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Federal Court Says First-Sale Doctrine Covers Software, Too

New10k writes "The US District Court in Seattle has rejected Autodesk's myriad arguments regarding its software licenses and found in favor of eBay seller Timothy S. Vernor. The ruling started by ruling that Vernor was within his rights to resell copies of AutoCAD Release 14 he got in an auction. Once the court settled the legitimacy of reselling, it used that ruling as a lens to dismiss all of Autodesk's various claims. More than once the court described Autodesk's arguments as 'specious' and 'conflicted.'" Autodesk managed to have Vernor's eBay account pulled, after he listed for sale copies of AutoCad 14. He sued Autodesk in response.

12 of 509 comments (clear)

  1. Workaround by Anonymous Coward · · Score: 5, Interesting

    Can autodesk skirt this by making its software connect to an autodesk server and validate the presence of a (non transferrable) user account?

    Because that is exactly what World of Warcraft (and all MMO's, for that matter) does.

    Autodesk would then give the software away for free, but sell the user accounts for whatever they want.

    1. Re:Workaround by thtrgremlin · · Score: 5, Interesting

      I really hate companies that operate on the basis of "we will stomp the rights of every customer that doesn't sue us" policy. Lots of places seem to be like this. Some often just break the law till you point it out to them, then they change it... for you, and will keep screwing the person right next to you. I actually got into an argument with a McDonald's manager that refused to give a 6 year old kid a free cup of water (he bought a lot of food for himself and his friends at the same time). The manager said that the only water they had was the bottled water, and it was $1.50. I informed the manager that I knew they were lying and knew the law, and I would be more than happy to call the Health Department if they didn't get the kid his cup of water... in so many words. In California, at least, restaurant, for a variety of reasons, must provide water with no charges or restrictions, other than there is no regulation on cup size, customer or not. Kid got his water, and he thanked me.

      Shame on them picking on a little kid for not knowing his rights. Now I think they just try to convince adults that anything but bottled water is poisoned or that only poor people drink water.
      Idiots!

      --
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  2. Product Activation? by nonsensical · · Score: 5, Interesting

    It's about the courts re clarified this for software. When you buy a physical product, you should have the right to sell it.

    What happens now with all the authentication and tying copies of software to the hardware it's first installed on such as Windows XP/Vista?

    You have a right to sell your copy, but effectively you can't because it's been tied to your hardware.

    1. Re:Product Activation? by Chris+Burke · · Score: 5, Interesting

      You have a right to sell your copy, but effectively you can't because it's been tied to your hardware.

      It seems to me that the courts have not typically ruled against "effective" rights violations*. There's no law that says Microsoft can't require your PC to phone home to verify it's using the same hardware as before. So while this decision could be repeated if Microsoft tried to stop you from reselling Vista and you went to court over it, it would probably not have any effect on that sold copy of Vista being useless because Microsoft wouldn't activate it.

      * See Eldridge v Ashcroft, "retroactive finite copyright extensions, repeated infinitely" doesn't violate principle of copyrights being finite.

      --

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  3. Open packet to read agreement. by Hankapobe · · Score: 4, Interesting
    FTFA: There is a piece of paper tucked inside that says it is a licensing agreement with the statement "by opening the sealed software packet(s), you agree to be bound by the terms and conditions of this license agreement."

    How many of you have found the actual license agreement is on the media stored in the packet? So in order to read the agreement, you have to open the packet.

  4. Nontransferable Licenses in question by icebike · · Score: 5, Interesting

    The ruling is important because it calls into question the whole concept of a Non Transferable license. The court found that âoefirst saleâ doctrine of copyright law did apply. http://en.wikipedia.org/wiki/First-sale_doctrine

    If this hold, it will largely eliminate the non-transferable license in software.

    And why shouldn't it? As long as the original owner retains no copy, selling an unused license simply keeps that copy under maintenance (maintenance charges frequently exceed sales revenue) and keeps the money flowing to the authors.

    Nontransferable licenses are usually attempted by companies that have some sort of a near monopoly lock, so that not only do they gain from a new sale, they also gain from maintenance charges. If there are multiple vendors of equivalent software you really can't get away with nontransferable clauses.

    As a software author, I'd gladly accept continued maintenance fees instead of new sales revenue. If my customers know that unused licenses have residual value when their projects are completed its good for me, and good for them. They buy extra licenses to handle the surge effort of development, and retain a few licenses for maintenance.

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  5. No lawyer by lantastik · · Score: 5, Interesting

    Wow, that guy has some rocks. In the second link, you find out he sues them without a lawyer. That's not an easy thing to do in a US District Court.

  6. Re:First-Sale cuts both ways by Naughty+Bob · · Score: 4, Interesting

    I created a 4 hour video on building boats. I sell probably 30 a year. An online video rental site bought a legal copy and now rents my video out at $15 per week.

    So why should people buy my video at $80 if they can get it for next to nothing on the web and most likely just burn their own copy? That's First-Sale Doctrine and it can also suck for the little guy. Contact the video rental site. Send them an 'updated', Hi-Def version of your tutorial. Include on this a number of unobtrusive ads for your product, and maybe throw in a few free support calls (then start charging...).

    (I know nothing about boat building, but...) If building boats takes more than 5 weeks, or is slightly difficult, you'll have successfully adapted your business model to (cue scary-deep voice over) 'A Business Model For The Digital Age'.

    Kerching!
    --
    "Be light, stinging, insolent and melancholy"
  7. Re:Not really adding anything important but... by mikael · · Score: 5, Interesting

    You give the software away for free, but you charge a free for a license key (eg. Microsoft) that unlocks various features of the software. For potential customers, you provide edit and load functionality. For students, you allow all the edit, load and save features, but any printed files have a watermark copyright. For professional users, you provide all features.

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  8. Re:First-Sale cuts both ways by shawn(at)fsu · · Score: 4, Interesting

    I think they do. My sister used to work at a video rental store and I saw the catalog they used to order VHS tapes from. They were easily 4 to 5 times as expencive as buying it from walmart or what have you. This also led to fun times when someone would leave a video in their hot car in Florida and were shocked when told how much it was to replace the tape.

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  9. Re:Not really adding anything important but... by drinkypoo · · Score: 4, Interesting

    drinkypoo the human dictionary says: the word for features-limited-until-paid shareware is crippleware. It's not very P.C., but it is very descriptive. Fight crippleware: use Free Software! (I understand some of you out there make a living on Shareware. Good for you! I hope when you abandon the software you'll Open the Source.)

    --
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  10. Re:First-Sale cuts both ways by JonWan · · Score: 4, Interesting

    The first video store I ever visited did this. You purchased the Tape for the retail price (about$80) and returned it for a refund. They deducted $5 for each day you had the tape. If you needed a VCR they would rent one to you for $10 per day plus a $300 deposit.