Software Transferability? (or the lack of it)

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?

Comments

Here is the skinny...

[Distan]

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!

Re:It is because of piracy...

[maetenloch]

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.

Re:because...

[Alien54]

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!"

First sale doctrine, etc.

[markmoss]

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.

Re:Nothing is special...

[ichimunki]

It does apply to tangible goods. People lease cars, the phone company used to own your actual phone, my cable modem belongs to RoadRunner, and just about anything in the world can be rented to own. The real difference with that stuff is that you have to actually sign a contract that clearly states the terms and agreements-- and you get to read the contract before you pay the money to the vendor. But in most of those lease cases, one of my terms of agreement is that I can keep the item in question by paying a fee (which would allow me to later sell it).

However, if I buy software from Best Buy or Fry's or Computer City without signing a lease agreement, in standard retail parlance I haven't leased (or licensed) anything. I *bought* it. I don't think we need to worry about Joe Sixpack revolting, Joe Sixpack will just bitch about it over Buds during commercials on TV. What we need is for corporations and businesses and people with legal ability to take a stand against this sort of crap, instead of knuckling under when the BSA comes calling with their extortion racket.