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California Court: EULAs are Inapplicable in Some Cases

(outer-limits) writes "In a significant ruling in a California court, a judge has ruled the standard EULA licensing agreement to be invalid. This must be the biggest upset in software licensing ever. No more are we powerless End Users of software, having to agree to every restriction a software company makes (Expect an appeal on this, though)." Note that this is about the resale of bundled software, so it's not like EULAs are dead, but this ruling could have broad effects. Update: 02/12 03:45 GMT by J : Yeah, this is a repeat - sorry.

19 of 361 comments (clear)

  1. Just out of curiousity by Raul654 · · Score: 4, Insightful

    When did the whole notion of buying software die, makeing licensing become necessary?

    --


    To make laws that man cannot, and will not obey, serves to bring all law into contempt.
    --E.C. Stanton
    1. Re:Just out of curiousity by cybermage · · Score: 4, Insightful

      Since the underlying protection mechanism is copyright, companies don't really want to sell it. I mean it would be really great to own Windows XP for a few hundred bucks and then to tell MicroSoft to cease and desist selling MY SOFTWARE. I'd love that. Ain't going to happen.

      Isn't that a tad facetious. If I go out and buy a book, that doesn't make me the copyright holder, does it? Why should software be any different?

      The copyright on the software is all they need to assert their rights. Anything else is lawyers covering their asses and marketing people scheming things.

    2. Re:Just out of curiousity by Frater+219 · · Score: 5, Insightful
      Since the underlying protection mechanism is copyright, companies don't really want to sell it. I mean it would be really great to own Windows XP for a few hundred bucks and then to tell MicroSoft to cease and desist selling MY SOFTWARE. I'd love that. Ain't going to happen.

      You are confounding buying a copy of the software with buying the copyright to the software. When you go to the store and lay down money for a box containing a CD-ROM of Windows XP, you are buying the copy -- not buying the copyright. This is rendered somewhat opaque not only by software makers' illicit "licensing" language, but also by news reports of companies "buying software" (meaning the copyright) from one another, e.g. "Microsoft bought Flight Simulator from SimLogic."

      The example of books usually clears things up. When I go to the store and buy Philip Pullman's The Golden Compass, I am buying a copy. I own that copy, and I may dispose of it in the usual ways I may dispose of any piece of my property. I may use it, alter it, destroy it, sell it to another person, write notes in the margins, and so forth. However, I do not own the copyright -- the right to make copies (identical or derivative) of Mr Pullman's novel.

      Moreover, I am not "licensing" anything. I do not need a "license" from Del Rey Books or from Mr Pullman to read the novel. I already have that right because the book (the copy, that is, not the copyright) is a piece of my property. I also don't need a license or other special privilege to comment on it in public; to excerpt from it under fair use in writing a review; to photocopy it at 200% magnification (and keep both copy and original) in case my vision becomes even worse; to lend the book to a friend; to donate it to a library; or the like. The book is mine, and I may do these things just as legally as I may burn it for fuel.

      I would need permission from the copyright owner only to exercise a privilege held exclusive to that owner under copyright law: for instance, to publish copies of it; to record myself reading it alound and distribute the recordings; to translate it into Russian and print that; and so forth. These (among others) are rights over which copyright law grants a monopoly to the owner of a work. Reading, selling, lending, and commenting are not.

      Here's another example, taken from patent law, which is similar though not identical to copyright. I recently bought a Ford Taurus car. I did not "license" that car; I own it, whole and entire. I own none of the patents that enter into the car's design, nor did I license any of the patents. Legally, may not manufacture and sell copies of the car. Yet I may sell the car, lend the car, modify the car to improve its performance or appearance (or for any other purpose), create aftermarket add-ons for the car and sell them to other Taurus owners, and so forth. I do not need special permission from Ford to do so.

      If you do not believe that you own the CD of Windows XP that you got from your local computer store, then here's a question for you: Destroying other people's property is illegal. If you take that CD and microwave it, whom have you wronged? In microwaving it, you have defaced the physical medium and destroyed the recorded work stored upon it. If that copy belonged to Microsoft, then you are guilty of a crime of vandalism or destruction of property. What do you think?

    3. Re:Just out of curiousity by wfrp01 · · Score: 3, Insightful

      I'm not responding to disagree with you, just to add my own little rant...

      We have laws. Laws are laws and you're not supposed to break them. But we have laws for a purpose. What is that purpose? Well, if you asked me, I'd probably respond with some vague handwaving generality like "to make the world a better place".

      Now when you start to have a conversation like this, it tends to veer off into dialectic diatribes about what the law "should" be. As opposed to what it is now. But if you head in that direction, you're sticking your neck out. You're questioning the law. The law which can't be broken. Are you some kind of demented criminal?!

      When it comes to issues of copyright and licensing, though, I think that's exactly the conversation that is most important. There are a lot of built-in assumptions about the utility of copyrights and licenses. We hold these truths to be self-evident (we have laws for christ's sake!). We compose paeons to these sacred cows.

      I don't.

      --

      --Lawrence Lessig for Congress!
  2. Key quote from the judge by coltrane99 · · Score: 5, Insightful

    "The Court understands fully why licensing has many advantages for software publishers. However, this preference does not alter the Court's analysis that the substance of the transaction at issue here is a sale and not a license," Judge Pregerson writes. If you put your money down and walked away with a CD, you bought that copy, EULA or no EULA." Quite a weakening of the standard 'anything goes' rule for EULAs.

  3. Not news, but certainly important . . . by werdna · · Score: 3, Insightful

    The Softman case is significant, if not for anything else, than for the plain, common sense, view that whether or not a sale is a sale, depends, upon whether or not the sale is treated by the parties as a sale. Thus, a person who purchased the software, but who has not loaded the software (submitting to the click-wrap) is typically able to rely upon the first sale doctrine (the rule that allows you to resell books that you have bought).

  4. Re:DUH. by thesolo · · Score: 5, Insightful

    Tell that to Microsoft, who was getting Ebay to shut down auctions of unopened, bundled software.

    And lets not forget when those Linux Geeks went out to Redmond a few years ago and demanded their money back for the copies of Win95 that came with their PC that they never used. Did they get their money back? No.

    Believe it or not, this IS an important decision.

  5. Re:wait for the years of appeals on this one... by Dwonis · · Score: 5, Insightful
    This ruling has absolutely no effect on the GPL whatsoever. Perhaps you should learn the law and read the GPL before you make claims that only serve to mislead others.

    The GPL does not govern use, only distribution of copies. If the GPL is completely invalid, then you have no legal right to distribute copies of GPL'd programs. EULAs, on the other hand, specify restrictions in addition to copyright, which this court has ruled to be non-binding.

  6. Acceptance of a Contract by bollocks · · Score: 5, Insightful

    One thing that I have always been curious about with EULA's has been how they can be considered binding if your agreement to the conditions comes after the completion of the contract (when you pay at the register). I don't know about US law, but I did study Australian contract law, and I seem to remember quite clearly that conditions added to the contract after the acceptance of an offer have no legal force.

    I also remember cases we studied where taking something from a shelf to the cash register and paying for it is considered acceptance of the contract. If you can't read and accept the conditions of the contract before you accept the offer (ie pay the purchase price) then you shouldn't be bound to those conditions.

  7. Re:DUH. by Spy+Hunter · · Score: 3, Insightful
    Here are the relevant portions of the ruling (italics mine):

    [quote]

    Courts have required that assent to the formation of a contract be manifested in some way, by words or other conduct, if the contract is to be effective. [...] In the instant case, the Court finds that there is only assent on the part of the consumer, if at all, when the consumer loads the Adobe program and begins the installation process. It is undisputed that SoftMan has never attempted to load the software that it sells. Consequently, the Court finds that SoftMan is not subject to the Adobe EULA.

    [/quote]

    The court made no decision on the validity of EULAs (in fact it explicitly skirted the issue by saying if at all). This is only affirming the fact that if you don't agree to the EULA by performing some action then you are not bound by it.

    --
    main(c,r){for(r=32;r;) printf(++c>31?c=!r--,"\n":c<r?" ":~c&r?" `":" #");}
  8. Disclaimer of warranty by stevenj · · Score: 3, Insightful
    I think software manufacturers should be able to disclaim warranty, just like you can in any other industry: by prominently labeling the product to be "AS IS, no warranty" before money changes hands.

    For free software that you just download (i.e. excluding vendors such as Red Hat), no money changes hands, so it should be enough to have the warranty disclaimer attached clearly to the downloaded package. (Or better yet, for gratis software there should be a presumption of no warranty.)

    I never understood how unilaterally imposed "contracts" that take away rights you have by default under copyright law, and which you can't even read until after the sale (much less negotiate) could be held up as valid.

    --
    If a thing is not diminished by being shared, it is not rightly owned if it is only owned & not shared. S. Augustine
  9. Re:Is EULA Legally valid? by tkrotchko · · Score: 3, Insightful

    "Now zoom back to the Kmart cd, it said I cannot open it and return. What's the difference here folks? "

    This is a straw man argument.

    What MS's EULA's say is that if you want to sell the bundled software *you can't*. That is, the EULA says the software is an integral part of the hardware.

    Lets push that aside and use an example. You want to buy a Dateway 2000 computer but it has MS Office bundled with it. Great. You already own a copy. So you don't need the copy of MS Office.

    Dateway won't sell it without the MS Office.

    What should you do?

    1) Refuse to buy the computer - maybe. But the price is okay, and you really want a Dateway.

    2) Buy the computer, and install the 2nd copy on your laptop - great idea except for one thing. The EULA says it belongs to a different computer. That seems silly right? You don't want to be a "law breaker" so you go with...

    3) Buy the computer, and sell the new copy of office to your buddy for $50 - great, except this is the same as #2 above.

    #2 and #3 don't make sense from anybody's viewpoint except MS's. They sold me a copy, and I can do with it whatever I want as long as I'm not violating the copyright. #2 & #3 don't violate a copyright, but they violate the EULA.

    What the court appears to be saying is that when you buy software, you can treat it like a Music CD, or a book. MS may not like that use, but nonetheless it makes sense to treat software like a book.

    --
    You were mistaken. Which is odd, since memory shouldn't be a problem for you
  10. Softman v. Abode, done TWICE before on Slashdot by Seth+Finkelstein · · Score: 5, Insightful
    This is the Softman vs Adobe case, which has already been covered on Slashdot before, not just once but twice

    And it's months-old news by now!

    Grumble, grumble, are front page slots really going begging? It's unseemly to complain. But at a certain level, it's very sad that I can't get any Slashdot coverage for my anti-censorware work these days, because of What Happened To The Censorware Project (censorware.org) while months-old news is recycled over and over. Really guys, if you need a good story, I have plenty of deserving ones that are languishing for lack of journalistic backing!

  11. Re:An observations about the ruling by acceleriter · · Score: 3, Insightful
    Are you kidding? The software vendors want to have their cake and eat it, too:

    - You can't resell it. It's licensed.

    - Your CD melted? Sucks to be you. Guess you'll have to buy another one.

    In an ideal world, the claim that software is only licensed would require lifetime replacement of media for the cost of shipping, and would at least make copy protection a bit less of a shafting for the public.

    --

    CEE5210S The signal SIGHUP was received.

  12. Re:wait for the years of appeals on this one... by haruharaharu · · Score: 3, Insightful

    Now, the real question is: can a COPYING file in a tar file count as a license, when the user doesn't need to sign a contract or indicate their affirmative agreement to the license terms in any way?

    You'd better hope so. If it doesn't, then you have no right to distribute the tar file.

    --
    Reboot macht Frei.
  13. Tested in court? by andaru · · Score: 3, Insightful
    I have often wondered about this. Does anyone know if this has been tested in court?

    I remember opening a copy of the Borland C++ compiler on floppies. There was a little circular seal on the envelope and a notice which said that breaking the seal constituted agreement.... I cut the envelope open and left the seal intact (which basically amounted to a private joke between me and the envelope).

    But seriously, Mr. Jones (who knows very little about computers) has Jimmy from down the street come over and set up his computer. Jimmy may agree to all sorts of licences while installing all of the software that came with Mr. Jones's system (Mr. Jones is in the kitchen making a souffle during all of this). Mr. Jones hasn't agreed to anything (except maybe to share the souffle), so he isn't bound by any licence.

    Jimmy may even install some software he pirated. Mr. Jones may think that the software came with the system (or is part of the OS, as if he would know the difference).

    Ignorance of the law is not supposed to be an excuse, but what if the average person cannot reasonably be expected to know if they are breaking the law?

    --

    Why is Grand Theft Auto a much more serious crime than Reckless Driving?

  14. Re:Good deal! by Sabalon · · Score: 3, Insightful

    You buy the software - money is gone. You take the software home, you open the plastic wrapping and the box. You read the EULA, which comes up as you install the software from the media.

    You decide you don't like the terms of the EULA and refuse to accept and take the software back, and you are told "Sorry man...we can't give refunds on open software, music, or videos unless they are defective. Then we can only replace for the same item."

    That just doesn't sound right. At least the EULA's should be printed on the box where you can see them before buying.

  15. Re:For the umpteenth time: GPL != EULA by Frater+219 · · Score: 5, Insightful
    The GPL does not restrict your rights under copyright law.
    Well, it may not restrict you, but you have additional responsibilities. Namely if you make changes you then release to anyone else, you must then also public the source, and attach the same GPL license to that code...
    That's not quite accurate. You might want to reread the GPL, particularly section 3, which governs redistribution options.

    First off, the GPL doesn't impose any "additional responsibilities" upon you (the licensee of a work) -- it just grants you specific rights, and doesn't grant you others. It grants you the right to release source-and-binary, GPLed derivative works. It doesn't grant you the right to release binary-only derivative works. Releasing source when you release binaries isn't an "additional responsibility"; it's just a term of the right you're granted.

    Second, the GPL never requires that you post source publicly. If you give me binaries, you're required to give me source. So it makes sense that if you post binaries publicly, you should post source publicly to ensure your obligations are discharged. But if you're a consultant working for Frobozz Magic Corp. and you customize gcc for them, you don't need to post your diffs publicly at all; you just need to give them to Frobozz.

    This second point is important. Some non-GPL licenses require that you give your changes back to some particular party -- usually the original author or current maintainer of the code base. The GPL doesn't enforce that kind of centralization, even with "the public" as the particular party. The GPL ensures that the users of a binary have freedom to get at the sources; the "public review" thing the open-source folks are on about is a nice side effect.

  16. Re:wait for the years of appeals on this one... by Frater+219 · · Score: 3, Insightful
    Because Red Hat gave up the right to first sale when they agreed to the GPL. Red Hat was deprived of it's right to distribute CDs without distributing source.

    Nope. Remember that Red Hat is distributing other people's code, not their own. In the absence of the GPL, Red Hat has no right at all to distribute (for example) Linus's code -- with or without source. If there were no GPL (or comparable license), then in printing and selling its CD-ROMs Red Hat would be violating Linus's copyright. With the GPL in place, Linus has granted unto Red Hat a limited right to distribute Linus's code: a right to distribute it with source but not without. If Linus placed his code in the public domain, or sold the copyright to Red Hat for that matter, Red Hat would have an unlimited right to distribute it -- but he hasn't done that.

    You don't have to "agree to the GPL" to be bound by its provisions when you copy GPLed software, because all the "restrictions" of the GPL are actually just the plain old ordinary restrictions of copyright law, by which you were already bound. The GPL isn't a "license agreement" -- a contract -- but rather a "license" -- a unilateral grant of limited rights. It says "You may do these particular things with my code (distributing with source) which otherwise would be illegal -- not anything you want, but some particular things. Other things (distributing without source) remain illegal as they were already."