Slashdot Mirror
Unbundling Windows Declared Legal in Germany
brokeninside writes "Infoworld has an article about Germany's highest court on civil matters declaring that Microsoft can not prevent dealers from unbundling OEM software. This ruling stems from a lower court ruling in 1997 on a lawsuit against a German company for selling an OEM copy of Dos/WfWG sans hardware."
...what the software world would be like if this was done with MS-DOS in the USA back in the 80's.
any child under 18 cannot legally form a binding contract in the US
Exactly. No contract == no license == no license restrictions == you have all the rights of first sale and fair use.
Will I retire or break 10K?
Many products are like this. Retailers aren't allowed to split up their family-size packages of.. say, shampoo(ie 2 bottles shrink wrapped together, and sold as a unit), and sell them individually, why should this be different for software?
Don't mistake "the package says" for "not legally allowed to".
You'll note that most of them don't say "this package may not be resold" anymore; most of them say "not labelled for individual sale" and have no UPC code, which makes things hard for a retailer who wants to sell them.
--
Only buy from manufacturers whose recovery CDs don't reformat your HD (i.e. they just restore c:\windows). Acer's CDs don't reformat IIRC.
Will I retire or break 10K?
I don't think so. See, in this situation, you agreed to recieve a free copy of the software on the condition that you don't resell it. I can't be totally sure since IANAL, of course, but that's my take on it.
--
--
"I personal[ly] think Unix is "superior" because on LSD it tastes like Blue." -- jbarnett
After digesting some Ritalin, try and discover the difference between 'sponsoring' and 'bundling'.
In the immortal words of Socrates, who said; 'I drank what?'
BTW: I always hated the CDs that don't allow you to install the products without wiping the entire system.
Fight Spammers!
What's to prevent a user from making fair use copies, then? Just make a copy of the CD and install it on two different computers that you own (which is prohibited in the contract). Because you hadn't agreed to the license agreement, does that just fall under fair use of copyrighted material? Can anyone then make unlimited personal use copies of software they "purchased"?
I'm sure I'll get flamed for this, but I don't think it's so wrong that you're not allowed to resell OEM Windows. I do think it's evil that they force their OEMs to bundle windows though.
Many products are like this. Retailers aren't allowed to split up their family-size packages of.. say, shampoo(ie 2 bottles shrink wrapped together, and sold as a unit), and sell them individually, why should this be different for software?
Maybe I'm misunderstanding.
RedHat had the obligation of providing the source to you, but do they have it also towards your friend? With a transfer of ownership of rights you don't automaticly transfer RedHat's obligation or is this enbedded in the GPL?
That's a lovely theory, but I'm reluctant to buy it. Perhaps in the longrun, they may benefit from an increased user base, but in the shortrun, they're going to lose sales to resellers that may have otherwise been first sales. They don't get a dime from resale, so how would they think to get any short-term benefits? Historically, they've always encouraged piracy to build a userbase until such time as the market can support paying for it, upon which time they've always cracked down. The legal right to resale offers MS no benefits over that strategy, and moreover prevents that last crucial step of cracking down and enforcing new sales.
"If one is really a superior person, the fact is likely to leak out without too much assistance" -- John Andrew Holmes
From that page:
<I>
Point out the benefits of a legally licensed, preinstalled operating system. Customers have the original CD so they can reload the software. </I>
So what's all this about recovery CDs that aren't real? Uncle Bill says that everybody has an original CD.... or does he...
"It's tough to be bilingual when you get hit in the head."
Ehmm, unbundling just means they can separately sell the copies of Windows that usually ship only with a PC. It doesn't mean they can decompile the software.
IANAGL
Could this mean that you could void the GPL after the initial sale in Germany?
If I've gotten a CD (say in the back of O'Reilly's Apache book) can I now sell that CD for more than the cost of the media? Isn't that just another form of unbundling?
Work for Change & GET PAID!
If American laws refuse to protect consumers, Germany may be a nice place to live. How is the cost of living?
What makes you think they would pirate Win2k now that this court decision clears the air for purchase of it? You don't think M$ let this come to trial by accident, do you?
From what I understand, Microsoft does believe that unbundling Windows is the same as piracy. The article mentions that Microsoft is the plaintiff in the suit. Microsoft sued the hardware manufacturer because the manufacturer's sale of Win/DOS violated the license agreement between Microsoft and the manufacturer and, as such, was an act of piracy.
I wish there was a similiar suit in the US, so people could dispose of old Windows disk however they pleased. Three years ago I got five bucks out of Windows 3.1 on 5.25 floppy on ebay. Its a shame that such a thing can not happen now...
IANAL, but as I understand it, one of the principles of copyright law is the 'First Sale Doctrine' - you have exclusive rights to duplicate your copyrighted materials, but your rights to limit its use end at the 'First Sale'.
This idea has come under attack lately (the DMCA is basically an attempt to blast first-sale into the stratosphere), so it's nice to see it affirmed. It's a bigger deal than just software, though; it's a shot across the bow of all IP cartels.
> This means that OEM's who want to continue selling PC's with Microsoft products will have to start charging more for the PC's.
> And this will lead to more expensive PC's for everyone, since OEM's need to offer M$ products in order to be competetive.
No, you ignore the case where OEMs do not want to bundle MS products. They may now have an opportunity to be competitive price-wise by bundling less.
And then there's always the heretical idea of bundling non-MS products. (Assuming any non-MS Windows software companies are still left in the game.)
Some of you guys need to get away from the idea that everything depends on having MS stuff on your system. That, BTW, is what all these court cases are trying to protect. If you want MS stuff that's fine, but don't make me buy it too just so you can get a discount.
Grrr.
--
Sheesh, evil *and* a jerk. -- Jade
The principle of first sale or in this case, unbundling simply relates to the transfer of ownership or rights. If I sell you my T-shirt, I give up my rights to it. I can't wash it, dry it, wear it, whatever becuase it is no longer my shirt. It is your shirt now and you can do anything you like with it, in the same way that I could have done anything with it when it was mine.
With my MS Office CD, I can copy it for backups, poke at it using a debugger, and so on. The only thing that copyright law prevents me from doing is to copy it and then Sell those copies. But I can transfer my ownership of that CD to someone else, thus giving up my rights to use it.
Same with GPLed software. NO DIFFERENCE. I can simply take that RedHat CD (which only has bionaries) and sell it to my friend cheap. If I keep no further copies around, I am not redistributing it, but transfering it to my friend. So I don't have to give sources. I can just tell the friend - go to ftp.redhat.com for the sources. RedHat's obligation of providing the source is now to my friend, not me. I am clean.
But since the GPL grants me the right to redistribute it, I can also choose to make copies of it to sell away! As long as I obey the conditions that I should give the binaries I must give the source. So if I make changes, if I make copies, then too bad, I am a reseller or distributor and must obey the GPL.
So the question of copyright or copyleft as the GPL attempts to be is is orthogonal to the idea of transfering ownership, regardless of whether it is for profit or not!
IANAL, but I should be!
..In Germany, but let's be honest, just how much will this ruling effect the North American market? Hell, up here in Canada, we don't expect to see much effect on the DOJ case against Billy boy.
It's an interesting legal precedent in Germany, and does show promise in terms of slapping down the M$ arrogance, but until there's some sort of binding international court for these sorts of things, legal ruling in one country against a intinational corporation just won't hurt it that much.
I have to say, I'm getting tired of this anti-MS stuff all the time. Lets just get on with improving Linux on the desktop, and take over the market--that'll learn Microsoft!
Beware the Whyte Wolf.
With a gun barrel between your teeth, you speak only in vowels...
Your refering to the 1997 rulling and NOT the news story BTW.. Your a tad off topic...
The candy bars are a "bulk liccens" the end user is buying the bulk at a discount for doing so. This anolog to Microsoft selling bulk liccenses something I know people object to but I'm not one of those people.
The OEM deal says the OEM must buy a copy of Windows for EVERY box he sells. The 1997 rulling says he may then sell it alone instead of with the computer.
This means the end user is not FORCED to buy Windows as part of the pacage but may then buy Wndows as a seprate pacage. As it should be. This means the consummer gets to pick his own operating system.
Saying otherwise is anolog to every home built by contractor X must then install appliences from company Y even if the home owner wants appliences Z.
OEM's need to OFFER Microsoft products to compeate but the end user should be allowed to say "No" to Windows and buy something else for this computer.
Pacage deals are good when it's an OEM working to offer a better deal to the consummer. It's bad when it's a software company trying to rob consummers of the ability to NOT buy a product they will not use.
The accual story... OEMs desiring to sell PCs with Windows preinstalled can do so an remove pacages such as IE and replace them with pacages such as Netscape. This is exactly what Compaq did in the United States and Microsoft sued them over it.
Now in Germany if Microsoft wants to preinstall IE thats fine... but then an OEM in Germany dosn't have to install it. They may instead go with Netscape.
Other posablitys with this... A DrDos as a functional replacement to the Dos that Win9X runs ontop of.
If Microsoft wishes to preinstall MsOffice with MsWindows fine but then an OEM can then rip the two appart and sell them as two diffrent products.
That reduced price has allways been a sham. Windows is over priced to start with....
The reduced price is something like $25 to $50... I rember when $25 was what you charged for high quality software. $200 and up was for mainframes and other such deals where you expected there to be 4 to 200 users using a single computer. I personally object to pricing policys based on the estimated amount of users on a given box. But that was how it was done and still is by some companys.
The whole idea of selling Windows for $100 to $200 is really obnoxous.
I don't actually exist.
Somehow, framing it under the umbrella of antitrust does not make sense, because, IMHO, the action itself is despicable, nevermind who does it.
What If I want to install the Quicken program that was included, after wiping it because I was using Microsoft Money?
Fight Spammers!
Since Germans can now buy and sell windoze like any other piece of work, M$ hopes their sales will increase, undercutting the strong Linux/BSD support that has been emanating from .de this last decade or so.
I don't know about German copyright law, specifically, but I believe under International copyright agreements, the principle of right of secondary sale has been pretty much what it is for some long time now. The German court just affirmed that Yes, this law applies to M$ just like it does to everyone else. This is not a precendent except WRT to M$, who always seems to feel that they should me exempt from laws that they don't like.... As a copyright holder, you don't have any right to control secondary sales. Period. That was already the case, and the court affirmed it.M$ has long tried to gain control of secondary sales through use of an EULA. This EULA legally invalidates their copyright (as I understand it). Hence, the judge could have struck down either their copyright, or their EULA....
It would have been better for the consumer if the court had invalidated the M$ copyright, imo, but I'm sure M$ knew that before they allowed this to go to trial. The decision they recieved will benefit them (M$) far more than it will anyone else, since it clears the way for M$ sales in germany. Such sales were legally very dubious prior to this decision by the court.
I think it's very clear where this will lead: To an attack by M$ on the established Open Source/Linux/BSD communities in Germany.
"The Internet is made of cats."
a situation at my school? Microsoft signed some deal, and basically all of us students were able to acquire free copies of Visual Studios 6.0, WinNT 4.0 w/SP4. We had to sign an agreement saying we would not resell the software.
If I went to a German university and had software given to me for free does this mean I could turn around and sell it? Or, because I did not actually purchase the software and it was given to me am I prevented from doing this?
I don't understand how many people say this ruling makes sense. As mentioned by many other posters, it is nearly akin to being able to sell just the shampoo from a shampoo/conditioner pair sold shrinkwrapped together. Maybe it's more like buying a new car, pulling the engine out and selling that? Except selling the OS that runs a computer seems to me to be much more useful than selling the engine out of a new car.
Then again, what's to prevent the retailers from installing their OEM copies of the software, selling those systems without the OEM Software CD's, and then turning around and selling the OEM Software? Would they be able to get away with that, and how would they be caught? hmm...
Because you hadn't agreed to the license agreement
While we're on that topic, why not have your grandma, your toddler, or your cat click the "agree" button? That's the fatal flaw of shrink- and click-wrap license agreements. This would also help the Wine project, as it allows legal reversing of Windows.
Will I retire or break 10K?
I really should do that.. Blue spandex leotard, a cape, a glue gun, and fifty or so NT5 developers discs. Carrying a 2x4, I'd be the Blue Screen Of Death.
Or perhaps go out to the Army/Navy surplus store and pick up a dress uniform and the appropriate insignia. I still have my ID badge from a trip out to Selfridge; I'll just do a little digital magic to make it read "General Protection Fault, Microsoft Corporation".
I think I'll pull the latter on Halloween. I look far better in uniform than in spandex.
.sig: Now legally binding!
Let's make a good thing : send our unused MS software to a charitable organisation in Germany, where they could legaly sell the software and use the money for whatever good cause we support (suing MS, the RIAA or MPA for example :)
Generally, if the OEM version is cheaper than the upgrade version, it's for 1 of 2 reasons:
1. The dealer you bought it from is not an authorized system builder, and probably bought the windows on the gray market.
2. The distributor he bought it from is not authorized, so the copy of windows is from the black market - i.e. pulls from larger OEMs, or outright bootlegs.
In other words, your copy of Windows is probably either gray market or black market software.
Also, the information I used was from Windows 98 OEM, not Windows 2000. So even if you're BZZT-Right, I'm not BZZT-wrong, just BZZT-different.
--- "So THAT's what an invisible barrier looks like!" - Time Bandits
I think the more interesting ramification here is that software is a more directly "functional" sort of thing than traditionally copyrighted materials. It's easy to argue that you don't get more "functionality" out of having two copies of a book you bought. You may get more personal convenience by having a copy for home and for the office, but it still provides you with the same amount of intellectual "power", if you will.
Software, on the other hand, can increase your "power" by copying it. If you never used two computers simultaneously, you'd have a good fair use argument, but what about installing five copies of Windows on a home network where they're all always on? It may still just be for personal use, but there's definitely an qualitative difference between that and ripping a CD, for example.
Also, I wonder how "personal use" extends to a corporation. (A legal "person".) It's probable the whole origin of sofware "licenses" rather than sales is to prevent just this sort of thing by corporate "people".
Well you, since you unbundled the products on what is forbidden by the GPL. What was one product now becomes two becuase you unbundled it. Of course bundling is legal in Germany. But that does not mean that is always so. For legal, read not illegal, as long as no other laws or agreements are breached.
No, I'm sorry, that's wrong.
If this was still back in the bad old days where they were required to buy a license for every machine they made, that would be the case. It isn't.
An OEM copy of MS software doesn't necessarily have to come with a complete machine. There's any number of UK dealers who'll sell it to you with a big enough component to suggest you're building a new system. This is saying that they can go further than that, and sell software intended for bundling with new hardware by itself. That's ridiculous, and a dangerous precedent. The softwrae has been sold on condition that it's only resold with hardware, yet the reseller is now free to breach that contract.
Loads of manuacturers sell OEM copies at a reduced price, the idea being that if it's bundled with the machine you get possible future upgrade sales and reduce the likelihood of a sale for a competitor. This case effectively kills that market in Germany as they can't really carry on with this or people will always buy the OEM part rather than the retail, losing them a fortune.
Plenty of non-MS software gets bundled, too. When I bought this machine, it came with Lotus SmartSuite, IBM WorldBook and ViaVoice. True, none were installed but all were bundled.
Your last paragraph betrays a total lack of knowledge verging on paranoia. Calm down, get off your high horse. OEM software deals are a good idea, they're not anywhere near as restrictive as you make out and this ruling knocks the market for them on the head. It's daft.
Greg
(Inside a nuclear plant)
Aaaarrrggh! Run! The canary has mutated!
Has anybody given any thought to the impact this ruling might have on the legality on the GPL, at least as interpreted in Germany? The court ruled: "The right of authorship can only be exercised once. Once the product has entered the marketplace, with the author's agreement, he can no longer engage rights of authorship". Isn't that what the GPL is, though? An attempt to compel specific behaviours based on rights of authorship? The legal fuzziness of the GPL as already seen in a slashdot conversation earlier, might only get worse. Linux fragmentation as a result? Who knows.
IANAL, but I think that the shield that the GPL has is that there can be no "secondary sales" because there was no "primary sale".
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
The dealer is allowed to unbundle them, but unfortunately, it won't boot...
Unless it includes a CD of FreeBSD or Red Hat Linux or some other OS.
Will I retire or break 10K?
Das Vindowsdisk ist nicht fur die redistributen und debundilen. Ist easy traschen der harddisken, blowencarten und blauscreenovdeathen. Ist fuer gewerken bei das dumpkopfen. Das rubbernecken sichtseeren keepen das cotten-pickenen disken in das boxen; relaxen und watchen das blinkencursor.
So unbundling is now legal in Germany, what about Microsoft no longer selling anything in Germany?
How is that a bad thing? Computers will come with a BSD or GNU/Linux system installed on the HD. If the Deutsch want their precious Winblowz apps, software developers will contribute to Wine.
what if ... Billy says "Naw, screw it, I'll just close the company instead."
Again, how is that a bad thing?
Will I retire or break 10K?
Does this means I can finally part with the 200+ OEM copies of Win95 OSR2 and Windows98SE I have sitting in the back room, and do it legally??
Man, does it suck to have to pay for the software and then not be eligible to sell it... Not for resale, my ass..
.sig: Now legally binding!
German courts ruled today that computer manufacturers are alllowed to bundle non-Microsoft software with their computers. Speculation abounds about whether or not this applies to other operating systems as well. If so, this has the potential to allow OEMs to bundle computers with Linux or MacOS against Microsoft's wills. Microsoft is expected to file an appeal later today.
satire=false;
Sheesh. It's amazing that the courts have to uphold what should be common sense. Maybe this says something about our legal system?
Friends don't let friends misuse the subjunctive.
Does anyone somehow feel that this is the way Big Monopolies should be dealt with? A clear concise ruling yet far reaching ruling that prevents MS (and fture companies) from attempting to leverage its monopoly is far far better than an expensive anti-trust lawsuit. Germany seems to be getting it right, IMHO.
My machines never stay in one piece forever. Eventually they disgorge their innards into other machines, the HD going into one box, the video/sound into another, the mobo/CPU yet another one. Which of these pieces is the Windows CD supposed to stick with? Where does its loyalty lie?
Personally, I believe in the buy-once-use-on-all-machines-in-the-house approach, and unless the FBI comes tearing down my door, I don't give a shit what others say. That's the beauty of software, that you can do that sort of thing. If you could also do it with hardware--books, TVs, phones--I'd never buy more than one of anything, but alas...
Uwe Wolfgang Radu
If your price is too high, look for another distributor.
You can do this, but it changes the legality of the situation a little.
There are very few distributors truly authorized to sell OEM system builder versions of Windows. Every one of these is about the same price.
There are many other distributors that sell it without being properly authorized. Most of these copies of Windows are less expensive, but they are either gray market (split up from a volume purchase) or black market (pulls from large OEMS or counterfeits). The only way to assure a legal copy of Windows is to buy from one of the few distributors who is truly authorized. And pay full price.
--- "So THAT's what an invisible barrier looks like!" - Time Bandits
Now, supposing he does decide to board up M$ and move along his merry way. There will be a huge void in the support market, and anyone worthy of being called an entrepeneur would enter that market in a second.
Capitalism solves these problems all the time. Don't think that the world would end if microsoft would go away.
Marxism is the opiate of dumbasses
Selling a computer is one thing, selling an OS is another. However, M$ says that if you buy a PC from, let's say, Dell, and it comes with their (Microsoft's) OS, then you cannot take that license and resell it to someone else - even if you have no intention of using it.
Also, let's say I prefer Corel or Lotus Suites to Office. If it came with my 'bundle' M$ says I can't sell it to a friend. If I buy a 4X4 and I don't like the rims, I can buy new ones and then sell the old ones to someone who likes them. Why can't I do this with software?
I'd rather have someone respond than be modded up.
Maybe that is why Microsoft is insisting that companies does not include a seperate Windows CD and just use the "recovery" CD to reinstall the WinBlows Image.
According to the story, the "Windows recovery" CDs probably just unzip a Windows folder straight from the CD and leave the rest of the HD alone.
BTW: I always hated the CDs that don't allow you to install the products without wiping the entire system.
Two words: deltree windows
Will I retire or break 10K?
Because fair-use isn't a boundless priviledge to make infinite copies without use restrictions. There are specific uses for which you're allowed to make fair-use copies (such as backup), and infinite installs isn't one of them.
What is far more interesting is the implication for reverse engineering, since absent a liscense or contractual obligation to the contrary, reverse engineering is permitted for all normal products.
"If one is really a superior person, the fact is likely to leak out without too much assistance" -- John Andrew Holmes
Someone I know writes device drivers for a living. One Halloween he put together a costume out of free NT installation CD's he had been given that he was never going to use.
:-)
:-) (Actually he probably would have.)
I nearly died laughing when I saw it.
I am not sure that he would have resold them. Something about it being an, "abuse of computer rights"...
Cheers,
Ben
My usual seat in the cluetrain is at A HREF="http://pub4.ezboard.com/biwethey.ht
The arguement could be made that it is the documentation which is being sold. Or possibly even 30/180/whatever days of tech support are being sold and the linux distro is just thrown in for free so that the actual item being sold isn't useless.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
Microsoft Chips signs deals with every major sandwhich chain in the world. This deal allows the individual sandwhich shops to buy Microsoft Chips at a great discount - but only if they agree to only: (1) sell sandwhiches packaged with Microsoft Chips (2) don't sell Microsoft Chips by themselves (3) don't sell sandwhiches by themselves (i.e. sans chips) (4) Never EVER sell any other brand of chip.
Personally, I'd rather pay a bit more and have a choice!
---
Gort! Klatu Barata Nikto!
This does not affect the GPL *at all*.
The GPL is only in effect if you wish to distribute (make copies of) the software to give to other people. It does not affect you if you are making a copy to install on your system.
This ruling affects the resale of items, not the copying of items. AFAIK, the GPL does not restrict your ability to resell, say, a Redhat CD. It does restrict your ability to, say, make and distribute a knockoff of Redhat *cough*Mandrake*cough*.
Is this post not nifty? Sluggy Freelance. Worshi
Besides, M$ has every reason to keep OEM software cheap, so that everybody installs their OS, and then later runs out and buys their applications.
So why isn't their OEM software cheap? An OEM copy of Windows is on average $10-$20 more than the retail "upgrade". For example, if the upgrade costs $95, the OEM version will cost $115. And with the OEM version, you have to buy at least a 5 pack to get it without a computer. You can't use the upgrade because it requires a previous operating system to be on the computer.
The reason for this is because Microsoft has a monopoly. They know that every computer you sell has to come with Windows or it's not saleable. So they can charge whatever they want for their operating system.
OEM office applications are slightly cheaper than the retail versions, but they often require the OEM version of Windows to be installed. So as a small computer dealer, you are likely not saving very much money on the full set of applications for the system.
The exceptions to all of these rules are large OEMs like Dell and Gateway, who have agreements to do the manufacturing and packaging of Microsoft OEM software for their own computers. They typically get a "license only" price. They also get a discount for providing their own tech support.
--- "So THAT's what an invisible barrier looks like!" - Time Bandits
This means that OEM's who want to continue selling PC's with Microsoft products will have to start charging more for the PC's.
And this will lead to more expensive PC's for everyone, since OEM's need to offer M$ products in order to be competetive.
Is this any different from a store owner opening up a bag of bite sized candybars and selling them despite the fact that they all have "this item is not packaged for individual retail sale" written on the label?
Amazing magic tricks
I find it interesting to note how a seemingly small article lacking a lot of specifics needed to truly understand this is found to be very newsworthy specifically about MS. I found the article generally uninformative about Microsoft...
However, after having read the article, (unless I misunderstand the article) I think this has more to do with every software vendor selling items in Germany. The whole spiel about how once an item enters the marketplace, the author loses some rights to control the terms of secondary sales. This seems like a very big deal considering how big secondary sales are. This ruling could have a serious effect on sales of software in Germany. Its a ruling that may cause serious reform. If I am a big software company, do I want to sell it to a secondary sales company and lose my rights to protect the terms under which that item is resold? This would definitely worry me as a secondary sales company, while the big companies might begin to shy away from contracts for this sort of product sales. This ruling seems like it would be big for any type of vendor in Germany...and it definitely will be interesting where it will lead to.