Court Addresses Legality of Shrinkwrap Licenses

NullProg writes "This article here comments on a legal case where a shrink-wrap license may be binding. This a scary precedent for any developer who has added a feature to their software already present in a competitors version."

Comments

Re:Why not?

[Palarran]

Because the GPL agreement adds rights, whereas most shrinkwrap agreements subtract rights from those provided by US law.

A contract that I 'freely' enter into, in which I agree to become your property would be legally invalid, as an example. Certain rights cannot be waived. Not that I think the rights involved are inalienable, just that they shouldn't be so easily and totally abbrogated.

The arguement that you own the CD, but must be given additional rights to copy it to your computer, or into memory, is specious. US Law provides that such acts as required for basic use of a purchased product are not cases of copyright infringing behavior.

Re:Why not?

[SquadBoy]

"Should a closed source vendor be able to look over GPLd software code to see how something was done with the intention of using it in their products?"

No of course not and neither should anyone else be able to steal code. But this is about reverse engineering. And yes closed source vendors should have the right to reverse engineer any feature in any piece of software they see. But keep in mind that in order to reverse engineer something and be legal you have to have *never* seen the code. So the GPL and the BSD licenses are friendly to reverse engineering because the only thing those two licences concern themselves with is the code. This is not the case with shrinkwrap licenses. Without reverse engineering I would dare say that very few of us would have tech jobs just because things would never have moved as fast as they have. Also odd as it is to say MS should be on the right side on this fight because without reverse engineering they would not be around today. In short next time read the article before posting flamebait.

Re:Why not?

[Waffle Iron]

Why should shrink wrap licenses be any less binding then say the GPL?

Because the GPL expands upon the standard rights you have with any copyrighted work that you come accross (which by default are very few). The "viral" nature of the GPL only comes into effect when you attempt to redistribute the work. By default, you can't redistribute a copyrighted work at all (except for dwindling fair use exceptions), so even the part of the GPL that bothers everyone is actually a relaxation of restrictions on your activities.

Typical EULAs attempt to restrict your rights to an even smaller set than your default rights. Not only can you not redistribute the software (same as standard copyright) -- but they might, for example, try to prevent you from publishing benchmark results on the software. Standard copyright law does not prohibit you from benchmarking; that's where shrinkwrap attempts to come in with an additional (unsigned) "contract".

Good Motivation for Open Source?

[serutan]

At the extreme end of the spectrum, a world completely without the concept of intellectual property would also be without the overhead incurred by all this bickering. Does open source cut out most of this crap or just create new varieties?

Re:Good Motivation for Open Source?

[WetCat]

If you get your money from selling IP - then I'll be happy if you'll get that you deserved. Welcome to teaching, cattle feeding, heavy-equipment driving, even creation of software drivers for refridgerator door - get your money for doing REAL work. But not for artifical lawyer-inflicted burden named "intellectual property".

Re:Why not?

[pclminion]

But keep in mind that in order to reverse engineer something and be legal you have to have *never* seen the code.

I'm gonna have to stop contributing to Open Source projects then.

No, really.

If I could be sued for duplicating functionality which is present in open source products, just because I've seen the code, then I'll just have to stop looking at GPL'd code so I don't put myself into that position... For example at work I implement graphics pipelines (image manipulation). Since this is strongly related to, say, what Gimp does, this means I can't even look at Gimp source code because it'll put me at risk for some idiotic copyright infringement claim.

Sorry, Gimp project. I can't afford a lawsuit. I suppose I won't be able to contribute. I'm glad I've never looked at the Gimp code!

Re:Why not?

[Frater 219]

Because if you don't accept the GPL then you can't legally use the product.

Sorry, no. Section 0 of the GPL clearly states:

Activities other than copying, distribution and modification are not covered by this License; they are outside its scope. The act of running the Program is not restricted (...).

The GPL assumes that since you have legally obtained a copy of the program -- recorded onto a hard disk, CD-ROM, book, or other piece of your property -- that you already have the right to use it. In doing so, you're simply legally using a piece of your private property, an action to which copyright traditionally does not address.

Well-established, constitutionally upheld, internationally valid, largely uncontroversial Berne-Convention-class copyright only affects you when you copy, publicly perform, redistribute, etc. a covered work. It is only the experimental, alpha-test-quality, constitutionally untested, and controversial DMCA-class laws which attempt to extend copyright from the right to copy and publish to the right to enslave and deprive the user.

Re:Why not?

[DDX_2002]

Okay, IANAL, but:

Ignorance of THE LAW is no defence - the latin maxim is ignorantia juris non excusat - which means you aren't entitled to violate the copyright act/DMCA/whatever just because you haven't read them.

That doesn't mean that you can necessarily be held to contractual terms you haven't read or had brought to your attention. Contracts are bargains between two rational parties and are entirely voluntary. If you and the other guy don't come to an agreement, you don't have a contract. OTOH, the whole point of statutes is that they're not voluntary. In the case of the book, they can print whatever they like on the front cover, books are covered by the first sale doctrine and I can do what I please with the physical item. I can't make copies, except within the fair use exceptions, but that's a matter of copyright statutes not contract law.

The other problem with claiming a book license is that I have no relationship with the author or publisher so there's no privity of contract. If they shrinkwrapped it, so that I had to agree to certain rights to get the right to open the package and read, then you'd have something.

Re:Why not?

[TheOnlyCoolTim]

His argument is valid - if he looks at GPL image manipulation code and then writes his own image manipulation code, there is no way to remove his knowledge of the GPL code even if he does not intentionally copy. So it could be claimed that he learned how to write his code from looking at the GPL code.

In a similar vein, television studios and computer game developers often have to trash idea submissions from fans without reading them, since if Person A sends an idea to Company B, and Company B had already independently thought of and was working on Person A's idea, Person A could then claim that Company B had stolen his idea.

Tim

Fortunately, I've protected myself from EULAs

[Aexia]

with a Door-User License Agreement. By walking through my door, anyone, including the BSA, agrees to free me of any obligation due to a EULA or similar license agreement.

That way, if they try to claim that I'm bound by their EULA because I allegedly clicked a button after buying the software, I'll have an equally valid counter claim that they freed me of their's by actually walking through my door. Not my fault they didn't read all the terms and conditions before using my doorway!

The DULA is posted on the *inside* of the door, of course.

Re:Fortunately, I've protected myself from EULAs

[EvanED]

I like the idea :)

You have to give them the opportunity to exit though. Here's what I suggest: post a big poster that says "By walking through this door you agree to the Door User License Agreement (DULA), the terms of which are posted on the inside of the door." Make it big enough that that part won't be missed by anyone entering. Put it on the outside of the door.

Also, technically the BSA doesn't have the authority to void contracts between you and a company such as MS, so you'd have to add a clause like "The persons using said door hereby agree to furnish all disbursements incured by the owner of the structure located on the property at in any civil or criminal trials brought about by the persons entering said structure, any organisations they are associated with, and any organisations said organisations are associated with or anyone associated with any of the above." (With thanks to m-w.com's Thesarus for a couple of those words, to make it more complex)

Illegal to learn.

[FyRE666]

This is becoming ridiculous (actually the line where "ridiculous" starts was left behind several years ago I guess). As the article points out, reverse engineering is commonplace, and helps all software evolve and improve. The ruling effectively makes it illegal for any company, or individual, to learn and improve their products if their improvements have already been implemented by another company.

So a few decades ago, if someone had thought to use a switch block instead of 10 if{}else statements, it would prevent anyone else doing the same. Or maybe Carmack could have put the smack down on anyone else using unchained modeX and raycasting to create an fps.

Really, if the patent/copyright situation of today were in place 200 years ago, we'd still be riding around in horse-drawn carts and reading books (presuming said book was our own personal copy, not to be shared by any other family or friends) in our hovels at night by candlelight today. When are these companies going to realize that this pathetic squabbling is just serving the soul-less, grinning, moneygrabbing lawyers and they're just digging themselves into trenches so deep they'll never make it out again?

Absurd Statement Re: Intellectual Property

[reallocate]

The least I can say about such an absurd statement is that it is utopian.

Developers writing code are creating intellectual property. Do you want them to stop developing?

Artists create art that is intellectual property. Do you want them to stop creating art?

Authors writing books are creating intellectual property? Do you want them to stop writing?

Don't even think about claiming that "real" creators would continue to work for free. People need and expect -- and have every right to expect -- to derive revenue from the work they do. The nature of the work is irrelevant. Someone who creates IP has just as much right to be paid as your odd example of someone driving heavy equipment -- who creates a hole in the ground. Lawyers are available to both in the case of non-payment.

This kind of unreasoning antipathy to IP smacks of someone who thinks corporate lawyers invented it 5 minutes ago simply to keep him from stealing music.

Re:Absurd Statement Re: Intellectual Property

[gilroy]

Blockquoth the poster:

Don't even think about claiming that "real" creators would continue to work for free. People need and expect -- and have every right to expect -- to derive revenue from the work they do.

No, they don't. No one has a "right to expect to derive revenue". Hypothetical: I just punched six holes in the concrete blocks in my apartment. I think it's art. I also think that you're obligated to pay me for my art. After all, I have "every right to expect to derive revenue from the work" I do.

Of course this is just silly. Unlike grammar school, you aren't rewarded for effort. You are rewarded for success -- for providing a good or service at a price someone else is willing to pay. If you can't add value using your business model, then too bad... you don't deserve some handout to enable you to follow your model.

The guy digging a hole doesn't deserve a paycheck, either, unless there's someone who wants a hole dug enough to pay him. Or do you suggest he go around digging holes in people's lawns and demanding money?

The issue here, as with all intellectual output, is: To what extent should the state enforce a framework under which you can make money writing software? Because in the state of nature, you wouldn't be able to... it's too easy to replicate -- far easier than to create -- and so you couldn't sell your software. Someone could always buy one copy and then undercut your price.

We invent intellectual output law to create an artificial scarcity. This pumps up the value of the output. In return, the public expects this to encourage to production of new and better works, since there is an incentive. If the shrinkwrap license punishes legitimate reverse engineering and other competitive tactics, then it's pretty clear that the public's need is not being met. And in this case, the public should take its football and go home...

I don't know if "real people" create for free. I've seen a lot of damn fine amateur work, made with no hope of compensation and for no gain save the sheer joy of creation. And of course, Mozart went on composing even though no copyright law existed in his day. Of course, that meant he didn't make money off copies; he had a different model.

The field of intellectual output -- and the just compensation for such -- is much more complex than you seem to wish.

Re:Absurd Statement Re: Intellectual Property

[gilroy]

Blockquoth the poster:

To cut to the chase, I think any imagined economic structure that assumes people can't attempt to sell the product of their labors -- whether you are digging holes, teaching school, writing code or creating art that rivals Michelanglo -- is absurdly utopian and not worthy of serious consideration.

The issue is not whether you can attempt to sell me a copy of your program. However, in the absence of intellectual output laws, the attempt is likely to be met with laughter. Say you charge $500 for a copy of FrobozzWord. I might buy that copy from you and then, when anyone else came to buy from you, I'd offer it for $251. If I can make even two sales, I win. And you lose.

Is this wrong, if you wrote the program and I just bought it? For digital works, including software, the copy is identical and therefore exactly as usable. You hold no special position just for being first. Of course, in this sort of world, you wouldn't sell the program unless you could make enough on the first sale to justify developing it. It could be the end of mass-produced software and the beginning of a meteoric rise for mercenary programmers who freelance jobs.

Either way, it certainly could lead to a slowdown in the development of software, with a concommitant impact on the economy and indeed the standard of living for many people. As such, the industrialized world has evolved laws for intellectual output. These laws artificially produce scarcity. Now, your copy and my copy -- although they are exact digital duplicates, indistinguishable by any test -- are no longer legally equivalent. Yours is acceptable; mine is "infringing" and therefore legally invalid. As such, I cannot claim the copy I made of your program is exactly as usable, since (in a legal sense) it cannot be used at all. This creates a market for your software (maybe) and allows you to sell multiple copies, since the marginal cost of procurement is not zero any longer.

So far, so good. But this "copyright" is not a natural right. It's created by the state to meet the legitimate ends of the public; to wit, to spur innovation and creativity by offering incentives for people to create. If the execution of intellectual "property" law begins to significantly impede this end -- if the law serves more often than not to choke off creativity and slow the growth of the public domain -- then the public is entirely within its rights to reconsider the bargain. Then we might get something interesting happenning...

As a total aside, I said earlier "You hold no special position just for being first." This is not strictly true, of course. It would be natural to assume that, because you wrote the program (whereas I only copied it), that you would be an expert in it. You could more easily solve tech problems, tweak settings for particular users, and upgrade the software's functionality. I would be playing catch-up. One could even imagine making your expertise the marketable item. If someone needs the program and tech support enough, one can even imagine making a business model of this. And it doesn't rest upon intellectual "property" laws at all.

Re:Absurd Statement Re: Intellectual Property

[gilroy]

Blockquoth the poster:

I own what I create until I transfer ownership to another party.

And no one is taking that away from you... you still have your original file, picture, whatever. However, that is not the "property" of "intellectual property" -- or at least, it's not the bit that has everyone in an uproar. Your statement seems to imply that you have a natural right of ownership in the nebulous idea behind the program; in its very form and not just the particular bits on your computer.

I would argue that you have no such natural property right -- that in fact no natural intellectual "property" right exists ever. You have the manufactured copyright, which is a legal fiction enacted by the state to advance the public's interest in a vibrant creative field and a growing public domain.

Intellectual "property" law is based on a fiction, which explains why all justifications of it become so convoluted. Due to the unceasing efforts of the Content Cartel, we are trying harder and harder to match an inappropriate legal model -- physical property -- to an increasingly non-conforming phenomenon (intellectual output). Despite what Ecclesiastes tells you, there is something new under the sun... Intellectual output as a vast and growing fraction of the economy is a new phenomenon (perhaps two centuries, at best), and it is far from clear that old models will be applicable.

So... the state creates copyright, which purports to give you "ownership" of your intellectual output in all its expression. This mechanism is intrinsically a fraud, but has historically been a benevolent fraud. It didn't distort things too much, it created incentives to create, and seemed to more or less "promote the Progress of science and Useful Arts". The digital revolution has stripped away the incidental physical trappings that always tagged the production and distribution of intellectual output. This has, more or less by accident, revealed the intrinsically fictional nature of intellectual "property" -- ironically, just as that term gained adherence.

What we face now is a radical usurpation of power on the part of certain parties, callously upending centuries of common agreement and hoping, by throwing the framework into chaos, to cement the relatively new concept of "property" rights in intellectual output... Perhaps purely by chance -- but likely not -- this is done in such a way as to freeze-in current dominant corporations and to commoditize intellectual output. But what they have opened up (certainly without intent or willingness) is a complete re-examiniation of the whole intellectual output regime -- a review by (one hopes) an informed citizenry to ensure that the public's interest in the copyright/trademark/patent bargain is being guarded.

Would that such would occur...

Please read the linked article

[xigxag]

The article concludes by making the excellent point that if the United States chooses to cripple its technological development by the means of overly restrictive intellectual property licenses, it will eventually see the torch of intellectual leadership pass to other nations.

This can't be stressed enough. Most people don't understand what's wrong with e.g. some company owning the rights to jpeg practically forever. The average American couldn't care in the slightest about such things except insofar as IP laws prevent them from downloading mp3 files. We (Americans) really need to convince our friends, neighbors, Congresscritters, etc., that such laws are really a disaster for the country as a whole...because, er, otherwise...the terrorists have won!

Can't copyright an idea

[yerricde]

So it could be claimed that he learned how to write his code from looking at the GPL code.

You can't copyright an idea. United States copyright law, 17 USC 102, states that "[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work".

Don't fret.

[Chris Burke]

I'm sorry, but you really shouldn't base your future code contributions on a badly worded sentence on /..

Copyright law, the only thing which the GPL covers, applies only to a specific work. Example: A painting of a sunset can be copyrighted, whilst "paintings of sunsets in general" cannot. It is not illegal to study a particular sunset painting, then create a sunset painting of your own.

What this means for you and your (likely to remain ) hypothetical GIMP-contributing aspirations is that unless you actually copy the code that implements the features in the Gimp that you like, you have nothing to worry about. "A filter that does X" is not copyrightable. Even conceptual details such as "array of function pointers accessed with menu item id" aren't copyrightable. Thus the GPL doesn't apply to them.

Unless you either can't help but copy the GIMP code (or are too lazy to do otherwise) you have nothing to worry about.

Re:Why not?

[rgmoore]

This can't possibly be right, can it? What if I look at Apache code?

Nothing. Apache is released under a license similar to the original BSD license (i.e. free reuse without need to include the source code, but with an advertizing clause).

The programmer with the serious experience who would be most valuable on the project must avoid it, because they could be sued for copyright infringement.

Of course the flip situation is also quite likely. If you work on a Free Software program that's similar to the proprietary software you write at work, you're opening up that Free Software project to charges that they're stealing code from your employer. That's likely to be true no matter what license the Free Software uses. This is an inherent problem with our Copyright system, not something that's in any way restricted to Free Software.

It no longer matters...

[Lumpy]

I have came to the realization that I am a criminal in their eyes. and I give up, I throw my hand up and surrender.. and I ignore and blateltly violate their EULAS and the corperate laws. Screw em. It's only a matter of time before Open Source and Linux/BSD is deemed illegal because it is a circumvention device. So I decided that I am not going to abide by any of their EULAS. I ignore them and intentionally violate them! the software police can kiss my ass, I dont care anymore. I use a very tiny bit of non-free software... but I guarentee that I violate the EULA in one way or another. so I digress and I no longer care.

Screw em. screw em all... I now take the stance that anyone using software that has an EULA is a criminal, as I am a criminal... and us thieves will go on doing what we want and hoping and praying that they dont come knocking on our doors looking for our software.

I give up. Innovation is dead, thought is dead, freedom is slavery.

I really hope they're happy now... as they are creating a gigantic number of criminals by persuing their current path.

Re:It no longer matters...

[bnenning]

I really hope they're happy now... as they are creating a gigantic number of criminals by persuing their current path.

I know Ayn Rand isn't popular around here, but this seems appropriate:

"There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws." - Ayn Rand, Atlas Shrugged

??AA and BSA types want there to be lots of "criminals"; this gives them more ammunition for anti-consumer laws "needed to stop piracy". These laws in turn create more criminals; rinse and repeat.

Kids

[orbital3]

I've always wondered... couldn't you just have a kid come over and click "I Agree" on any EULA? As long as they're still children, they can't enter a legally binding contract with another party (at least in the US). So couldn't you get around the legalities of the EULA by having a minor click through? Surely not everyone who uses the software can be bound to the EULA if those people never were presented with a licensing agreement to agree to...

Re:Kids

[Dynedain]

Interesting idea. How many people have their children install software because the 12 year old is so much more profficient at the computer than the parent? At least in California, if the kid enters a legally binding contract ("I Agree") without their legal guardian also signing the contract, then it is null and void. Statutory Rape cases have used this to break up otherwise legal marraiges.....why wouldn't it be valid in a shrink-wrap case?

Re:Kids

[ckd]

the kid would be illegal because the kid would become your circumvention device to get around the EULA

And since it's illegal to manufacture a circumvention device, anyone concerned about the DMCA should definitely use birth control.

Re:Why not?

[fanatic]

A look inside "the Color of Magic" by Terry Pratchett show the following. "All rights reserved.

Gee that proves it. If you'd opened the book (after paying for it and taking it home) and found a licensing agreement requiring you to give the author and the publisher blowjobs on alternate wednesdays, would you be bound by that too? If so, I've got stuff to sell you....

Sorry, Jack, if you want anything more than the requirments of law, you better have my signature on some piece of paper. Otherwise, go away.

Wake up dudes! This has been the law for a decade

[werdna]

This article here comments on a legal case where a shrink-wrap license may be binding.

The Bowers case is scary, indeed, but it hardly breaks ground on the proposition quoted above. The Federal Circuit Opinion relies on a longstanding string of case law (including the 1996 7th Circuit opinion in the ProCD case) finding a shrink-wrap agreement to be enforceable. While the enforceability of shrink-wraps will likely be heavily fact-dependent (and possibly jurisdiction-dependent), there has been enough guidance for years for a well-advised publisher to have little doubt that purchase and use of her software will be governed by the shrink-wrap. In other words, "Shrink wraps done right are enforceable. Duh."

The scary result in Bowers is not the enforceability of the shrink-wrap agreement, but the enforceability of a particular provision (the no-reverse-engineering provision), and a holding that the Copyright law that permits reverse engineering DOES NOT PREEMPT a state contract claim. This is actually quite a huge(ly bad) result, and it is hard to distinguish the analysis of the Federal Circuit case from a hypothetical book with the "no fair use" shrink-wrap provision.

This isn't a question of offer and acceptance -- its a question of federal law being circumvented by an activist court.

Once Again, 17 USC 117 is ignored

[bwt]

The court followed the ProCD case, which directly conflicts with Vault v Quaid on the matter of whether state contract law shrinkwrap terms are "preempted" by federal copyright law.

Both ProCD and this court found that they were not because an "extra element" exists. Both courts got it wrong because they ignored 17 USC 117, which states that the "owner" of software can install it on a machine. In other words, installation is a first sale right by black letter law.

In particular, the negotiation that occurs during the contract of sale fully comprehends installation and use. The shrinkwrap offers nothing new to the purchaser, and therefore there is no "extra element".

Nimmer, the foremost authority on Copyright wrote a very long law review article specifically debunking ProCD's analysis on preemption. This court did a crappy analysis that wasn't even at the level of ProCD.

Re:Clean-rooming

[ninewands]

Actually, the way a proper clean-room project works is that one group of programmers analyzes the hell out of the target code and produce a product specification that is one heck of a lot more detailed than a "list of features". Basically, they produce a document that completely describes how the product will work.

This design specification is then turned over to a second group of coders who have never seen the target codebase. In a really good clean-room project this second group probably doesn't even know that they're working in a clean-room. They create a completely new codebase from scratch to fulfill the requirements of the design document. Since no one working on the new codebase have ever seen the codebase being reverse-engineered, there is NO issue of copyright infringement. The clean-room defense is even more airtight if the coders don't know they're working in a clean-room.

If both the target codebase and the end product are really well-written, I would not be surprised to see that large parts of the two codebases come out almost identical. Good coders will implement the same functionality in ways that are very similar, if not identical.