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Court Says First Sale Doctrine Doesn't Apply To Licensed Software
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. "
This is going to mean bad things for all the rest of us.
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
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)
This was a decision by the 9th Circuit Court of Appeal, specifically. With any luck whatsoever, this unacceptable ruling will be overturned by the Supreme Court. The 9th Circuit is apparently the most overturned court in the country, so hopefully this won't stand for long.
That Anonymous Coward guy is pretty annoying. Can we have the government censor him or something?
Whatever happened to copyright as it was originally made that copyright was a compromise between consumers and producers.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.
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.
It would be good once and for all to find out whether or not EULAs (especially ones that do not appear until after the software is open) are enforceable. I would prefer all contracts require written signatures, as well as modifications of such, so that companies can not arbitrarily change clauses willy-nilly even if the contract has wording to allow such. (Think cell phone contracts, I never signed anything). First sale should be first sale, period. On the other hand, I am afraid as to what the Supreme Court would rule in such a decision.
Rhymes that keep their secrets will unfold behind the clouds.There upon the rainbow is the answer to a neverending story
It will be interesting to see how this plays out. If this ruling holds, the used video game market is on its last legs.
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.
Starting tomorrow, every movie release will come with an EULA.
> What to learn from this? Don't agree to this sort of licence.
In the case of consumer software, people often don't have much choice. The EULA is presented to them after the purchase and after they've already opened the package to install the software. Naturally, vendors and resellers won't accept opened software packages or refund them, so that customer can either accept the EULA or be the proud owner of a new shiny frisbee.
That Anonymous Coward guy is pretty annoying. Can we have the government censor him or something?
If we are just a licensee, then that means they can't sue for intelectual property theft. It went from 'breaking and entering' charges to 'trespassing'.
Unless you like living as a Serf of the Corporations who aren't even MENTIONED in the US Constitution, it's time to consider revolution.
-- Tigger warning: This post may contain tiggers! --
That really, truly, SUCKS!!
No sigs in BETA. Beta SUCKS.
But it fucks up the entire point of copyright. The entire point of copyright is that it is a compromise that is the only way it works as intended. There are 3 main rights consumers have under copyright, one is limited copyright which has been eliminated, the other is fair use which is being challenged and the last one is first sale doctrine. Those 3 rights should never be able to be changed in any license. If I say my copyright is good for 10,000 years, that isn't enforceable right now because copyright doesn't extend that long (yet) so that point is null. A contract isn't legally binding when it contains illegal material, if a license breaks any of these 3 rights, consumers shouldn't have to follow those just like I don't have to follow a contract that says to steal $50,000 from a bank.
Taxation is legalized theft, no more, no less.
What if you bought the software, and since you weren't presented with the license before sale, try to sell it after not agreeing to the license and not installing it on your computers?
"There is a way that seems right to a man, but its end is the way of death." Proverbs 16:25 (NKJV)
This sort of licence will start to fade as more and more Open Source projects attain "enterprise quality".
Good luck with that. Everything from Starcraft 2 to your small business accounting software has a click through EULA. FOSS is great, but its not going to fill every niche ever. Its progress in accounting is glacial. And while there are FOSS games, the bulk of major development is and will remain proprietary for the foreseeable future. That is just 2 examples.
For another example -- while FOSS forms the guts of most Virtualization schemes, the proprietary software you need to pile on to really work with them in a serious way is not at all threatened by FOSS alternatives.
Tell these software houses that still use this sort of licence to hit the road.
If you can afford to stop using proprietary software great. Most of us don't really have that option.
If a copyright holder can retroactively take back some of the rights they sold you by springing a one-sided un-agreed-to contract on you after the fact, what's to stop music, video, or book vendors from putting a EULA in their own works? Ironically, that's exactly what Bobbs-Merrill did in the original "first-sale doctrine" court case, and that was actually less unethical since at their books didn't hide the unilateral rules under a layer of shrinkwrap. Too bad for them that judges were smarter back then...
Name any other contract that one party can't even look at before money changes hands. Obligatory Car Analogy: You hop into your new SUX-2000, turn the key, and are notified that before the engine will start you have to agree to to have your car serviced exclusively by SUX dealerships. And they never mentioned this during the purchase process. How could that possibly be legally binding?
Never let a lack of data get in the way of a good rant.
... Short of signing over constitutionally protected rights, anything goes ...
Not quite. Judges often consider reasonableness, public interest and the relative sophistication of both parties. When one party is a company with a legal team and the other party is Joe Consumer judges often lean towards protecting the little guy when the deal is an un-negotiated take-it-or-leave it one.
The issue here is whether licensing software is reasonable or not. Software is kind of service-like, free patches and updates are often offered. You don't get patches/updates for paper books or audio CDs. I don't think this topic is a clear as many people claim.
... be willing to offer a complete refund on any opened software if a person doesn't agree to the license?
File under 'M' for 'Manic ranting'
In Canada software has always been viewed as a license. So are movies and music.
The law does not allow companies to place restriction on the lending, or selling of a license. Please note I said companies, governments for obvious reasons do not allow this for things such as driver's licenses.
This law is the basis for why downloading a file from a P2P network, or other source is not illegal. The license is for using the material, so you have not committed a crime until you use the material without a license.
For example, if I have All My Loving on a Beatles record and I download the MP3 and listen to it, that is perfectly legal. If I downloaded and listened to Poker Face which I don't have a license to, that would be illegal.
Microsoft, Apple, Google, Amazon what's the difference? All steal money from devs and control with walled gardens.
If they are going to disallow sale of licensed software, then unlicensed software (read: pirated) can easily have more value to a user than the licensed work.
I'm not saying that the increase piracy is justified, but it's an inevitable result.
File under 'M' for 'Manic ranting'
Okay, I hesitate to weigh in here, because this isn't going to be a popular question, but did anyone read the opinion? This is, factually, a rotten case for first sale. CTA bought the software and agreed to the EULA which specifically required that they destroy Release 14 in order to get upgrade pricing on Release 15. They paid $495 per license for R 15 instead of the normal $3,750 they would have paid specifically BECAUSE they were required to destroy R 14. Instead they decided to say screw it and they sold their old R 14 copies on the secondary market with the activation codes handwritten on the package. Vernor bought the copies, knowing about the EULA, and then resold them and claimed protection from the first sale doctrine.
Now I'm as gung ho as the next guy about appropriate limitations on copyright (maybe not the next guy here on /., but the average next guy); and in particular I think first sale, like fair use, is an incredibly important protection that's been getting the shaft in the courts lately. But in this particular context -- the upgrade context where the company that poured its dollars into writing better and stronger code is trying to cut its customers a break -- it's going to be a pretty hard sell. Vernor screwed himself here, and unfortunately I suspect he took a lot of other people with him.
"The true administration of justice is the firmest pillar of good government." - George Washington
I like how the tag says Obama, when Obama hasn't appointed one justice to this court. W. put 7 of them on there... He's nominated a few, but the Republicans won't put them up for that "up or down vote" they were so worried about during W.'s term.
the fashion industry is not bigger then software.
Even if it was, and that is somehow an actually relevant argument instead of a logical fallacy, The pharmaceutical industry makes far more, and they have Patents, copyrights, and trademarks.
most profitable companies:
http://money.cnn.com/magazines/fortune/fortune500/performers/companies/profits/index.html
I don't see any fashion companies.
And here are industries:
http://money.cnn.com/magazines/fortune/fortune500/performers/industries/return_on_revenues/index.html
hmm. not there either.
Interesting.
The Kruger Dunning explains most post on
CONTRACTS DO NOT WORK THAT WAY!
Contracts aren't something you can trick someone in to, they aren't something you can say "By nodding your head in that way you agree to all this stuff." In general, a contract must have few things that an EULA fails at:
1) A contract must be an exchange. Contracts can't be one sided, they have to be an exchange. That's why if you do something like a quit claim deed (meaning you helped someone buy property and are now letting them have it) it'll say something like "For the sum of ten dollars and other valuable consideration I quit all claim," and so on. Even when the intent is to give something over, there MUST be an exchange for it to be a contract. An EULA just acts to tell you what you can't do.
2) A contract has to be prior to the exchange or sale. This is why you sign all the paperwork related to a home purchase before it is yours. That contract is only binding if you sign it before things happen. They can't sell you something and then say "Oh by the way, here's the contract." Sorry, too late. Same deal with prenuptial agreements. They are "pre" the nuptial for that exact reason. You can't tack on terms after something is done, has to happen before hand.
3) A contract must be open to negotiation. You don't have to accept what the other side proposes, of course, but you have to be open and available for it. You can't hand over a contract and then vanish. When my university signs a contract with MS or someone for a Software Assurance pack, there is negotiation. They send us the contract, our lawyers change it and send it back, they change it and send it back and so on. That has to be there, that opportunity. A contract cannot be a one sided demand, both sides have to discuss and mutually agree.
None of this is new or special, this is how contracts work, this is why things are done as they are. For some reason though some people, including the 9th circuit, seem to be ignoring that for software and saying "Sure it is perfectly ok to put a bunch of requirements on shit ex post facto, never mind that we'd never allow that for other situations."
I do not get this logic (or rather lack of logic).
Suppose you buy an expensive piece of industrial equipment. Once you get it home, you open the box and an EULA falls out. It says you didn't buy the device, you licensed the ability to use it. It says you may not sell the device, or return it for a refund, it is yours now once and for all time. Further, you agree that you can't sue for any injury that happens, even if such an injury is a result of a defect in manufacturing.
How would that be any different? How would that be at all legal, based on existing contract law?
Libraries are now required to predict, in advance, which video games and other licensed media will be culturally significant in the future.
If they fail to buy a copy of a product while it is on store shelves, there is now no legal way for them to preserve it for posterity, since the people who did buy it are not allowed to transfer ownership.
Ah well, back to reading the works of authors like Shakespeare who were somehow inspired to expend massive effort on creating amazing intellectual works despite the lack of any effective copyright protection whatsoever. (Still waiting for you to explain that, copyright lobby ...)
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.
No wonder. No other court is filled with more ignorant and corrupt judges.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
I think they can hit you with illegal "sublicensing", licenses as such are not products.
What they really are trying to dodge is copyright law itself. AIUI, copyright is very clear that if you buy a copy of a copyrighted work you OWN that copy, and can do (nearly) whatever you want with it, including reselling it. You are not making more copies so you are not in violation of copyright. By claiming that the physical media is inconsequential to what you actually paid money for, they are trying to prevent you from exercising rights you would have under copyright law.
In summary: Someone should smack their heads around until they stop being jerks to their customers.
Refund from who? Retailers will tell you they have posted signs everywhere they don't refund open box CDs/DVDs/software. Some even make you sign that statement when you make a purchase. Manufacturer (software author) will tell you they didn't perform any business transaction with you and don't owe you anything. If the post-sale single-sided "we'll take your firstborn son" click-through EULAs are legally binding contracts, you - the consumer - don't have many options besides not buying software (or any products containing software) which is known to have an EULA.
Moreover, after this ruling, if you buy such software, agree to the EULA (because otherwise it's a shiny coaster), and you find the product doesn't meet your needs or expectations, you can't even delete it from your device and give/sell it to your friend or neighbor because the court says the EULA has turned you into a "licensee," and the transaction formerly known as "sale" has been negated and overridden by such EULA.
In fact, let's go one step further - I'd like to see these types of licenses on books, periodicals, DVDs, etc. where you agree to the EULA when you tear it open; and as soon as you do that the first sale doctrine goes out the window. I'd also like to see how libraries will be "licensed" books at a different rate than the retail price because the library license would allow multiple viewings. In fact, you could even charge a nominal monthly licensing fee to the libraries.
If you go even one step further, you could sell cars with software EULAs; so that you can't sell your car because your car contains critical software to which you are just a "licensee" and since you can't transfer the car ownership without transferring the software you can't do it at all - or we'll take the standard 30% cut on approved sales, thank you! Come to think of it, most electronic products have some sort of software in them (TVs, DVD/Bluray players, microwave ovens, telephones, alarm clocks, air conditioners, etc., etc.). Wouldn't all manufacturers like to have a choke hold on second hand sales? Sure, just claim it in your software license!
>> Except in this case. This ruling by judges is in direct opposition to protecting the little guy. They have ruled that an EULA is enforceable on someone that never even agreed to the EULA.
>
> That's an opinion not a fact.
Bullshit.
The person being "punished" here is a 3rd party reseller. He has never consented to be subject to any EULA from Autodesk.
THAT is a FACT.
A EULA is being enforced on someone that never even so much as opened the box in question.
This just highlights the absurdity of this EULA nonsense. People that have never done anything to be a party to these "contracts" are being bound by them.
A Pirate and a Puritan look the same on a balance sheet.
If software publishers are going to demand abhorrent use terms, then shouldn't their terms be on the outside of the package so that the buyer has the ability to make an informed purchasing decision?
Orwell: "In a Time of Universal Deceit, telling the Truth is a Revolutionary Act"
Politicians can be bought for a few thousand. They are REALLY cheap. Tens of millions would buy you congress. Just check how much a politician does for a donation of 10 grand.
That is the difference between moral vacuum and honest crooks. Crooks do it for big bugs only. A mafia hitman will charge a lot of money because to the mafia a life has value. A random lunatic with zero morals will do it for a tenner, because life has no value.
The days of honest crooks wanting big bucks is gone. Now they just want enough to help fund their election campaign because they know that it is the easiest way. And they tell themselves they are not corrupt, because it doesn't go directly into their pocket. Just that the paid for election campaign gets them elected and all the salaries and compensations and later commission's that come with the job.
The decay of democracy doesn't make for an intresting movie. It is not the evil of the black, but of the gray.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
In the case of consumer software, people often don't have much choice. The EULA is presented to them after the purchase and after they've already opened the package to install the software. Naturally, vendors and resellers won't accept opened software packages or refund them, so that customer can either accept the EULA or be the proud owner of a new shiny frisbee.
Please look at this more carefully. So you handed over money for a box with a DVD, you stick the DVD into your computer to install the software, and the EULA shows. Here are your choices:
1. Agree to the EULA, install and use the software. You have no first sale right anymore if the EULA says so.
2. Don't agree to the EULA, install and use the software. You had no right to install the software and therefore committed copyright infringement.
3. Don't agree to the EULA, return the software to the store. They won't like it at all, but they have to return your money.
4. Don't agree to the EULA, don't install it, sell it to someone else. Perfectly legal.
Note that in the case discussed the software was installed, sold to Vernor quite clearly in breach of the license, and the question was whether Autodesk could stop Vernor, or if they could only successfully sue the party who sold the software to Vernor. It was always quite clear that Autodesk could sue _someone_ successfully.