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Court Says First Sale Doctrine Doesn't Apply To Licensed Software

Posted by Soulskill on from the make-up-your-mind dept.

An anonymous reader wrote to tell us a federal appeals court ruled today that the first sale doctrine is "unavailable to those who are only licensed to use their copies of copyrighted works." This reverses a 2008 decision from the Autodesk case, in which a man was selling used copies of AutoCAD that were not currently installed on any computers. Autodesk objected to the sales because their license agreement did not permit the transfer of ownership. Today's ruling (PDF) upholds Autodesk's claims: "We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions. Applying our holding to Autodesk’s [software license agreement], we conclude that CTA was a licensee rather than an owner of copies of Release 14 and thus was not entitled to invoke the first sale doctrine or the essential step defense. "

27 of 758 comments (clear)

  1. Bad consequences by Anonymous Coward · · Score: 5, Insightful

    This is going to mean bad things for all the rest of us.

    1. Re:Bad consequences by ChrisKnight · · Score: 5, Insightful

      Just wait until publishers of physical books and magazines add a 'license agreement' to the first page.

      This ruling has the potential to strip the right of first sale from all future books, magazines, CDs, DVDs, etc.

      --
      -- This sig is only a test. If this were a real sig it would say something witty. --
    2. Re:Bad consequences by Zencyde · · Score: 5, Insightful

      While I do hate this strategy, showing the obvious fallacies of a system by pushing it to its limits is one of the more effective ways. Reductum ad absurdum is not simply a logical argument but an overall strategy that can be applied to demonstrate scalable effectiveness of a system. I know we shouldn't expect a system to scale perfect but in this case the system seems to not scale very well at all.

      Also, I'd like for it to now be legally disallowed to use the term "buy software" in a commercial context as it no longer applies and would falsely advertise what it is that we "purchase".

      --
      What day is it? Could you please tell me?
    3. Re:Bad consequences by syousef · · Score: 4, Insightful

      Reductum ad absurdum is not simply a logical argument but an overall strategy

      It's hard to reduce to absurdity that which is already absurd. Copyright and patent law has been absurd for decades.

      --
      These posts express my own personal views, not those of my employer
    4. Re:Bad consequences by Maxo-Texas · · Score: 4, Insightful

      Not unless the license allows you to install it on multiple devices. Typically they do not or only allow a limited number of copies.
      If you lose your licensed copy- instead of replacing it, you are usually screwed.

      This could be a value add for the companies but instead they use it as a hammer. It could be, "once you license this song, you can download it to any new computers or other devices for life. And the storage fee will only run you $20 a month for an unlimited number of movies and songs." Put a reasonable download limit of once per quarter on it to avoid obvious abuse.

      But what they really want is to RENT it to you. You pay for the content every time you use it/play it. Microsoft has said openly they want you to "subscribe" to office.

      --
      She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
    5. Re:Bad consequences by GameMaster · · Score: 4, Insightful

      The problem is that once you have it applying to things like books, it will be much easier for the software/music lobbyists to pitch a bill that limits the practice to just digital stuff as a "compromise". We call it politics for a reason. Rarely does any one party in a contentious issue get everything they want from new legislation and the only way for the whole system to work is for the people writing and voting on the bills to agree to concessions. The further you let them push it before clamping down in it, the further in their favor the final law is likely to be.

      --

      Rules of Conduct:
      #1 - The DM is always right.
      #2 - If the DM is wrong, see rule #1
    6. Re:Bad consequences by HungryHobo · · Score: 4, Insightful

      I'll miss libraries when they're gone. :(

      Publishers are gradually changing to e-books anyway and they've never liked libraries, now they just have to make one of the terms of the license that you can't loan books.

    7. Re:Bad consequences by Wordplay · · Score: 4, Insightful

      It surely is relevant to the issue of shrinkwrap licensing. In the absence of a valid EULA to strip license, Vernor bought a non-infringing copy. I think it's plain software sold from publisher to end-user with no valid extra contract provisions attached is both implicitly licensed (warranty of merchantability, if nothing else) and that the media is resellable (first sale). ]

      For this judgment to be valid, the EULA has to be upheld. AFAIK, that's a new horizon for the 9th District.

    8. Re:Bad consequences by c · · Score: 4, Insightful

      > Had the wholesalers violated the license, any copies sold to
      > the defendants subsequent to the violation would have been infringing,
      > and the first-sale doctrine would not have applied.

      I have a bit of trouble with this one... You're talking about copies being sold when, in fact, neither the wholesalers nor the retailers were selling anything other than the physical things delivered unaltered by the publisher (who, for sake of argument, we'll assume was providing authorized copies). I fail to see where copyright could have been infringed. If you s/wholesalers/printers/, sure, I'd buy the argument, since the printer would be the ones making copies under license, but it's a completely different scenario when you talk about those who just act as conduits for physical goods.

      --
      Log in or piss off.
    9. Re:Bad consequences by hairyfeet · · Score: 4, Insightful

      You know, as much as I hate to agree with FLOSSies on...well pretty much anything, I have to say RMS is looking spot on with his right to read story. The most basic fundamental rights we have enjoyed for centuries are being taken away by a bunch of weasel lawyers and corrupt officials. Sadly there ain't a damned thing we can do about it either, unless someone here has a couple of billion lying around to buy some politicians with?

      --
      ACs don't waste your time replying, your posts are never seen by me.
    10. Re:Bad consequences by Runaway1956 · · Score: 5, Insightful

      The problem is - what was truly absurd 50 years ago was made legal 40 years ago - and what was absurd 40 years ago was made legal 30 years ago. They keep pushing the envelope, and the kids coming up are brainwashed into accepting the newest absurdity. The "rights holders" outlive the voters and the customers, so today's customers have little idea where things started out, and little idea of what is absurd!

      --
      "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
    11. Re:Bad consequences by Belial6 · · Score: 5, Insightful

      Also, I'd like for it to now be legally disallowed to use the term "buy software" in a commercial context as it no longer applies and would falsely advertise what it is that we "purchase".

      Seriously. If a person watches a commercial that says a product is for "sale". They go into the store and see a "sale" sign for the product. They then take the product to the cash register and offer to "buy" the product. The cashier runs the transaction, takes their money, and hands them a "sales receipt". How is this not a SALE of the product?

    12. Re:Bad consequences by Migraineman · · Score: 4, Insightful

      Don't worry, they can't apply restrictions retroactively.

      So, uh, the retroactive copyright extensions didn't happen?

    13. Re:Bad consequences by Myopic · · Score: 4, Insightful

      You know, as much as I hate to agree with FLOSSies on...well pretty much anything, I have to say RMS is looking spot on with his right to read story. The most basic fundamental rights we have enjoyed for centuries are being taken away by a bunch of weasel lawyers and corrupt officials. Sadly there ain't a damned thing we can do about it either, unless someone here has a couple of billion lying around to buy some politicians with?

      Really? Doing marches, protesting and that stuff won't work?

      You do realize the one thing the government is afraid of is it's people taking to the streets to voice their unapproval?

      It's true: governments will respond to gigantic throngs of penniless people angrily protesting nearby. But to recognize that is not to deny the even more abundant truth that governments will respond to miniscule numbers of rich assholes quietly greasing palms. The ratio of rich fucks versus poor saps that it takes to move government is, what, something like 1-to-100,000-. I absolutely believe that 3,000 of the richest and best connected people in the USA could outweigh every single last one of the rest of us on a policy issue such as copyright reform. So, what I'm saying is, good luck getting your protest participation to the 99.999% level, and if you can't, then I'd rely on big money to get the way you want.

    14. Re:Bad consequences by hairyfeet · · Score: 4, Insightful

      Won't work, and here is why: I believe your right to privacy will soon be gone. You watch and see my words come true, the next thing you'll be seeing is Nancy Grace talking about how TrueCrypt is protecting "dirty child pornographers!" and they will equate encryption with CP. Then they don't have to outlaw it, they know simply having it in your possession will have any court convict you.The only "encryption" that will be allowed will be corporate approved, like SSL and the built in MSFT encryption which can be bypassed by law enforcement.

      Add to that the most likely utter failure of getting any real net neutrality passed, along with any bills that DO pass having a nasty "illegal traffic" clause that will let them crush any P2P or similar "non approved" application of the bandwidth YOU pay for, and slowly but surely the once free Internet will end up just another cable shopping channel.

      Never forget to know your enemy. Your enemy is a multinational cartel, which means they have NO alliance to this or any other country or their beliefs, would have NO problem perverting laws and removing rights in trade for higher profits, and finally has billions of dollars to use against you with everything from SLAPP style lawsuits to outright bribery of elected officials. Sadly like DVD ripping software anything that dares to allow anyone even the POSSIBILITY of costing corporate profits will end up under a DMCA style ban, if not actually made a criminal offense.

      --
      ACs don't waste your time replying, your posts are never seen by me.
  2. Yay! by Pojut · · Score: 5, Insightful

    Wait...what? Seriously?

    Many industries have been trying for literally decades to prevent used or second-hand sales...but parts of the software industry are the ones to actually do it? Huzzah. That's so awesome. Thanks for fucking us over once again. Guess what people will do when they can't buy a used copy and don't have money for a new copy?

    Yaargh.

    --
    Living With a Nerd
    1. Re:Yay! by Culture20 · · Score: 5, Insightful

      Many industries have been trying for literally decades to prevent used or second-hand sales..

      Expect an End User License Agreement with your next car or house. Car manufacturers and home builders would love that.

    2. Re:Yay! by russotto · · Score: 5, Insightful

      What you buy is a license, and the contract you sign is the EULA you click through when you install the software.

      Piss on that, and piss on the Ninth Circuit (in whose jurisdiction I do not reside). What I buy is a copy of a piece of software. The thing in the box is merely an impermissible attempt to restrict my rights post sale.

      And the First Sale Doctrine is just that, a doctrine - not a federally protected right.

      It's in the copyright code, 17 USC 109.

  3. Oh, crap by ak_hepcat · · Score: 5, Insightful

    This is a ruling that is going to spur a lot of changes to software vendors.

    *everybody* will end up being "a licensee" of the software, and you will no longer own anything.

    And yes, this will extend to FOSS as well... licensing through copyright is still licensing....

    Do these judges even understand the enormity of their decisions?

    --
    Support FSF: Stop thinking with your wallet, and think with your imagination. (cc/non-commercial)
    1. Re:Oh, crap by Dyinobal · · Score: 4, Insightful

      No they don't or they do and are getting paid nicely for it. Either way we are boned.

  4. Whatever happened to copyright? by Darkness404 · · Score: 4, Insightful

    Whatever happened to copyright as it was originally made that copyright was a compromise between consumers and producers. In exchange for giving up the right to use materials how we wished we gained a few key rights among them were limited copyrights, fair use and the first sale doctrine.

    Now, while producers now have more power, consumers have less. We no longer have limited copyright, fair use is being systematically eliminated and now the first sale doctrine is being challenged.

    A free market works on balance on both sides of the scale, producers and consumers both have rights. A producer has some rights to screw customers but customers have rights to balance that out by being able to screw producers in numerous ways. But that balance is being broken with copyright.

    --
    Taxation is legalized theft, no more, no less.
  5. So let me get this straight... by Anonymous Coward · · Score: 5, Insightful

    You buy something (and you *are* buying it, because the "agreement" isn't presented before the sale.)

    You try to install it, and disagree with the EULA, so press "I disagree", and the software doesn't get installed.

    You then sell it to try to recoup some of your lost money.

    But you can't, because the *agreement*, which you did not agree to says you can't.

    The USA is officially the most fucked country on earth.

    1. Re:So let me get this straight... by NeutronCowboy · · Score: 4, Insightful

      Not quite. Essentially, when you handed over the money, the transaction wasn't complete, because you didn't accept the contract yet. Without that, whatever you paid for is still not yours.

      The joy of contract law.

      --
      Those who can, do. Those who can't, sue.
  6. I will enjoy watching piracy numbers escalate. by Spazntwich · · Score: 4, Insightful

    Makes you wonder if the software vendors have any grasp on the idea that the license having some value as a second-hand sale item is what allows them to charge such exorbitant rates in the first place.

  7. Re:EULA-mania by AnonymousClown · · Score: 5, Insightful
    On eBay tomorrow you will find:

    Used "Iron Man" DVD case for sale: $6.00 - DVD thrown in for free!

    --
    RIP America

    July 4, 1776 - September 11, 2001

  8. But you can't get a refund by Sycraft-fu · · Score: 5, Insightful

    Try taking software back to a store. Say you didn't like the license and want a refund. They'll tell you "No refunds on opened software, exchanges only." Of course you can fight that but it takes time and money.

  9. Re:Anyone Read It? by Moof123 · · Score: 4, Insightful

    I guess in my opinion CTA is the one in the wrong. CTA broke a contract, not Vernor. I could agree with CTA getting sued for the ~3k/seat for their ill gotten copies (plus punitive, etc). As I see it, the sold software was not illegal for Vernor to buy and resell, but was illegal for CTA to sell.

    I'm curious to know if the same rules should apply as to passing on endorsed checks as software, where no matter the interim steps a legally signed check is still valid by whoever cashes it in (i.e. interim illegal activities don't make the check null and void).

    Clearly I am not a lawyer...