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Microsoft: You Need Permission to Sell Our Software
IEEEmember writes "Microsoft has objected to the sale of bankrupt KMart's Bluelight.com Internet unit to United Online. Microsoft's objection to the sale is based on the non-transferability of software licenses protected by copyright law according to the Reuters story on Yahoo! News. This action by Microsoft should serve as a warning to any corporation that has a significant investment in Microsoft licenses. Dependency on Microsoft licenses may grant Microsoft the ability to veto your business decisions."
Anti-Trust
I thought that it had been determined that first-sale applied to software. Is that only for home users?
I can't say that I don't give a fuck. I've just run out of fuck to give.
Would this really be enforceable? AFAIK, no legal precedent has been set regarding the EULA's where this provision is. Maybe this will provide a good test case with lots of money on both sides.
So if you sell your PC with the windows license to another person, say, your next door neighbour, it becomes an illegal copy of windows? or Am I way off here?
Therefore, are licences no longer an asset, and instead a liability?
How can one work around such pitfalls when selling, not a company per se, but instead a laptop or a used computer?
Are they able to tell us that we cannot transfer our licenses to the people purchasing our equipment?
Feh!
Let's say I've got a 500 person company, we've got a couple NT servers, workstations for the employees, etc etc...
If some company buys us, or we merge, do we have to replace all those? Even though we aren't a web operation, we use computers in our day-to-day activities....
IANAL, and IANAB (I am not a businessman)
Yet another reason to use free software...
Seriously, when an organisation is being sold as a unit, the vendors' interest in any icensed stuff is part and parcel of the deal, and transferable, just as any other property rights - Microsoft is just trying to do its' usual bullshit.
This sort of rears it's ugly head every now and then. Honestly, MS is doing what everyone else does. Oracle, for instance, when we spun a company wouldn't let us transfer licenses to the new company; basically, because they want to resell all new licenses. Even though we had a license per person, since that person was in a new address, you needed a new license. Microsoft, unfortunately, doesn't care about the sale, obviously, they just want to be able to renegotiate a new deal with whomever buys the company. Honestly, I think the single greatest thing we could do in the IT industry is create a web-site where everyone puts in the prices they pay for licenses, hardware, etc. then we'd have all the information.
"This isn't a study in computer science, its a study in human behavior"
They're selling the business unit, not the computers themselves alone. They're selling the owner of the license. If i were a slave and had a license for Windows, and I were sold but the PC was still considered in some contrived manner to be mine and came with me, would I have to relicense? no. Because I'm licensed. How should that work any different for a business unit?
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
At first I thought this was uncompetitive action (but I'm sure someone else will scream monopoly), then I thought 'oh, but there are other choices in the market, kmart can go with them instead, so it is just weird' and then I read the article.
:-) and Intel said that Via didn't have the rights to manufacture them, and that the licenses were non-transferrable.
It is pretty weird, if you ask me. Some creditors (and Microsoft) are opposed to the sale of the internet unit because the licenses were made with kmart, and therefore can't be transferred. This sounds to me like when Via bought another company (was it a division of SiS or Acer or something?) that had license to make Pentium 4 busses (bussen?
I still find it odd that non-Microsoft entities are getting involved against the sale, but that seems more like a tax- and payment-avoidance issue than something directly Microsoftian.
fair.org counterpunch.com truthout.com indymedia.org salon.com
eff.org guerrilla.net debian.org gentoo.org
This is extactly what they want. Go after a company that has no chance of defending themselves in court and set a precedent that it is illegal to transfer software licenses in a business aquisition. Once they have this precedent, they can litigate larger business mergers or aquisitions. Thus requiring them to purchase all new licenses.
Imagine the revenue MS would have recieved if they forced the HP/Compaq merger to purchase all new licenses because they can't be transfered.
MS has 96% market penetration in desktop OS. There is no room to grow that business, unless they can force a legal requirement on businesses to buy more licenses in certain situations. They are obviously trying to "grow" their business.
On the other hand, Microsoft is objecting to the sale on the sole premise of possible lost future sales. If bluelight.com is sold, Microsoft thinks its new owner should have to pay for all new software licenses, even though K-Mart already bought licenses once.
IANAL so I've always wondered about the following: Let's say I have a company and I build a bunch of for-internal-use-only custom modifications of GPL software. That seems fine by GPL standards.
But...
What if I decide to sell my company? The software I've developed is certainly an integral part of the value of my company. Would GPL require me to publish all of the modified source code if I sell the company?
~~~~~~~
"You are not remembered for doing what is expected of you." - Atul Chitnis
Dear World,
IMHO...Microsoft wouldn't be pushing this if Bluelight.com and United Online were textile companies. They are Internet Service Providers and as such, direct competitors of MSN. Microsoft is on a 300M push of MSN now, so they need to disrupt its competition.
Companies change hands all of the time. Have you heard about this happening before? I haven't and suspect that you haven't as well. So, what's he real motivation? I say it is to help MSN by preventing the sale.
Later,
-Slashdot Junky
.
Landfill Mining Co.
Managing the (Un)natural Resources of Tomorrow
Comment removed based on user account deletion
So we have telecoms like Cisco and Nortel selling far too much equipment like routers and switches a few years ago to hundreds of companies that didn't survive the dot bomb. Now they can't move new equipment out into the market because the equipment has been sold off to clearing houses at ridiculously small fractions of their purchase price, then being sold again by these clearing houses to companies still standing for a considerable profit (but still far less expensive than new from Cisco or Nortel).
I'm sure the telcos would just LOVE to include a "cannot resell" clause to equipment purchases, but they can't (can you just imagine some of the other clauses they'd eventually have to put in, "this router cannot be used in the illegal transfer of data, as defined by the DCMA"). Why should MS (or any other software company for that matter) be able to restrict the sale and transfer of licenses, so long as the original owners have no copies remaining? They're no more deserving of assured profit via new product purchases than the telcos are.
Is the nerve that they have to say this. Basically, what they're claiming is that even thought Kmart paid for the licenses, it can't resell them without Microsoft's consent. This has nothing to do with a EULA - Kmart is not the end user. What Microsoft is asserting is that buying something from Microsoft no longer entitles you to the rights of ownership.
The real reason why this is important is because this was a software sale, not a license. Microsoft sold Kmart the licenses. Unlike most users of Windows, which merely license the code, KMart bought licenses with the explicit purpose of redestribution, and now Microsoft is claiming that Kmart cannot sell what it legally owns, because of copyright restrictions. But Microsoft didn't license the software, they sold it as a commodity. So copyright shouldn't apply.
The society for a thought-free internet welcomes you.
Its nice to have a BSA audit, and take them out back, open up a big cardboard box, and show them the boxes[...]
It's nice to get fucked up the ass by some private organization, acting as though it has the authority to execute a search warrant without probable cause, in order to determine if you have "boxes" (and licenses) to all your copies of Microsoft software? That's your idea of fun? When the BSA knocks on my office door, demanding their audit, I'll slam the door in their face. And when they buy a search warrant from some pliant judge, I'll gladly show them Linux installed on hundreds of desktops and servers. Seriously.
Frankly, given the management hassle involved with MS licensing, never mind the potential risks even if you're legit, you'd have to be an idiot to deploy Windows en masse given Microsoft's current licensing crackdown. I know many organizations who are ripping their MS server infrastructure out in preparation for a potential migration to desktop Linux should the situation get worse. MS is walking on thin ice here. JMO!
--Maynard
...is, is Microsoft basing it on a license the KMart customers sign, or on a license KMart signed?
If it's the customer's license, then, hot damn, we've got a smoking gun for monopolistic practices.
If it's a license KMart signed, well, then Microsoft is perfectly within their right.
What's this Submit thingy do?
It's very odd that first sale seems to be overshadowed by the EULA. Granted we have a license, but the same could be said for a book. I bought a physical copy of the book and therefore I can sell _that_ copy. I should be able to sell the copy of software I purchased. If I recall, there was a case where a company was breaking up bundles of Adobe software and reselling them. This was deemd legal under the first sale doctrine. This may be because the company never installed, and thus agreed to the EULA (if someone has the case, please post), but it should not matter. EULA became a big item in the 80s when the idea of software being copyrightable was untested. Now the courts ahve ruled that it is copyrightable, so why should they be able to trump copyright, fair use and first sale doctrine by the EULA?
It seems that selling the assets does not allow you to get the licences. However, if someone buys the whole company, wouldn't the licences go over? Because the new entity subsumes the old, and is bound to all its obligations and contracts, which include the right to use the software.
It's not wasting time, I'm educating myself.
Well that makes it all right then.
As other posters have noted, this isn't uncommon; Oracle comes immediately to mind, for example.
But more surprising is Network Appliance's used equipment policy. You can resell your netapp equipment, but you can't transfer the license. Instead the buyer mustalso buy a new license...which coincidentally costs the same as a whole new machine!
Comment removed based on user account deletion
Actually, driving a car is a privilege, thus a drivers license is a privilege license. Driving is not a right. You cannot sell your privilege to do something to someone else that dosen't have the privilege.
OTOH, I can sell or give away my licensed 'rights' to MS software. They even have established procedures to allow for the transfer. Remember the ruckus over donating computers to schools? MS contends that the entire computer package must be transfered, computer and all original license/media and any upgrade license/media. This method works for corporate and individual donations. The same applies for selling used computers.
They are now moving to registration codes, they don't seem to want to follow the precedent that they established.
Kindness is the language which the deaf can hear and the blind can see. - Mark Twain
Remember when Adobe sued that guy for breaking up the Adobe packaged software and sold them individually. Adobe sued for voilating the license. The judge ruled that the seller had the "Right of First Sale" and was permitted to sell the software.
The same holds for K-Mart. They own the software licenses, they have the right to sell their license to anyone, and I am confident the court will hold as such.
Do you recall a MS FUD campaign having to do with donating PCs telling recipients not to accept the PCs without the software licenses that go with it? Aren't these licenses ALSO non-transferable or am I missing something?
For MS to warn people against accepting free hardware without the software would seem to be encouraging piracy somehow wouldn't it? After all, MS clearly does not respect license transfers. So in the end, MS has been telling people to require non-transferable licenses and to operate these donated PCs illegally.
Makes ya wonder doesn't it?
Obviously it depends on if K-Mart management had agreed in writing with a Microsoft sales representative to a specific license which explicitly removed the right of transfer for a reduced price. This is possible, in which case they should, under normal circumstances, have the right to license their copyrighted work with this restriction. However, if the set of licenses are OEM and bundled with each individual machine (the hardware as a product purchased from a vendor) on purchase, and further they were purchased without a clear and written contract signed by both consenting parties, then I think MS doesn't have a leg to stand on. Finally, I think it's very fishy that a convicted monopolist is invoking restraint-of-trade clauses in their shrink-wrap and bundled licensing deals as an impediment toward transferring a software asset legally purchased. Any contract lacking reciprocity or a misrepresentation of terms is null and void even if signed by both parties.
All this said without a law degree or any experience practicing law. Correction(s) by real lawyers encouraged.
--Maynard
you wouldn't have to worry about NDAs. the person who would be contributing licensing information to the website would only have to give information as to how much, for how many. or something along those lines.
andrew
Why did I lurk so long before registering for a Slashdot account? I could have had a Slashdot ID of less than 100000.
Who knows how much Kmart owes MS? In bankruptcy situations, often suppliers have little room to negotiate for their money. Effective day 1 of bankruptcy, Kmart no longer had any obligation to continue to pay their suppliers.
Perhaps this is MS way of garnering some attention in the Chapter 11 proceedings -- to make sure they get paid.
From the Article:
"Lenders led by J.P. Morgan Chase & Co. Inc. (NYSE:JPM - News) also filed an objection, saying the proceeds from any sale should be reserved for the creditors and not go directly to Kmart.
However, Kmart said it had a roughly $18 million administrative claim against Bluelight.com, which would have to be paid in full before unsecured creditors -- including lenders -- received anything. "
?sp
I'm a bit confused as to what MS is complaining about. The company I used to work for did the consulting, design and implementation for bluelight.com -- we used a farm of linux servers -- not a single license of Microsoft software is being used in the production server environment.
Hmm... so could they be complaining about the individual MS Office and MS Windows licenses that are sitting on the desktops of the front-office employees?
If so... YEESH -- that'd be REALLY picky and cheap of MS to do so (although, I guess I wouldn't be too surprised).
Kmart said the sale included one server license and 25 desktop licenses it bought from Microsoft.
All this over 25 licenses? Who cares about 25 licenses? This isn't even worth the "evil lawyers" fees?
There has got to be more to this story. Maybe Microsoft legal just sends out a boilerplate document and objects to any and all Chapter 11 filings. I'd like to know more about this story if anyone has more details.
Stories like this are great to save in my file and drag out for the next Open Source vs. Proprietary Software license debate.