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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."
If this stands, Microsoft has successfully become the deciding party in all major corporate mergers and aquisitions. Who is going to buy another sizable company knowing that they'll be forced to relicense all of their software?
Talk about extending your monopoly.
IMO, nobody at Microsoft believes that they will lose in the long run, and that's made them both overcomfortable and vulnerable. The more they tighten their graip, the more syste^H^H^H companies will slip through their fingers.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
A good warning to people to actually pay attention to what these travesties actually say.
When my former employer went belly-up they sold licenses as they were assets of the company. What Microsoft is, in act, doing is making their software a non-asset, consumed immediately and utterly worthless beyond that. That's a pretty piss-poor business plan, for both parties.
A feeling of having made the same mistake before: Deja Foobar
Seems like they can't win. First they have aggressive tactics from Wal-Mart, basically putting them out of business in many cities.
Now Target's making a bid for power, and Wal-Mart is scurrying. KMart is left in the dust. (By the way, at Target, I notice an unusually large proportion of highly attractive women. Could Target be hiring cute 'mystery shoppers' kind of like the 'leaners' hawking cellphones at bars?)
So now Microsoft gets in on the beating. It's just dismal.
...
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"
First sale only applies in cases where it is not time/cost effective to litigate otherwise.
Unleash the hounds!
Fnord
Obliteracy: Words with explosions
According to the OEM EULA with Windows, the copy of Windows must remain with the hardware. The license is forever married to the box it came with. Microsoft caused a big stink about this a month or two ago, warning schools about accepting donated hardware.
Now Microsoft is saying that normal licenses can't be transfered because the software is copyrighted?
It was my understanding that a license was an asset. You owned it and you could transfer it. Something isn't sitting right with me here. There must be more to the story that's being left out. (Yea, I know, Microsoft is the Evil Empire. However, I still think there's more than meets the eye going on here.)
I was not touched there by an angel.
The article really doesn't provide enough information to make the assumption that Microsoft is making an unfair business decision on this point. It's entirely possible that Microsoft sold licenses based upon support contracts or a subscription-based service offered only to K-Mart, or possibly even custom code to drive the site. Without this knowledge it's difficult to make a valid assumption as to whether or not Microsoft is being unfair with this particular dispute.
This is probably the same reason Microsoft is objecting, with a business that large it's hard to keep track of all of your clients and what exactly they have from you. Would you allow a company to sell 10,000 licenses for software that you had given them on the basis that they were maintaining a multi-million dollar support contract with you? I don't think so, and though it would be up to the company to make sure the support contracts were upheld, this would only be the case if they were notified of this dependency and paperwork was filed, etc.
Microsoft may very well be in the right in saying "Hey, you should tell us what of our intellectual property you're selling before you sell it."
If there is a God, you are an authorized representative. - Kurt Vonnegut Jr.
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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!
Comment removed based on user account deletion
From what I gather, this isn't specifically a EULA issue in that the 'end user' agreement wouldn't necessarily state anything about this. I'm going out on a limb to guess that - as with most big companies - Kmart negotiated a blanket licensing deal with MS. THOSE terms most likely dictate that in consideration for 'less than market rates' for the software, certain terms apply. If Kmart actually paid 100% 'retail' price for each desktop, each SQL server, and everything else, they could probably simply abide by the 'transfer' clause in the standard EULA (you can transfer, but remove the original copy on first machine). I don't think anything's that cut and dried when you're talking millions of dollars and MS (or any other sufficiently large software house - could you easily transfer millions of dollars of Norton AV from one company to another? Or Adobe stuff?)
creation science book
It's dangerous to dismiss a major monopoly with a history of illegally abusing its position as just another company.
This particular instance might not be such a big deal, but the prescident it establishes should make the blood of anyone who relies on business for their livelyhood (aka, just about all of us) run cold.
The applications of this sort of thing extend way beyond K-Mart. Essentially, MS is reserving the right to decide who can transfer licenses and who cannot. This is life or death stuff, especially for any company which develops software for Windows (again, this is most development houses -- they can't escape to Linux even if it were a viable desktop replacement, which it's not).
So, in the future, all your business decisions would be "Is this good for us?" followed immediately by "Will this piss off Bill Gates?" -- this would seem to "discourage" anyone from competing with MS in any sector, esp. competition from startups (most successful startups end up being bought, after all; investors would not want to see the possibility of this eliminated).
Be afraid.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
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.
MS LICENSING AGENT [on phone, reviewing a file]:
I zee...this is all well and good, but I do not zee your PAPERS. You must have the proper papers! Vere are your papers!? Don't wait for ze phone delay--answer me now!!!
Vos teneo officium eram periculosus ut vos recipero is.
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
"There's only 3 certainties in the world, my Son: Death, Taxes, and Microsoft; and Microsoft makes the first two worse."
Table-ized A.I.
A license is a right to do something. You don't automatically have a right to sell your rights.
Do you have a driver's license? Can you sell me your drivers license (if I've lost mine?) You could sell me the piece of plastic it's printed on, but you would not be selling me the privlege to drive, and if I were pulled over the authorities would not allow me to use your drivers license to assert your privleges for myself.
(On the other hand, if all I needed was a piece of plastic to pick my teeth with, I could buy the plastic which represents your drivers license and use it as I see fit.)
The analogy to the sale of Microsoft products on Ebay fails only because (unlike the traffic cop) Microsoft has no effective way to tie the "License to Use" to a person (or a computer) and instead ties it to the media. Having the media allows you to "fool" the enforcement mechanism and assert a privlege to use the license in a way which (Microsoft claims) you do not have.
But that's where all the Passport, Palladium and .NET stuff comes in. Once they know that Mr. Ebay Seller's license number is tied to Mr. Ebay Seller's passport account, they can prevent Mr. Ebay Buyer from making use of the license he bought on Ebay. Mr. Buyer will instead have to buy a new license from Microsoft.
It makes me wonder; perhaps they already have that information and all the people who bought M$ software on Ebay (or obtained it through other license transfers) will one day wake up to find they can no longer use their license, and must buy a new one. Or the related question; if Microsoft asserted that my license key was registered to someone else, (and thus, I had no license) would I be able to prove they were wrong? Even if you bought the software legitimately, are you sure no one copied-down the license key before you received it?
The thing about things we don't know is we often don't know we don't know them.
Maybe this will provide a good test case with lots of money on both sides.
:-)
Yeah, except for the fact that one company is bankrupt and the other is Microsoft. Boy, bet that would be a fair fight.
And the masses cried out, "09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0!"
Such non-transferable license agreements will never stand up in court.
Reselling licensed software is no different than transfering ownership of a legally purchased music CD.
Last time I looked, second-hand record shops have been alive and well for decades.
US Court says buyers can unbundle EULA-covered software.
Also take a look at this very well argued thesis on the same issue. Same paper in HTML format
If KMart also sells off some of their Ford trucks, where would it be Ford's problem if the trucks were sold to someone else? Hell no.
If the contract KMart and Ford signed when KMart leased a fleet of company vehicles stated that KMart could not sub-lease those vehicles to other companies, and that contract was upheld as legally valid, you're damn skippy that it would be Ford's problem.
Microsoft IS able to determine what someone does with their licenses AFTER PURCHASE and WITHOUT SO MUCH AS A SIGNATURE as far as resale and transfer
Bet your ass that there is a signature, made at the time of purchase, in a large corporate licensing contract like this one.
Bet your ass that the poor KMart executive who put his John Hancock on the form is probably in the middle of his exit interview right now.
Microsoft has decided that since there are more than likely multi-millions of dollars "worth" of MS software involved with this transaction, they are going to step in and assert their "rights".
And what's wrong with that? No, really, I want to know what the problem is when an entity attempts to defend rights which were granted to it by law.
.Microsoft IS able to determine what someone does with their licenses AFTER PURCHASE and WITHOUT SO MUCH AS A SIGNATURE
Ahh but corperate wide licenses DO have a signature.
They are complete legal documents that are scouered over by corperate lawyers, revised, sent back and forth until they are acceptable and then SIGNED by both parties..
I know I recently had to shuttle around some software contracts for a simple little crappy app here... I finally gave up and forced the user to use a open source version that in the end is better anyways..
it is really good for your company to force the lawyers to hash over EVERY EULA and contract.. it forces the users to look at open / free version before fighting for 3 months for a stupid app that they really can live without anyways....
Out IT policy here has been "use FREE/OPen source first, closed with an EULA last." it was here before I started, and will be here a long time...
Do not look at laser with remaining good eye.
I agree. KMart got what they paid for. They wanted licenses for a proprietary software product and that is what they got. It's not like there aren't alternatives.
Just one more reason why the Free part of "Free Software" is so important. KMart has spent a great deal of money developing a software product (their website) and now they can't sell it because they based their work on Microsoft's intellectual property.
Just a little reality check; there is plenty to argue about here. What almost everyone in this thread seems to have ignored (and what makes the case interesting, despite the tiny dollars apparently involved) is that this is a bankruptcy proceeding. The question is not whether you or I can resell our MS products under the EULA, it's whether a bankruptcy court chooses to ignore the alleged "license" and deem the software an asset of the estate.
It is important to remember that Bankruptcy Courts, unlike ordinary courts, are not required to attempt to enforce the will of the parties to a given contract. Rather, they are supposed to look through the contract and determine whether the terms, as written, create a fraudulent (or otherwise voidable) conveyance. Consider the following: I know I am going bankrupt, but I want to save my Ferrari. I agree to sell it to you for a dollar. You agree not to sell it to anyone else for a year and to sell it back to me in one year for 100 dollars. In return you get the use of the Ferrari. We sign the contract, title passes to you and I declare bankruptcy. A year later I have discharged my debts, I'm free and clear and I enforce my contractual right to buy back my Ferrari for $100. Right?
Wrong. Such a contract would be voided by a Bankruptcy Court and you'd have to give up the car. You'd probably even lose the dollar you paid. The car would become part of estate and would be sold. The money would be used to pay creditors. This is called fraudulent conveyance. It's pretty complicated (and dull) and I can't begin to give all necessary details here but what is interesting about this case is that a court will decide whether the material effect of a purchase of software if to transfer ownership or merely to create a license right, regardless of the language in the EULA.
IAAL, and my guess is the Court will punt on it and come up with other reasons to permit the transfer.
"The true administration of justice is the firmest pillar of good government." - George Washington
You MUST contact Microsoft and establish that the license can be transfered. Period.
No. You are bound ONLY by the terms of the EULA that shows up when the software is installed (or that's included with the box when you buy your computer.)
Read the license, understand its terms, and all will be well. The license is "permission" to make copies of the software--and if the license is voided, you no longer have permission and need to talk to MS all over again. (Or just buy a stock license.)
That's truth. Not FUD.
Let's look at the statement:
" No - this is an attempt to pass on the truth. You are obfuscating the point of the story - Microsoft is FINALLY pointing out that your software licenses are THEIR property, not yours."
Sounds like FUD to me. The SOFTWARE is MS's property, but the LICENSE is whomever paid money for it. If you get a "license" that the person who originally aqquired it is not allowed to transfer, then you don't have permission.
You are guilty of spreading FUD, the same as someone who claims that code compiled with gcc needs to be GPL'd is. MS cannot surprise you with unforseen terms--not unless there's a "MS may modify this" clause in the license.
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?
Microsoft has hereby succeeded in defining software as a service instead of an asset, which is what they've been trying to move towards all along because it represents a more lucrative revenue model than selling something that can be used and used and used until you get decide you want something more.
It will be interesting to see how this plays out in the long term.
Fundamentally there's no reason why a bunch of instructions on a hard disk cannot be used a whole heckuva a lot more than till the next upgrade cycle. Neither is there any good reason I can see why it can't simply sold outright to someone else that wants to use it. Of course, when Palladium and hardware locking becomes tighter, time-bombed software will make it easier for this model to be enforced. Meanwhile, there's growing quantities and quality of free software that can be run AS MUCH AS YOU LIKE!This will mean that many current businesses may be severely overvalued. Their true worth in sale will be much less if critical parts of their infrastructure are not transferable.
You think Qwest's recent $4e10 write-down of its networks is large? How much have businesses invested in Microsoft software?
"Provided by the management for your protection."
Well MS certainly says you can't, but that doesn't mean that you're not legally allowed to. A corporation is under ZERO obligation to inform you of your rights or even to tell the truth about what you may or may not do in the license. It's somewhat like my the contract I signed as a condition of employment. Much of it is standard and reasonable, but a whole lot of it is completely unenforceable and would never stand up in court. It's just in there because the company figures that it will influence the behaviour of some.
I'm not saying that you ARE allowed to sell the MS software on a Dell under US law, but just because it's in a license doesn't make it so.
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