation recently passed in Maryland and Virginia. One of the purposes of UCITA was to make shrink wrap licences legally enforcable. If you live in one of those states they are. If you don't they most likely aren't. But the courts are still wrestling with this one.

        The best thing to do is to take a little time and go research the issues. You can find the laws online(no your laws[other than building codes, but thats another story] are not copyrighted!). You can find the case law on-line. Do the research and come to your own conclusions.


    • by UnknownSoldier ( 67820 ) on Thursday September 27, 2001 @11:06AM (#2358839)
      > but strictly speaking software is licensed, not sold.
      Correct.

      > If you don't own it, you can't sell or resell it.
      That's not entirely correct - IF the contract that you signed, gives you permission to sell/resell the thing you have licensed, then you can sell/resell it.

      The contract may also be a pseudo contract ("First Sale Doctrine")
      i.e. you have the right to sell music you buy, because it is "reasonable" that buyers have the right to sell what they purchase, even though you DIDN'T sign anything claiming privileges were transfered to the buyer.

      Things to think about:

      - If you don't own the software you have licensed, do you own the car you have "licensed" as well ?
      - Who owns your time and goods, if you need a "license" to engage in business?

      Remember, what does a license mean? Legal permission to do something, that normally you wouldn't have.
      • - If you don't own the software you have licensed, do you own the car you have "licensed" as well ?
        You buy the car and own it outright. The license gives you the non-transferable right to operate the car on public roads.

        - Who owns your time and goods, if you need a "license" to engage in business?
        You do. The license gives you the non-transferable right to operate the business. I'll granted that the gubmint controls your time and goods, but they do not own them.
    • "To take an example from another arena: if I write to one of the media syndicates and get permission to use a Peanuts cartoon in some publication I'm working on, I can't then grant others access to use that cartoon, because I don't own it. "

      No, but you can sell your entire publication, including your archive of past editions containing the Peanuts cartoon, to another publisher. Generally speaking (IANAL) as long as the new owner abides by the original license (e.g. pay UFS for each back issue sold) they can't prevent this transfer.

      sPh
    • To take an example from another arena: if I write to one of the media syndicates and get permission to use a Peanuts cartoon in some publication I'm working on, I can't then grant others access to use that cartoon, because I don't own it.

      This anology isn't quite right. When you purchase software, you purchase the right to use it, not the right to dristribute it. It's more like if you bought a Peanuts book and read it. Don't you have the right to give the book to a friend?

      No lawyers are banging down the doors of used book stored, that's all I know.
    • I'm not arguing that this is correct, but strictly speaking software is licensed, not sold. That means you don't own it. If you don't own it, you can't sell or resell it.

      This makes no difference [in the UK], you own one copy of the licence, which you can [re]sell. manufacturers or retailers cannot impose limitation or conditions that counter your statutory rights. Indeed the courts take a very dim view of those that try to limit your rights through unfair trading practices.

    • Well if you pay me, I'll install MY license on your computer. I'll also leave the disks over at your place too.

      The license will still be owned by me, and it will be operated on only one computer. How is this not legal?

      In fact even though I own the license there is nothing to stop you from doing the install yourself as long as ownership of the license remains with me. This would require a bit of trust, but doesn't seem to be at odds with transferring the license.
  • Caveat Emptor (Score:3, Insightful)

    by HardCase ( 14757 ) on Thursday September 27, 2001 @10:42AM (#2358731)
    No one would own (or lease) a car if the contract said, "You must not sell this
    car, in the event this car is no longer used, send it to the nearest junkyard.", so
    why is this true for software?


    It's true for software because the buying public has come to accept it as a condition for using the software licenses that they purchase. Obviously cars aren't software, particularly since when you buy a car, you buy the car. In a way, of course, a lease is like a license to use the car and, I suppose, the lessor could put that language in the contract, but the buying public wouldn't accept it. The bottom line is the subject line.


    -h-

    • Not true (Score:2, Interesting)

      by bihoy ( 100694 )

      I certainly don't accept it. I ignore it.

      One of my favorite places to buy software
      has been at used PC shops. They often had
      quite recent copies of used software, in-the-box,
      and with all the docs.

      I don't see MS running around trying to close
      these little shops down.
    • In a way, of course, a lease is like a license to use the car and, I suppose, the lessor could put that language in the contract, but the buying public wouldn't accept it.

      They most certainly do. What car lease do you know which is transferrable? Car leases are almost always non-transferrable. They don't tell you to throw it in the trash, because not only can you not sell it, you have to keep it and make sure nothing bad happens to it. At the very most, on an open ended lease, you can return the car in perfect condition and stop paying your lease payments.

  • You only ever buy a license, never a product. That's always buried in the fine print somewhere, and is the difference that let's them restrict use 6 ways to sunday.
  • You end up licensing your dishwasher

    Your hamburger comes with an EULA
  • by tjansen ( 2845 ) on Thursday September 27, 2001 @10:44AM (#2358747) Homepage
    A German court has ruled that you can even sell your OEM versions, and Microsoft can't do anything against it (even though they tried). But in the US this is probably different, thanks to the DMCA...
    • by Masturbating Vulcan ( 524889 ) on Thursday September 27, 2001 @10:56AM (#2358824) Homepage
      A German court has ruled that you can even sell your OEM versions, and Microsoft can't do anything against it (even though they tried). But in the US this is probably different, thanks to the DMCA...

      Your facts are legitimate, but your conclusion is illegitimate and downright wrong. The DMCA is a revision to copyright law that prohibits trafficking in circumvention devices. It has nothing to do with the enforcability of End User License Agreements. There is a law which is being supported at the state level called UCITA which deals with this topic.

      Obfuscating the purpose of the DMCA lessens the logicical correctness of our argument against it and in so doing weakens our cause. In the future, please be more vigilant.
    • And in The Netherlands.
      Though I'm not absolutely sure about the latest licences, courts have in the past upheld that the licence in effect is nothing more than the right of the owner to run / use a single copy of the software at your own discretion.
      Anything else was considered frivolous.
      This means for instance that when you've bought a computer with a Dutch version of Windows there is nothing stopping you replacing it with a copied / borrowed English version. Because you do own a licence to run Windows.
      And the courts have clearly seen no tangible difference between the various language versions.
  • by swordgeek ( 112599 ) on Thursday September 27, 2001 @10:47AM (#2358765) Journal
    "Hi, my name is Bill, and this is my 900lb gorilla. Although I really don't know what he's going to do, if you do something I don't like, I'll try to make him stomp on you. Do you want to take that chance?"

    In other words, unless you are guaranteed to win the case, you're not likely to take MS to court over their license agreement. At that point, the license agreement becomes a de facto law.
  • you seem to be missing the point. you are licensing the software, not buying it. it is a strange world, when you pay someone money and they ship you a physical thing, yet you do not own that thing, you own a license to use that thing.

    i was going to ask 'imagine if computer hardware was the same way' and then i immediately realised we are definately moving in that direction. ditto for televisions, etc, anything which can access digital media.

    zero-cost duplication is a beautiful thing. too bad it would destroy most 'modern' companies ability to function.

    remember when 'modern' meant something like 'forward-thinking'? now it seems to mean the opposite. the modern age is over. something else is here, and it may be a dark age of information if these 'modern' companies are able to hold onto the past as well as they are trying to.

    -sam
    • by S.Lemmon ( 147743 ) on Thursday September 27, 2001 @11:21AM (#2358922) Homepage
      This stikes a chord. Is it just me or are we moving into a kind of digital serfdom and an age of modern feudalism? It seems big corporations want do do away with private ownership altogether. Just like the pesants of old were tied to the land the aristocrats allowed them to use, we're held prisioner to software licenses that strip us of all rights and subject us to any corporate whim.

      As long as we "know our place", pay our Microsoft tax, and don't speak against our lord and masters, they'll graciously allow us to use their software. However, anyone who dares speak out risks loosing everything.

      With no real competition, large corporations can make demands that would have been unthinkable a few years ago - all we can do is accept. In the digital age, software is no longer a luxury, and it becomes increasingly difficult to function without it. Those who control that software and can dictate the terms will have more power than any government - and who do they answer to?

      Even a land-owning aristocrat could take pity on his peasants now and again, but a corporation is a soulless entity who's only concern is maximizing profit.

  • by _|()|\| ( 159991 ) on Thursday September 27, 2001 @10:48AM (#2358772)
    You want to research the doctrine of first sale. A turn-of-the-century court case involving, essentially, EULAs in books established that a consumer has the right to transfer, in whole, a book, notwithstanding any statement to contrary by the vendor or manufacturer.

    I believe this was subsequently written into law for records, but this may have been turned on its ear by passage of UCITA, which gave EULAs teeth.

    • by bigdavex ( 155746 ) on Thursday September 27, 2001 @11:18AM (#2358898)
      Yes, it's been codified. The question, as others have pointed out, is whether of not the person owns the copy or just a liscense.
      This, I believe, is the applicable US law.

      U.S. Code, title 17, chapter, section 109 [cornell.edu]:


      US Code as of: 01/23/00

      Sec. 109. Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord

      (a) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord. Notwithstanding the preceding sentence, copies or phonorecords of works subject to restored copyright under section 104A that are manufactured before the date of restoration of copyright or, with respect to reliance parties, before publication or service of notice under section 104A(e), may be sold or otherwise disposed of without the authorization of the owner of the restored copyright for purposes of direct or indirect commercial advantage only during the 12-month period beginning on -
      (1) the date of the publication in the Federal Register of the
      notice of intent filed with the Copyright Office under section
      104A(d)(2)(A), or
      (2) the date of the receipt of actual notice served under
      section 104A(d)(2)(B), whichever occurs first.
      (b)
      (1)
      (A) Notwithstanding the provisions of subsection (a), unless authorized by the owners of copyright in the sound recording or the owner of copyright in a computer program (including any tape, disk, or other medium embodying such program), and in the case of a sound recording in the musical works embodied therein, neither the owner of a particular phonorecord nor any person in possession of a particular copy of a computer program (including any tape, disk, or other medium embodying such program), may, for the purposes of direct or indirect commercial advantage, dispose of, or authorize the disposal of, the possession of that phonorecord or computer program (including any tape, disk, or other medium embodying such program) by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending. Nothing in the preceding sentence shall apply to the rental, lease, or lending of a phonorecord for nonprofit purposes by a nonprofit library or nonprofit educational institution. The transfer of possession of a lawfully made copy of a computer program by a nonprofit educational institution to another nonprofit educational institution or to faculty, staff, and students does not constitute rental, lease, or lending for direct or indirect commercial purposes under this subsection.
      (B) This subsection does not apply to -
      (i) a computer program which is embodied in a machine or
      product and which cannot be copied during the ordinary operation
      or use of the machine or product; or
      (ii) a computer program embodied in or used in conjunction with
      a limited purpose computer that is designed for playing video
      games and may be designed for other purposes.
      (C) Nothing in this subsection affects any provision of chapter 9 of this title.
      (2)
      (A) Nothing in this subsection shall apply to the lending of a computer program for nonprofit purposes by a nonprofit library, if each copy of a computer program which is lent by such library has affixed to the packaging containing the program a warning of copyright in accordance with requirements that the Register of Copyrights shall prescribe by regulation.
      (B) Not later than three years after the date of the enactment of the Computer Software Rental Amendments Act of 1990, and at such times thereafter as the Register of Copyrights considers appropriate, the Register of Copyrights, after consultation with representatives of copyright owners and librarians, shall submit to the Congress a report stating whether this paragraph has achieved its intended purpose of maintaining the integrity of the copyright system while providing nonprofit libraries the capability to fulfill their function. Such report shall advise the Congress as to any information or recommendations that the Register of Copyrights considers necessary to carry out the purposes of this subsection.
      (3) Nothing in this subsection shall affect any provision of the antitrust laws. For purposes of the preceding sentence, ''antitrust laws'' has the meaning given that term in the first section of the Clayton Act and includes section 5 of the Federal Trade Commission Act to the extent that section relates to unfair methods of competition.
      (4) Any person who distributes a phonorecord or a copy of a computer program (including any tape, disk, or other medium embodying such program) in violation of paragraph (1) is an infringer of copyright under section 501 of this title and is subject to the remedies set forth in sections 502, 503, 504, 505, and 509. Such violation shall not be a criminal offense under section 506 or cause such person to be subject to the criminal penalties set forth in section 2319 of title 18.
      (c) Notwithstanding the provisions of section 106(5), the owner of a particular copy lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to display that copy publicly, either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located.
      (d) The privileges prescribed by subsections (a) and (c) do not, unless authorized by the copyright owner, extend to any person who has acquired possession of the copy or phonorecord from the copyright owner, by rental, lease, loan, or otherwise, without acquiring ownership of it.
      (e) Notwithstanding the provisions of sections 106(4) and 106(5), in the case of an electronic audiovisual game intended for use in coin-operated equipment, the owner of a particular copy of such a game lawfully made under this title, is entitled, without the authority of the copyright owner of the game, to publicly perform or display that game in coin-operated equipment, except that this subsection shall not apply to any work of authorship embodied in the audiovisual game if the copyright owner of the electronic audiovisual game is not also the copyright owner of the work of authorship.
      • This, I believe, is the applicable US law.

        IANAL, but I still guarantee you you are allowed to resell software under the first sale doctrine, as far as federal law is concerned. The problem is that contracts are generally governed by state law, and if an EULA is deemed to be a binding contract, you can still be sued under breach of contract (not copyright law). There are many many caveats though, not the least of which is that states cannot make their own copyright law, because the federal government has the exclusive right to make copyright law. If the states decide to try to enforce this is will be a long and hard battle. If the federal government tries to enforce it it'll be an open and shut case, and Microsoft will lose.

      • The question, as others have pointed out, is whether of not the person owns the copy or just a liscense.

        In that case it depends upon how to aquired the software. If you signed a contract *before* Microsoft gave it to you, then you have purchased a license to use their software. BUT - If you walk into a store, buy a shrink wrap box and purchase it from a retailer, then the US Commercial Code considers you the legal owner of the copy.

        If M$ is claiming that you have only licensed the use of the software, then let's see their signature on the lease agreement.
    • Just attended a lecture where the lawyer said UTICA was passed in Virginia and Maryland.

      An article about the Uniform Computer Information Transactions Act [pcworld.com]

  • Car Leasing (Score:3, Insightful)

    by wiredog ( 43288 ) on Thursday September 27, 2001 @10:48AM (#2358775) Journal
    No one would own (or lease) a car if the contract said, "You must not sell this car

    If you sold a car you were leasing you would be tossed in jail for grand theft auto, it's sort of implicit in the idea of lease. Which is why MS and others are moving (back to) a software leasing model.

  • Taking sides (Score:2, Insightful)

    Why are there so many laws (i.e. DCMA) to protect every imaginable right for these big content creation companies? Like they need the help to make billions of dollars. What I would love to see is a new law to protect the consumers, not the companies. Something that enforces common sense, like in this case: If you buy the right to use software, then you can sell at least your one copy of the software. The big companies should not have the right to put all sorts of weird restrictions on us because they feel like it.

    We could call it a new DMCA: Deny Monopolistic Corporations from being Assholes. :)

  • by Dr. Zowie ( 109983 ) <slashdot AT deforest DOT org> on Thursday September 27, 2001 @10:50AM (#2358786)
    The legal basis for restrictive EULAs is that you have to make a copy of the software (in your computer's RAM) in order to use it. Copying is prohibited without explicit permission, and so, therefore, is use. Therefore the companies can ask you to sign whatever argument they want before allowing you to use the software. If the license is non-transferable then, sure, you can sell the source CD for the software -- but the poor schnook who buys it from you doesn't have a license to copy it, so he can't use it.

    Yep, I know it sounds stupid (and means, for example, that online documentation has more restrictions than the exact same information printed on paper). But there are federal legal precedents for that interpretaiton. Check out, for example, MAI vs. Peak Computer [nd.edu], from 1993.

    IANAL.

    • Books are copied before they are used, as well. In order to actually read a book, I have to shine a light on it, which throws a "copy" of the current page in the form of photons towards my eyes.

      Copying isn't copying if the data isn't rewritten to a different permanent medium than the original.
  • The DMCA and UCITA have given software licenses some bite where before they were nothing but bark. I fully expect to see a great deal more of this sort of thing.

    Buying software is more like buying a music CD/record/tape/etc. than it is like buying a car. You are buying the *right* to use the IP in a limited way. The difference is that the record companies have not yet managed to prohibit reselling of their media. Give them time.

    --john

  • by Distan ( 122159 ) on Thursday September 27, 2001 @10:56AM (#2358829)
    I've sold my share of Microsoft software on eBay, and had my share of auctions cancelled by the beast, so I think I know how this works.

    I've considered suing Microsoft regarding all of this (seriously) but have put that on the back burner for now.

    Microsoft is of the opinion that they never sell their software, they only license it. Most people who have some MS CDs sitting around got them in one of two ways, either bundled with hardware or in a retail transaction. Those two cases are handled differently.

    In the case of bundled software, MS requires that it be resold with the orginal hardware. Since systems can be upgraded, they are pretty reasonable about what they will consider to be the original hardware. Since eBay can't police exactly what hardware is being sold with what software, you see people selling Microsoft Windows with broken hard drives and stuff like that. When I have to sell something and include some hardware, I usually tape a capacitor inside the envelope (no shit).

    In the case of retail packages, Microsoft requires that you sell the software complete with everything that was originally in the box. So if you threw away the friendly pamplet on "ten reasons you will love the talking paperclip" then you have rendered the rest of the package unsellable in the eyes of MS.

    One good way to get around all this is to use the "Buy-It-Now" feature of eBay. List your item with a reasonable BIN price and it can get snapped up quicker than MS can have it canceled.

    Asta!
  • by DumbSwede ( 521261 ) <slashdotbin@hotmail.com> on Thursday September 27, 2001 @11:08AM (#2358849) Homepage Journal
    Given the opportunity, I'm sure Ford, GM, Dodge, etc., would love to have a no resale clause. Book publishers have not always been happy with the existence of libraries. Software companies treat us this way because we let them, and because they have deep pockets to engage in lobbying and filing lawsuits until they get their way.

    It is true that software has a more ephemeral quality than other products of our modern civilization, but the trend is clear. The Music, Publishing, Broadcast, Cable and Movie industries are taking notes, and getting more viscous and devious in their pursuit of squeezing every possible dime of revenue from the public.

    What make this all the more insidious and timely is the tracking and invasion of privacy most of these schemes require to enforce. Encryption is a bandaid that will never work without tracking and verification. If companies offered a good product at a fair price that we had complete control of how we wished to use these products, software pirates, cable tappers, CD rippers, would be seen as petty criminals instead of modern day robinhoods.

    Mark my words in the wake of the WTC bombings, media companies of all types will jump on the band wagon of information tracking, where no individual may view or own any type of information without someone, somewhere, knowing what they are looking at.

    It doesn't get much more Orwellian than this.

  • Took years before MS lost the case, but now selling OEM versions was officially declared legal despite MS telling you the opposite. (The full shrink-wrapped edition could be sold legally before, despite MS telling you the opposite).

    But of course MS raised the bar and now nearly all preinstalled MS versions are delivered with "recovery only" CDs, which simply don't make sense on a different computer ...

    Bye egghat.
  • Businesses, of course, make money from selling as many licenses as they can. A used software product is just as good as the original, and thus the companies do not want discounted used copies circulating. Plus, their business plans are sustainable. People don't buy software thinking about reselling it, they buy it for their own use! Plus, they often need this software (or think that they need it, not aware of alternatives), so they aren't in a position to negotiate. Thus, the license based system, while arguably morally wrong, is sustained.

    P.S. There have been studies showing that over 90% of software sold on ebay.com is pirated. Even if 10% should be allowed, if you were an honorable software company selling useful software, would you want these 10% to benefit while 90% being pirated software cutting into your revenues?

    P.P.S. I do not necessarily believe all of the preceding comments, I simply wish to advocate logically for a source that does not find much sympathy on this site.
  • In many states, the commercial code says that if a product is to be licensed or leased, (like a car) the full disclosure of the lease or license agreement must be available before the exchange of tender. If the agreement is not available, and a transaction takes place, then it is not a lease or license, but an outright sale. Since the EULA is only available to you after you purchase and open the product, would this not make it an outright sale? IANAL, however if it is an outright sale, shouldn't I be able to do as I please with MY product?
  • Is this just Microsoft? I've sold some games on Ebay (in their original boxes, with all the docs) after I finished playing them, and no one complained. is this just another example of Microsoft being heavy-handed?
  • by mttlg ( 174815 ) on Thursday September 27, 2001 @11:27AM (#2358954) Homepage Journal
    The following is not necessarily based on any people, places, events, companies, or laws, real or imagined, and any similarity is coincidental. So there.

    Here's Microsoft's worst nightmare (assuming that Microsoft is a collective entity that can think and dream):

    Person A has a copy of Windows but doesn't want it. Person A just wants to get rid of the piece of junk, so Person A's asking price for the software and license is very low.

    Person B sees a good deal on Windows from Person A and takes advantage of it. Person B notices that there are more people like Person A, giving Person B an idea.

    Person C is being audited by Microsoft and is knee-deep in bovine excrement. Once the manure truck accident scene is cleared, Person C continues on to work, trying to figure out how to deal with the Microsoft situation.

    Person B saw Person C at the scene of the accident swearing about some "Microsoft bullsh1t." Noticing that the manure truck didn't have Microsoft painted on the side, Person B realizes that Person C is being audited by Microsoft. Person B decides that the time is right to act.

    Person B visits Person C's workplace and proposes a solution to the Microsoft problem. After some negotiation, Person B sells the necessary number of Windows licenses to Person C's company, at a substantial profit.

    Person A is happy to be rid of Windows, Person B made a nice profit, and Person C didn't have to pay Microsoft off. Microsoft loses "potential sales" and doesn't get to torture Person C's company anymore.

    Then Microsoft wakes up screaming, but realizes it was all a dream, making note to take action to prevent this horrible thing from ever happening. After reading "The Little Monopoly that Could," Microsoft was once more asleep, content that nothing could harm it.

    The End
  • license to drive (Score:2, Interesting)

    OK, last week I went down to the DMV and bought a license to drive. Now I have the "right" to drive on the roads. This week I decide I don't want to drive any more so I sell the license to Joe Blow down the street.

    Does Joe Blow now have the "right" to drive?

    Software licenses work exactly the same way. You have the right to use, but not to transfer the right to use.
    • Software licenses work exactly the same way. You have the right to use, but not to transfer the right to use

      No they don't.

      • the DMV is a state agency licensing use of public roads. Software is private property and is licensed by companies.
      • You have to agree to the contract before you get a driving license. No such requirement exists with shrinkwrapped software.
      • The driving license is specific to you. the software license is not.
  • I was looking for a new free popmail service and came across Juno [slashdot.org]. I, living in Canada, had to enter the address of some hotel in Atlanta, Georgia in order to download the software due to some new encryption export laws or something. Anyway, I decided to actually read the license agreement this time and this is some of what I found in it (I especially like how it is essentially a violation to not have your computer on and connected to the net all of the time):

    1.2. Please refer to your initial signup communications for specific information with respect to your service level. Juno may discontinue or alter any service level or aspect of the Service at any time, without notice, without liability and in Juno's sole discretion.

    2. Your Obligations

    2.4. You expressly permit and authorize Juno (and such third parties as may be authorized by Juno, subject to the Privacy Statement) to furnish you, electronically when you use the Service or by any other means selected by Juno, information prepared by Juno or by (or on behalf of) other entities, including advertising information and solicitations. You acknowledge that any such information, advertisements and solicitations are an inseparable part of the Service, and you understand and agree that the furnishing of such information, advertisements and solicitations to you cannot be terminated unless the Service is also terminated. Some third parties furnishing you with advertisements and solicitations through the Service may permit you to "opt out" of receiving such communications from them, in which case you can do so by following the instructions they provide. However, Juno is not responsible for any such party's failure to comply with its own "opt out" policies, nor does Juno endorse the views or content of any third party advertisements or solicitations. All such advertisements and solicitations will be understood to be "requested" by you through the act of using the Service, and each time you use your account reaffirms such request. Juno's policies relating to privacy and the collection and use of subscriber information are set forth in the Privacy Statement, which forms an integral part of this Agreement.

    2.5. You expressly permit and authorize Juno to (i) download to your computer one or more pieces of software (the "Computational Software") designed to perform computations, which may be unrelated to the operation of the Service, on behalf of Juno (or on behalf of such third parties as may be authorized by Juno, subject to the Privacy Statement), (ii) run the Computational Software on your computer to perform and store the results of such computations, and (iii) upload such results to Juno's central computers during a subsequent connection, whether initiated by you in the course of using the Service or by the Computational Software as further described below. In connection with downloading and running the Computational Software, Juno may require you to leave your computer turned on at all times, and may replace the "screen saver" software that runs on your computer while the computer is turned on but you are not using it. The screen saver software installed by Juno, which may display advertisements or other images chosen by Juno, is an integral part of the Computational Software and you agree not to take any action to disable or interfere with the operation of either the screen saver software or any other component of the Computational Software. Juno may set different requirements for different subscribers with respect to the Computational Software (including without limitation whether use of the Computational Software is required and the volume of computations required to be performed) depending on service level or other factors we determine. You agree that, as between you and Juno, you shall be responsible for any costs or expenses resulting from the continuous operation of your computer, including without limitation any associated charges for electricity, and that you shall have sole responsibility for any maintenance or technical issues that might result from such continuous operation. You agree that, as between you and Juno, Juno shall have sole rights to the results of any computations performed by the Computational Software, including without limitation any revenues or intellectual property generated directly or indirectly as a result of such computations, without further compensation to you. If your usage of the Service is infrequent, Juno's ability to obtain the results of completed computations may be impaired. Consequently, you expressly permit and authorize Juno to initiate a telephone connection from your computer to Juno's central computers using a dial-in telephone number you have previously selected for accessing the Service; Juno agrees that it shall exercise such right only to the extent necessary, as determined in Juno's sole discretion, to upload the results of completed computations to Juno in a timely fashion; and you agree that, as between you and Juno, you shall be responsible for any costs and expenses (including without limitation any applicable telephone charges) resulting from the foregoing. Any software, data, or other materials downloaded to your computer in connection with the activities described in this Section 2.5 will not be used to collect personal Identifier Information (as defined in the Privacy Statement) from your computer and will comply with Juno's privacy policies, as reflected in the Privacy Statement. You agree that you will not attempt to reverse engineer any such software, data, or other materials or transfer or disclose any such software, data, or other materials, or the results of any such computations, to any third party. You acknowledge that your compliance with the requirements of this Section 2.5 may be considered by Juno to be an inseparable part of the Service, and that any interference with the operation of the Computational Software (including, but not limited to, any failure to leave your computer turned on to whatever extent Juno requires of subscribers at your service level) may result in termination or limitation of your use of the Service. You acknowledge that Section 6 of this Agreement shall expressly apply to the activities described in this Section 2.5.
  • Even if the courts decide that you may legally transfer your license, it won't matter. For example, Microsoft will have mandatory customer registeration of their software soon. Your software will ensure that you have registered your software and won't run otherwise. The registration process will ensure that only one person can register a given copy. This means that once you register your copy of your software, Microsofy will only let you use the software. You may be able to legally transfer your license to another party, but I believe that Microsoft wouldn't be obligated to ensure the transfered license is effective; that is, they aren't required to make the software work for the purchaser of the re-sold copy.
  • ... that I just read recently about some court decision that basically told a company that tried to sue over the resale of their product to go fuck themselves. This should apply to software as well. Of course from reading the other comments I see the common thread that you are licensing the software, not buying it. In a sense this is true, UCITA and the DMCA try to make sure of that, however un-constitutional they may be. But I do own the packaging. The box, the papers in it, the cd itself, they are all mine even if I'm just leasing the information stored on them. This is all certainly true just as it's true for any book that I've bought. In a capitalistic society it's my right to try and make money off of things that I own, and if I want the money from reselling software you can be damn sure I'm going to do it. I don't care if it is easier to copy software than it is a book, that doesn't take away from my rights in any way, shape or form. If they want to protect their software from being copied they must find other legal (and moral means) of doing so other than trying to restrict the rights of normal people.


    Ever since UCITA passed here in MD I've been tempted to go to stores and buy copies of Windows, and return them opened the next day. Since I'm bound now by the license in the box, and I must open the box to see the license I am legally in the right to return the product if I refuse to agree to the license. It shouldn't matter what the return policy of the store is.

  • No one would own (or lease) a car if the contract said, "You must not sell this car, in the event this car is no longer used, send it to the nearest junkyard.", so why is this true for software?


    No one would own (or lease) a car if contract said, "You must not make modifications to this car and sell it unless you give the instructions on how to make those modifications to the new owner". Or if it said "You cannot add a stereo system to this car, thus creating a derivitive work, unless you release that stereo system under the GPL".


    So why is it that the GPL tries to do this for software?


    • I'd be more than glad to tell the guy who buys said fictional car how to engage the James Bond smokescreens and the autocannon that I put on in a moment of paranoia, and how to take them off if he doesn't want to be liable for carrying military hardware. But those can be added and removed freely, like modules. The GPL says that you can indeed make closed modules. And so it would be the same if the fellow put his stereo in the car after I sold it to him, because a stereo component is a module.

      I imagine there might be a case for a lawsuit if you made your car run on Russian rocket fuel or some such thing and didn't tell the guy you sold it to. So, integral modifications are already covered.

      Can we get away from comparing apples to socket wrenches?
  • Microsoft has proven time and time again that no matter how hard they're giving you the shaft, you're still buying the software. Thank you, sir, may I have an upgrade? It seems to me that this is needless controversy. Speak with your dollars. If you don't agree with the license, don't buy the software. It's no use complaining after you've already signed the contract. I wish companies would make license information easily availible online, so that we could find out what we're getting into before we lay down the dough.
  • Why not set up a non-profit oganization to donate your old software to? Going to throw out that old PII box? Why not donate the software and wipe the drive before you sell it for parts?

    Maybee the EFF could set this up. You would be able to buy great software like Excel97 for peanunts, and M$ would get the shaft. Licence management would be tricky, but as long as you have the origninal CDs and certificate of authenticity I doubt M$ could have any valid legal claims.
  • by markmoss ( 301064 ) on Thursday September 27, 2001 @11:50AM (#2359112)
    As someone with a very strange cognomen pointed out earlier, a long time ago some book publisher tried this "licensed, not sold" stuff with a contract printed on the flyleaf of the book. The courts disallowed this, and created the first sale doctrine. That is, when you sell it, you have no say over what they buyer does with it.

    The difference with software is less because of the less tangible nature of the product (bits aren't tangible, but the CD and manuals certainly are), but that judges are over-impressed with arguments that cyberspace is different. And precedents concerning software license agreements were set several decades ago, when the judges were not sure whether copyright law covered bits at all, and software patents were even more dubious, so the (then generally quite reasonable) license agreements were the only real protection software writers had. Since then the copyright law has been amended to clearly protect bits, the old ban on patenting mathematical algorithms has somehow disappeared, and so software does not need license agreements to protect against piracy. But they are still putting out those license agreements, and getting more unreasonable about the terms every year.

    Maybe eventually enough technical savvy will filter into the courts that the judges will decide that software should sell under the same rules as everything else. That does not imply just the first sale doctrine -- what would really hurt MS is if the courts decide to apply the UCC's mandatory warranty of merchantibility to consumer software sales -- that is, if software follows the usual rules, the software vendor would be responsible for the software working _right_ in home computers. Given that possibility, their continued pushing of egregious license agreements and on-line activation seems almost like a corporate death wish, an attempt to push until they fatally tick off some judge.

    But right now it might be more effective to agitate for legislative action, instead. The software vendors may be flooding Congress with contributions, but the corporations that buy software instead of selling it outnumber them many times, and they are getting hurt by this !@#$%^.

    We need an anti-UCITA:

    First Sale: Purchasing an individual software distribubution gives you the right to put it on any one computer of your choosing, to resell it, give it away, or even loan it as long as you can ensure it is operable on only one computer at a time. (Note that this does not apply if it is leased, not purchased, but the package had better make it clear that this is a lease for a specific time period. Also, it does not apply to site licenses, IF the full licensing agreement is presented before the sale.) Nor can individually purchased software be locked to the first computer you install it in, or shut itself down after a time period. If the vendor chooses to install and use a remote-shutdown feature to combat piracy, then if they shutdown a legal copy, they are liable for $100/hour until it's back up, and all incidental and consequential damages.

    Implied Warranty: The UCC law makes many common "limited warranty" clauses null and void, like one saying that if the steering linkage falls off your car, your heirs are entitled only to a new steering linkage. Per UCC, the carmaker is responsible for the accident, too. Putting software fully under that now would put software vendors out of business, but as long as they get off scot-free for bad quality and even get to charge you for the bug-fixed version, most of them won't improve their quality. We need at a minimum the right to take the software back and get a full refund if bugs, which prevent it from operating as advertised, are not fixed promptly and at no cost. Also there should be compensation for phone bills and time and hold, and punitive damages when tech support tells you it isn't a bug and they already know about it.
  • Does anyone know where the article mentioned in the story actually is? I have the October 2001 issue of Wired, and page 170 is music reviews.
  • Transferring ownership is one thing. Transferring from an obsolete box to a shiny new one is another.


    Microsoft 1990: "Keep using Windows because you'll have to buy all of your old software again if you switch."


    Microsoft 2001: "Users do not and cannot own software. Transferring from one computer to another requires a special license and transfering ownership is prohibited."


    You may have noticed that most commercial software is so bad that users wouldn't want to transder it onto a new machine.


    There's also the issue of registry faults as an inadvertant form of copy protection...

  • ...is Microsoft's real response to this. They know they're on shaky legal ground with this whole thing, and the only way to get off it and onto something solid is to not sell any licenses. And the only way to stay in business after they stop selling licenses doing that would be to sell subscriptions to use their software.

    After this changeover happens (when/if it happens) they'll probably provide freely downloadable thin clients for Word, Excel, etc, and you'll have to pay whatever they determine the market will bear (because even Microsoft has to consider what the market will bear, whether they are correct or not is another topic) per month, per product you want to use.

    In this situation there's no tranferrable license you need to worry about because you give away the only software you distribute to anyone for free, as it's useless to those who don't subscribe. You control the only software with any functionality and no one other than yourself will possess that software. Anyone else running a server that allows people to use Word that you haven't specifically allowed couldn't have bought it anywhere because you don't sell it, then you're well within your rights to throw them in jail for theft.
  • by SIGFPE ( 97527 ) on Thursday September 27, 2001 @11:58AM (#2359170) Homepage
    In a capitalist economy I can try selling product X to A and B but if I overcharge A and not B then A can get B to buy it and then buy it off B. This keeps prices in check. This is one of the key elements of a capitalist economy that makes it work so efficiently for both buyer and seller. It seems to me that EULAs put much more of the power into the hands of the seller than the buyer and we actually lose many of the great benefits of capitalism.


    IMHO one of the great things about ebay is that it brings capitalism to the masses. Millions of people all over the world can now now make their lives more efficient (in an economic sense) by trading even the most trivial things that they own. It's a grand bazaar where everyone profits. So it's not surprising that we see EULAs in conflict with the philosophy of ebay.


    EULAs are anti-capitalist. They are the product of a lobby economy - one where people who bribe politicians get to determine where resources in an economy should go.

  • I was able to sell the CD, but the auction winner could not use it because the CD key was tied to my credit card number and sony online account. Sony refused to transfer the account or reset it. They claim it's to stop people from auctioning ebay characters or items, but since I only played the game for a few hours and then deleted the characters this was not an issue. They really want to force people to buy the new Everquest CD. I suspect to be seeing a lot more of this in the future.
  • "I seem to recall hearing stories of courts overturning these schemes; does anybody have any specifics? Cases/judicial opinions, perhaps? I've checked FindLaw, Google, and others, but haven't found anything"
    Searching Google for software + first sale doctrine [google.com] returns 2060 hits, with this case among the first few:

    BACKGROUND

    Adobe is a software development and publishing company. Among other things, Adobe makes educational versions of their software, which are available to students and educators at a significant discount. Defendant One Stop buys and sells computer hardware and software on the open market. Adobe alleges that One Stop improperly acquired an educational version of Adobe software, which it then adulterated and sold as full retail versions to non-educational users. In its complaint, Adobe alleges that the agreement was a licensing agreement and not an actual sale, that One Stop infringed Adobe's copyright, and that One Stop infringed Adobe's trademark.

    DISCUSSION

    The court found that the Off Campus Reseller Agreement, which governs the educational seller's relationship with Adobe, was a licensing agreement and not an actual sale. Because the first sale doctrine, implemented by the defendant, is triggered only by an actual sale, and because a copyright owner does not forfeit his right to distribution by entering into a licensing agreement, this factor weighs in favor of the plaintiff. The OCRA is a licensing agreement. Thus, contrary to One Stop's assertions, the OCRA does not represent a first sale between the seller and Adobe. One Stop's failure to trace its Adobe products to a sale renders the first sale doctrine inapplicable and subjects One Stop to potential liability under copyright law.

    The court also found that One Stop committed copyright infringement as a matter of law under Section 501(a). By obtaining Adobe software from a party to an Adobe licensing agreement, One Stop was bound by any restrictions imposed by that agreement. Thus, One Stop committed copyright infringement.

    Lastly, the court found that One Stop did not infringe Adobe's trademark. Although Adobe attempts to parallel its case to Shell Oil, the Court found Shell Oil distinguishable. The court found that the mere distribution by One Stop of admittedly unadulterated software is insufficient to establish trademark infringement.

    CONCLUSION

    In Adobe Systems, Inc. v. One Stop Micro, Inc. the Northern District of California held that the agreement under which software was distributed was a licensing agreement, not subject to the Copyright Act provision that copyright did not extend to resale of copyrighted items following their initial sale. The court also found that the license agreement applied to the distributor, even though it was not signatory. Last, the court held that the distributor committed copyright infringement by violating the licensing agreement.

  • My Sis (Score:3, Insightful)

    by Marcus Brody ( 320463 ) on Thursday September 27, 2001 @12:16PM (#2359274) Homepage
    My sister has, for the last few years, been running a "grey import" company. Basically, some guy in the states buys up a load of microsoft products which are marked purely as OEM, not for resale, not to be sold outside of the US etc. As far as I understand it, the guy in the US is basically classified as a villian, even though he buys most of his stock from US system builders who have gone bust. However, my sister buys his stock after he has shipped it to the UK, where all these dumb clauses aren't applicable under EU law. Therefore her company is completely ligit - a publicly owned company, with a 'net presence etc., and able to sell microsoft products at a vastly reduced price to normal retail outlets.
    A few years ago, microsoft were really trying to stamp out companies selling grey imports: Basically turning up at the office of some tiny company one monday morning with 15 lawyers and 70 boxes of legals. These companies closed down pretty darn quick. However, I think one of these companies took the case all the way to the EU court and won! Hence, my sister is now safe in her business.
    I'm sorry I cant rember the exact details, but my sister has this great legal schpiel whenever anyone accuses her of being a crook - EU case numbers, reference subsections, grand judge rulings (I'll try and get her on slashdot later to fill in the details). All I can remeber about her little diatribe is that it usually ends with the sentence "Microsofts license is almost as buggy as its software".
    She has allways been a good bussinesswoman & salesperson (she even managed to flog me one of those millenium bug kits, convincing me my computer would die otherwise, even though I know for a fact ahe actually knows nothing about computers!).
    A while back she was approached by one of the major linux distributors about being their UK distributor. She took one look at the GPL and almost died laughing. I remember her words:

    "How the fuck am I supposed to make money selling this? It makes the MS licence look good."

    As I said, she's allways been a good bussinesswoman!
  • by mindstrm ( 20013 ) on Thursday September 27, 2001 @12:23PM (#2359314)
    And here's the root of the problem.

    To Microsoft, you are not 'purchasing' a product. You are *licencing* software. This is fundamentally different than buying a car, or a book, or anything else, where there is a definite product. This is how they try to tell you you can't re-sell it.

    Now.. the problem is, according to the average consumer.. it LOOKS like a product, you can walk into the store and buy it off the shelf.. there are no negotiations, no lawyers involved... just a click-wrap agreement that we all know nobody reads.
    Stores *Treat* it like a product.....

    So it's a deception.
  • by cprael ( 215426 ) on Thursday September 27, 2001 @01:56PM (#2359945)
    Interesting. About 4 years ago, Microsoft was doing this, and I got a little tired of it. A quick restraint-of-trade complaint to the CA AG's office, they talked to eBay, and Microsoft shut up and went home. Looks like eBay needs to be reminded of this, and have it pointed out that that they've already had their hands slapped on this once.
  • Selling Licences (Score:3, Interesting)

    by os2fan ( 254461 ) on Thursday September 27, 2001 @10:21PM (#2362173) Homepage
    Software is like any other copyrighted stuff.

    When you buy some software, or a book, or a record, you own the distribution media, and a licence to use the material contained thereon. Even though I don't own "Amipro" or "Imagine" or "Regular Polytopes", I do own a licence to use a copy of it on my machine. Buying any of these do not give me the right to set myself up as a redistributer.

    So, technically, you don't own the copyright to the software, you do own the right to use a copy of it, and to hold such backups of the media as allowed in the agreement.

    And it is that right that you might transfer under the cover of sale.

We must believe that it is the darkest before the dawn of a beautiful new world. We will see it when we believe it. -- Saul Alinsky

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