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Software Transferability? (or the lack of it)
"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?
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.
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.
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.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
"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.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
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.
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, from 1993.
IANAL.
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).
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!
So, is your software 'free' as in beer?
Uh, no. It is costs money as in prostitute.
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.
Letter To Iran
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.
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.
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.
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
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.
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!"
"It is a greater offense to steal men's labor, than their clothes"
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.
Any good could be considered as a service by that line of non-reasoning. (e.g. 'I bought a car' v. 'You bought the right to go places, not a car')
No, the truth of it is that you bought a copy of a work. Rather like a book. And a hundred years ago, it was determined that copyright holders cannot, merely by virtue of their copyright, restrict in any way, people from reselling that work. It's called the First Sale doctrine.
The question really is whether or not the licenses included with software are valid in whole, or in part, and if so, at what time do they become active? It has very, very little to do with software specifically, but rather contract law in general.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
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.
I do not have a signature
This is a horrible analogy. First of all, the First Sale doctrine DOES APPLY to recordings of Musical works - meaning when I buy a CD (admittedly it's a copy of a piece of art) I have the right to sell that CD to anyone whom I chose.
Hence used CD shops all around the world.
What's different about software is that you agree to the EULA before you open or install the software.
The real question is whether or not that EULA is even a valid agreement, since it attempts to nullify certain rights the courts have traditionally upheld, such as First Sale doctrine.
In a similar note, I remember reading about IBM getting into Anti-Trust trouble back in the 70's because they would NEVER sell their software or hardware. You HAD to lease it from them, meaning they never transferred ownership of anything to you.
Of course, from a corporate standpoint this makes perfect sense. Economically, a firm will always maximize profits if it only leases (either rights of use or whatever) it's products and services. My question is why no one ever thought to bring this up in the Microsoft case.
IBM was forced by the courts to sell products and software if they were also going to lease them. Of course, they continue to do both, but it's interesting that this was the focus of one of the most successful anti-trust cases in our nation's history, and yet somehow the DOJ missed it in the Microsoft Case.
Anyone have any ideas on how this doctrine has held up in the courts and how it might affect the future of Software as Services???
BJ Hoffpauir
Sr. Systems Architect
Time Trend, Inc.
www.timetrend.com
PS - I read about the IBM issue in "Proudly Serving My Corporate Masters" - a great book!!!
http://www.proudlyserving.com/
Bryan "BJ" Hoffpauir