Microsoft Software for Sale, Slightly Used

Alsee writes "The Register reports that recent UK business Discount-Licensing.com has been having booming growth reselling pre-owned Microsoft software licenses 20-50% below retail, after spotting the opportunity in Microsoft's licensing terms and Britain's insolvency laws for insolvent and downsizing businesses. Sorry, no discount personal OS resales, corporate bulk resales only."

Comments

What a crazy idea!-The Leaning Forum of "/."

[Anonymous Coward]

"I wonder how long it is before the BSA finds some way of shutting these people down."

And if they don't, you'll never hear about it on this forum.

This is legal in the US too

[Anonymous Coward]

This is legal in the US too. And protected under the "Doctrine of First Sale", much as the software companies would like it didn't exist.

"US copyright case law supports that consumers cannot make copies of computer programs contrary to a license, but may resell what they own."
http://en.wikipedia.org/wiki/First-sale_doctrine

"Software publishers claim the first-sale doctrine does not apply because software is licensed, not sold, under the terms of an End User License Agreement (EULA)."

but if it's licensed then one should be allowed to make backups of the disc or receive a replacement disc if the disc gets lost or damaged. Software companies will argue either way where it suits them.

they can't have the cake and eat it. It's either or

Re:This is legal in the US too

[ChristTrekker]

The exact same argument applies to the media (**AA) corps too (IMHO, IANAL). If I'm licensed to watch/hear your product, then replacing the physical medium or getting it in a different format should be a very nominal (pennies!) charge since I can show that I've got a license for the product. If I'm buying a copy of the product for my own, then how do they have any right to restrict what I do with my copy for my own use?

Re:This is legal in the US too

[deblau]

Let's be careful to dissect the different rights granted to a copyright holder.

Here is the distribution right:

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: . . . to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending. 17 U.S.C. 106(3).

Here is first sale doctrine:

Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord. 17 U.S.C. 109(a).

Note that section 109 uses the word "owner" -- the one who controls title. The law makes a distinction between owning a CD (as plastic), and owning the music or software on that CD (as bits). In order to invoke first sale doctrine, you have to own the copy of the software, or be authorized. Now let's have a look at a typical MSFT EULA:

3. RESERVATION OF RIGHTS AND OWNERSHIP. Microsoft reserves all rights not expressly granted to you in this EULA. The Software is protected by copyright and other intellectual property laws and treaties. Microsoft or its suppliers own the title, copyright, and other intellectual property rights in the Software. The Software is licensed, not sold.
(MSFT retains ownership of the software)

13. SOFTWARE TRANSFER. . . . Transfer to Third Party. The initial user of the Software may make a one-time permanent transfer of this EULA and Software to another end user, provided the initial user retains no copies of the Software. This transfer must include all of the Software (including all component parts, the media and printed materials, any upgrades, this EULA, and, if applicable, the Certificate of Authenticity). The transfer may not be an indirect transfer, such as a consignment. Prior to the transfer, the end user receiving the Software must agree to all the EULA terms.
('the owner authorizes')

There are some who argue that software licenses are effectively sales. I tend to agree, because MSFT no longer controls the software. However, with 'activation' and other 'phone home' software, this may not really be the case. If MSFT exerts control over my PC from Redmond, then they have a legitimate claim that I'm 'just a terminal'.

if it's licensed then one should be allowed to make backups of the disc or receive a replacement disc if the disc gets lost or damaged

Here is the reproduction right:

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: . . . to reproduce the copyrighted work in copies or phonorecords. 17 U.S.C. 106(1).

Here is the fair use doctrine, 17 U.S.C. 107:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the fac

Not at all like used anything else

[BadAnalogyGuy]

Typically, when you think of used goods, you think of worn out hand-me-downs donated to Goodwill or the Salvation Army. But software licenses are not anything at all like that. In fact, they do not wear out, nor do they have any physical form except for the paper they are printed on. They are purely logical constructs.

But IP owners would have you think otherwise. They want you to think that licenses are akin to the actual CDs that the media came on. One CD, one installation. However, this is prima facie ludicrous. One CD suffices to create a farm of PC installations, the only thing needed is multiple licenses for each individual installation.

So don't be fooled into thinking that buying CDs is absolutely necessary. All you need are valid licenses and you have the rights to install as many times using the same CD as you have licenses.

Re:Not at all like used anything else

[MichaelSmith]

But software licenses are not anything at all like that. In fact, they do not wear out

But they do become obsolete faster than most other products. The Windows98 license I own is pretty worn out in one sense.

Re:This probably won't last for very long.

[Ironsides]

Something tells me that Windows Vista and future versions of Office, etc. will probably restrict their licenses somehow to prevent this. Some company had "net saving in the region of £10,000." That means Microsoft probably lost a lot more than that.

Microsoft didn't "lose" any money on this sale, neither did they "make" any money. This is similar to me buying the Monopoly(tm) board game at a garage sale. Parker Brothers neither lost nor made any money on the deal.

Good and Bad

[ajs318]

On one hand this is good because it reaffirms such doctrines as "fair dealing" and "exhaustion of rights", which are statutory rights that cannot legally be abridged by contract. On the other hand it is bad because it perpetuates the myth of dependency on Microsoft {though I suppose I shouldn't complain about that without actually trying to do something positive, like build and try to sell a sexy little all-in-one business server based on i-tal software}.

Disclic aren't doing anything illegal, nor are they doing anything wrong {an important distinction in the UK, where many things that are not wrong are technically illegal, and many things that are wrong are not illegal}. I'm sure Microsoft would like to have a pop at them; but I don't know of anything that they could actually make stick. And if they do try, it will almost certainly call into question the legal enforcibility of EULAs in the UK.

Re:What a crazy idea!

[caffeination]

If those are the examples you're using to back up your point, then I'm afraid you're not going to convince anyone. And why should consumer rights be subject to the exact same moral conditions as every other facet of society? That doesn't make any sense whatsoever.

Re:What a crazy idea!

[Anonymous Coward]

Maybe a refresher course in criminal vs. civil law would do you good. The examples you named are all crimes. Reselling otherwise completely legal stuff cannot, should not, be bound by a non-binding unilateral civil 'contract'. Oh, and by the way, surely it's a crime to drive a car you own if you're unlicensed. But you can resell it, right ? There goes your strawman..

Re:This probably won't last for very long.

[gameforge]

Software makers (Microsoft) would have you think that you did indeed rob GM when you bought a used car.

Remember also, cars wear out and die; a used software license installs and works perfectly every time. The CD might wear out, of course, but that's not what you paid for (that's why backing up any piece of media should always be legal... you didn't pay $300.00 for a $0.03 piece of plastic, you bought the numbers recorded on it).

You could argue that software goes obsolete; but the company that saved all that money that I was referring to bought older licenses of Office XP, which isn't the newest Office. They would have bought new licenses to Office XP from MS, but instead bought used ones. No matter which way you cut it, MS lost a sale, a potentially high value sale. I don't know of anywhere else you can go to buy used licenses to MS software in bulk.

I don't believe software makers should have the right to this "forced non-resale" licensing; I'm just pointing out that it's costing MS a lot of money, and if they can stop it (which it sounds like they can't, even in the US) they would love to do so.

Re:Here's how they will "fix" this

[ajs318]

So if the license says you can't transfer it, you can still transfer it?

Yes, because the Law of the Land says you may transfer a licence -- and rights given to you by the Law of the Land cannot be denied to you by entering into a contract. That's what the magic words "Your statutory rights are not affected" mean. It's also the reason why EULAs have a severability clause; that's the bit that says if any provision is found not to be applicable it shall not prejudice any other provision.

Does that mean that if it says you can't install the software multiply that you may indeed install it as many times as you want?

No, because the Law of the Land does not say you may install it as many times as you want. Though, you might argue in court that this constituted Fair Dealing {a deliberately ambiguous term: it is for the courts to decide what does or does not constitute fair dealing}. If you were successful, you would set a precedent.

Does it mean that licenses are completely worthless to the licensor?

Pretty much so, yes.

Are you a lawyer?

No, but I know my rights.

Re:What a crazy idea!

[hey!]

What a crazy idea - the thought that you actually can do what you want with something you purchased.

Well, it would be, if Microsoft sold sofware.

Which they don't.

Whether you think i's a good idea for society or not, they sell licenses. A license by its very nature is more ambiguous than ownership, because it is, at its heart, an agreed upon, ungoing relationship between the licensee and licensor.

So, what is going on here is something a bit extraordinary. It's saying that licensees have in certain cirumstances the ability to transfer their relationship with the licensor to a third party, without the licensor's consent.

Small things show just how bad it is.

[twitter]

On one hand this is good because it reaffirms such doctrines as "fair dealing" and "exhaustion of rights", which are statutory rights that cannot legally be abridged by contract.

Wow, I'm underwhelmed.

Wake me up when you can sell the crappy CD that comes with your non-naked PC the same way you could sell it's floppy drive, the manuals or any other worthless component. It's funny they want to extend all of the limitations of physical property into the binary world and then binary limits into the physical world.

Re:This probably won't last for very long.

[Penguinoflight]

Thats not actually correct. When you buy Monopoly, you are enforcing Parker Brothers market dominance, and adding to the original value of their product. If I know that I can sell monopoly for $2 after playing it for 5 years, it is worth $2 more than if I cannot sell it.

From another perspective, if the person who previously bought a parker brothers product has spare spending money, they will be somewhat more likely to buy another parker brothers product (this last one is influenced highly by the satisfaction of the customer).

So basically from customers making these sales, Microsofts product now has a higher value. Considering that most of the licences being sold are not the same license that microsoft is selling now (e.g., selling 2k for xp upgrade), the offering does not lower demand for the new product, and there is an overall increase in demand.

If Microsoft is smart about this, they will increase prices of their new products rather than try to shut down another "racket".

Re:This probably won't last for very long.

[Scarletdown]

Some company had "net saving in the region of £10,000." That means Microsoft probably lost a lot more than that.

Microsoft didn't lose anything. They made their money from the original sale of those licenses which were then resold. That would be like claiming nVidia would be losing whatever the current retail value is of the used GeForce card that I may sell, since I have replaced it with a new one. They made their money off it already.