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Federal Court Says First-Sale Doctrine Covers Software, Too

timothy posted more than 6 years ago | from the it-better dept.

The Courts 509

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.

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Not really adding anything important but... (5, Insightful)

Uncle Focker (1277658) | more than 6 years ago | (#23509754)

Score one for the little guy!

Re:Not really adding anything important but... (0, Insightful)

Anonymous Coward | more than 6 years ago | (#23509778)

how about if the little guy writes software, and everyone who buys it goes straight to ebay and resells it, without uninstalling...

then the little guy is out of business...

Re:Not really adding anything important but... (3, Insightful)

Izabael_DaJinn (1231856) | more than 6 years ago | (#23509806)

It's not like keeping people from reselling things on ebay will stop piracy....

Re:Not really adding anything important but... (5, Insightful)

TheRealMindChild (743925) | more than 6 years ago | (#23510104)

Their concern isn't actually piracy in this regard. They don't want some CAD operator to sell a two-version-old-Autocad for $5 to someone who needs a CAD package. Instead they want that person who needs it to spend multitudes of money on a brand-spanking-new copy.

Re:Not really adding anything important but... (5, Insightful)

Anonymous Coward | more than 6 years ago | (#23509814)

without uninstalling...

So, did Vernor? Or are you just throwing some bullshit out there like "We should just kill everyone because they might commit a crime"?

Re:Not really adding anything important but... (4, Insightful)

Uncle Focker (1277658) | more than 6 years ago | (#23509924)

And the same could be said when reselling books, movies, cds, etc. But it's been ruled we have a right to resell such things and it's about time the same thing was clarified for software. It's a shame if the company goes under, but they don't have a right to undermine the rights of the users.

So true (5, Insightful)

Weaselmancer (533834) | more than 6 years ago | (#23510056)

I mean, look at how libraries have put all those authors and publishers out of business.

You can get the books for free there! It totally destroyed the book selling market.

Re:So true (4, Insightful)

Uncle Focker (1277658) | more than 6 years ago | (#23510094)

And clearly Netflix, Blockbuster and Hollywood Video, etc have ravaged DVD sales!

Re:Not really adding anything important but... (2, Insightful)

ak3ldama (554026) | more than 6 years ago | (#23510014)

how about if the little guy writes software, and everyone who buys it goes straight to ebay and resells it, without uninstalling...

then the little guy is out of business...

No, then maybe the little guy needs to reevaluate the price of his product (or levels and quality of support) since people are willing to spend considerably less to buy an unsupported version of the product from ebay. If people don't need or want support then he could look at selling his product for substantially less then he currently believes it to be worth.

Re:Not really adding anything important but... (5, Interesting)

mikael (484) | more than 6 years ago | (#23510364)

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.

Re:Not really adding anything important but... (5, Insightful)

thtrgremlin (1158085) | more than 6 years ago | (#23510492)

Isn't that the same (fallacious) argument for gun control where they justify taking guns away from law abiding citizens because criminals use guns too? Or blocking all p2p traffic because sometimes people use p2p to transmit copyrighted material outside the copyright holders intended desires?

And people actually make fun of Singapore for their anti-gun laws?

Companies and consumers are going to find ways to break the law, that doesn't mean their rights to do legal business should be changed in unnecessary ways. How do you justify that?

Workaround (5, Interesting)

Anonymous Coward | more than 6 years ago | (#23509786)

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.

Re:Workaround (4, Insightful)

FooAtWFU (699187) | more than 6 years ago | (#23509856)

The difference is that World of Warcraft has something interesting on its servers. With Autodesk, all the really interesting stuff is on the desktop. As such, it's much less trouble to hack Autodesk to play for free than to hack MMORPGs (not that this has stopped a few random free "shards" showing up in various spots from time to time, game to game).

Re:Workaround (2, Informative)

Gat0r30y (957941) | more than 6 years ago | (#23509944)

I suppose they could, but many folks are going to want to work in AutoCad without an internet connection. It would make a little more sense to stick a license on every box of software - and on install associate it with a user account. Even that though probably isn't optimal - considering many companies just have a license server for such programs.

Re:Workaround (5, Informative)

egburr (141740) | more than 6 years ago | (#23510140)

I would hope it is the other way around, that companies (such as Blizzard for WoW) would no longer be allowed to prohibit the re-use of the keys that come with the software. Since the key is what allows the software to be used, the software is useless without the key. Since the key is part of the software package, it should be usable by the rightful owner, whether that is the original owner or the second owner or the third owner, and so on.

Skirting this by saying the key allows you to create an account and that the account is non-transferable is bogus as long as the key can only be used to create only one account.

I did buy a "like new" copy of WoW on ebay a couple years ago. I was a bit put out when the key was rejected due to having already been used. After reading the EULA thoroughly (not that I agree to a unilateral after-purchase change of conditions), I argued with Blizzard about my non-working key. After talking with a lawyer friend, and him sending them a letter, they sent me a new key.

One of they key points in their EULA was the paragraph:
You may permanently transfer all of your rights and obligations under the License Agreement to another by physically transferring the original media (e.g., the CD-ROM or DVD you purchased), all original packaging, and all Manuals or other documentation distributed with the Game; provided, however, that you permanently delete all copies and installations of the Game in your possession or control

The key is part of the "other documentation" and must be transferred to the new owner. Preventing someone from using it just because they are not the original owner of it is contrary to the first-sale doctrine.

Furthermore, there is nothing in the EULA indicating any possibility that the key cannot be used by its rightful owner. The only place that is mentioned is the Terms of Use which are displayed when you go to use the key. Prohibiting subsequent owners from using the key completely destroys the intended use of the software, so should not be allowed as long as first-sale doctrine principals apply.

Re:Workaround (3, Funny)

Dachannien (617929) | more than 6 years ago | (#23510320)

Reusing the key would require that the previous owner relinquish the key from their account. It's apparent that the previous user, um, neglected to do that before he sold you his copy of WoW on eBay.

On a side note, I have this bridge I'd like to sell on the cheap. Interested?

Re:Workaround (1, Informative)

Gewalt (1200451) | more than 6 years ago | (#23510224)

Wow software is free, and always has been. YES, you pay for the pretty book and the pretty package, but you can always just borrow your friends for the install instead. Where you pay is for the account on their servers. (oh, and in a totally shitty deal, you also had to pay to "activate" the expac features. that was fucked up and was one of the reasons I left wow)

Re:Not really adding anything important but... (2, Insightful)

phpmysqldev (1224624) | more than 6 years ago | (#23509842)

This is definitely a step in the right direction for EULA regarding software. So many companies today are using the DMCA in the wrong sense and this is hurting the intellectual property situation for everyone.

More details about how this all began can be found here [blog.com]

First-Sale cuts both ways (3, Interesting)

Anonymous Coward | more than 6 years ago | (#23509912)

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.

Re:First-Sale cuts both ways (5, Informative)

icebike (68054) | more than 6 years ago | (#23510078)

That act is specifically prohibited by the Copyright act. (At your discretion of course).

See http://en.wikipedia.org/wiki/First-sale_doctrine [wikipedia.org]

Re:First-Sale cuts both ways (1)

Mr2001 (90979) | more than 6 years ago | (#23510394)

Which part of that Wikipedia page says renting video tapes without permission is prohibited? I see this part:

The Record Rental Amendment of 1984 and the Computer Software Rental Amendments Act of 1990 both amended Section 109 to prevent all owners of software copies or phonorecords ... to dispose of said copies through the acts of rental, lease, or lending ... unless authorized by the owners of the copyright.
But that only applies to software and phonorecords (i.e. audio), not video.

Re:First-Sale cuts both ways (1, Funny)

ak3ldama (554026) | more than 6 years ago | (#23510082)

Mr. A.C. little guy, could we get a link to this online boat building video? Preferably the rental.

Re:First-Sale cuts both ways (3, Informative)

Uncle Focker (1277658) | more than 6 years ago | (#23510192)

That rental company has no right to do that under the First-sale doctrine. If they are truly doing so you need to take action to stop them. It's funny that you tried to argue against the First-sale doctrine protections by providing an example of something that isn't protected by said doctrine. A rental company must have a contract with the copyright owner in order to rent out their copyrighted works.

Re:First-Sale cuts both ways (1, Informative)

pegr (46683) | more than 6 years ago | (#23510386)

That rental company has no right to do that under the First-sale doctrine. If they are truly doing so you need to take action to stop them. It's funny that you tried to argue against the First-sale doctrine protections by providing an example of something that isn't protected by said doctrine. A rental company must have a contract with the copyright owner in order to rent out their copyrighted works
 
B*LLSH!T. There are exceptions for phono records and computer software, but otherwise, it is perfectly legal to rent copyrighted works. Do you think your local video store has a contract with all the movie studios?

It's funny that you have no clue what the heck you're talking about.

Re:First-Sale cuts both ways (4, Informative)

jcr (53032) | more than 6 years ago | (#23510480)

Do you think your local video store has a contract with all the movie studios?

Actually, they do. They buy their copies of the movies through a distributor who acts as the studios' agent.

-jcr

Re:First-Sale cuts both ways (2, Interesting)

Zanth_ (157695) | more than 6 years ago | (#23510218)

Despite that sucking for your wallet, I don't see why this is a bad thing. If you priced your video to match the $15 online price, you would likely sell quite a bit more. If you are selling the video on optical media then the cost is minimal for you. The main cost of course was in recording and editing your video. If you haven't made your money back selling at $80 you might want to consider lowering your price.

As for it cutting both ways, this is no different than an author of a text for a limited audience, say a quantum physics prof writing an academic text, or a post-doc releasing their thesis to the public. Chances are they won't sell many and the ones they do sell will mostly be picked up by university libraries. Guess what? A good amount of students will borrow the book for FREE!!! Yes that's right, despite the fact that the tome, written through blood sweat and tears, is available for a paltry sum of >$80, students and professors alike will more often opt to borrow it from their library rather than shell out for a copy.

They can even photocopy the book for a mere fraction of the cost!

Does this suck? For the author yes in a way, but there are a few ways to work around this:

1) having it in libraries and avaialable for free to faculty and students increases the number of people who will become familiar with the author's work. Likewise with you, having your video rented at $15 a pop is going to expose more people to your name and efforts than likely would have happened had you continued to sell 30/year. If you ever decide to write about building boats or doing a follow up vid or something different, you will be immediately more recognizable. If your work was good in the first place, you will have an immediately respectful fanbase who might be willing to buy those future works.

2)selling it cheaper. My thesis advisor's first book (a reworking of his thesis) sells for about $140. He's sold maybe 1100 in 15 years. It's not likely to sell many more as the relevance shifts in the field. He didn't control the price outright, the publisher pushed a high price on him. Had it sold for $30 instead, many more people would have bought it, he's been told by fellow academes. Of course at $140, they just borrowed it.

Sell your DVD directly for $15 and you compete with the video store. You offer folks a legal fully made up copy vs. their home ripped version.

If the video is a hot renter, your video will be a hotter seller.

Re:First-Sale cuts both ways (4, Informative)

Uncle Focker (1277658) | more than 6 years ago | (#23510306)

This post clearly shows that someone doesn't understand either the First-sale doctrine or the reason why libraries can lend out books and movies for free. I suggest no one listen to the nonsense he put out. The rental company has no right under the First-sale doctrine to rent the person's video if they had no permission to do so. Since this rental company is also clearly not a library they are not covered under the same protections afforded to such institutions. The AC, if their claim is real, should use his status as the copyright owner to stop this violation of his rights.

Re:First-Sale cuts both ways (3, Insightful)

larry bagina (561269) | more than 6 years ago | (#23510456)

They can resell it for $80, then buy it back one week later for $65.

Re:First-Sale cuts both ways (1)

Zanth_ (157695) | more than 6 years ago | (#23510482)

I understand perfectly well. Libraries can and do liquidate their stock over time. Abiding by the same first-sale doctrine. My elaboration on why the author sees his video renting as bad but could be spun to be good was the intent over the direct comparison in terms of copyright holding violations (which of course my indication that a book can be photocopied, as simply as the author indicates his movie can be copied, is a direct comparison. Both are illegal but both are feasible. In the case of the doctrine of first-sale the law shouldn't be constructed to first assume everyone is a criminal, in fact no law should ever be enacted that first assumes someone is a criminal).

In the event that the video store is "renting" without a legal foot to stand on, i.e., the copyright is such that it prohibits such activities then OP shouldn't be whining about a "first-sale" doctrine but rather should be going out and getting a lawyer for a cease and desist order. What is at stake in that event is something quite different from the first-sale doctrine, it is regarding copyright infringement. The Ebay seller was not walking all over copyrights and if Autodesk was claiming that, it is evident why they lost the case. In the OP's case, if he is claiming the doctrine of first-sale somehow violates copyright the he is sorely mistaken and would lose in court. He would win the case though if he simply filed a motion of copyright infringement.

If we can assume then, it is quite legal for this video store to rent the video (else why would the OP continue to let this happen) then the only beef he can have is the fact that someone is making money off of his works and he is not receiving any royalties, comparable to what Autodesk was complaining about: we want all interested customers to buy from us directly.

In that case, my arguments from the above post are valid.

Re:First-Sale cuts both ways (4, Interesting)

Naughty Bob (1004174) | more than 6 years ago | (#23510286)

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!

Re:First-Sale cuts both ways (1, Informative)

Gewalt (1200451) | more than 6 years ago | (#23510298)

If they are renting their legally purchased physical copy, then yes, they are exercising their first sale rights, and you can GFY for thinking you have the right to stop them.

If they are duplicating your material, then you have every right to sue them for infringement.

Re:First-Sale cuts both ways (1)

StalinsNotDead (764374) | more than 6 years ago | (#23510442)

Just to point it out. But I believe the parent was pointing out that first sale rights cut both ways for the little guy, and his situation was one where it sucked. I don't think he made any assertions that he had the right to stop those renting their copy of his video.

Re:First-Sale cuts both ways (3, Informative)

stubear (130454) | more than 6 years ago | (#23510404)

Actually First Sale only allows one to resell their physical copy, nothing else. If they want to rent it then they have to enter into an agreement with you to do so. Copyright law protects you here. Ever wonder why rental late fees were so high? Rental stores pay (or they used to anyway; not sure how it works now) more for each copy explicitly for the right to rent the video and replacing them was expensive. The copyright holder gets more for these discs, though nothing compared to what the video stores could ultimately make for a new release, and video stores get to rent the videos. I'd suggest contacting a lawyer and proceed from there. You should be entitled to more per copy if they want to rent the video.

Re:First-Sale cuts both ways (0)

Anonymous Coward | more than 6 years ago | (#23510418)

by lowering your price to $ 30. P.S your video is available at the library- for free! Those bastards!

Re:First-Sale cuts both ways (1)

Thought1 (1132989) | more than 6 years ago | (#23510428)

[Disclaimer: IANAL] Did you sell them a license or the material? If it's a license, does the license you sold to them allow for rentals? Rental != sale — because ownership isn't transferring, it's simply something they're doing with your movie. Blockbuster and Netflix, for instance, both purchase "rental" licenses from the movie houses; they can't just pick up copies in bulk and start renting. Same with movie theaters — they purchase "public performance" licenses, because the standard license you'll see on your movies (ie, DVDs, etc) explicitly states that it doesn't grant the right of public performance.

and the problem is? (1)

RelliK (4466) | more than 6 years ago | (#23510460)

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.

and? How is it different from any other video? Should we outlaw all video rental stores just so you can make $80?

Re:Not really adding anything important but... (4, Insightful)

sm62704 (957197) | more than 6 years ago | (#23510202)

Not hardly. My PC recently died (I mentioned it in the other thread today) and I dragged an even older one from the basement. Now, I'd like to put my hard drives, wireless mouse and keyboard, video card with its S-Video so I can plug the TV as a monitor, etc in it.

XP is going to say that it's a different computer and refuse to run more than 30 days. It has a EULA that slashdotters say is a legal document (although I never signed anything) to back it up.

I fail to see how this court ruling benefits the user. As Agent Smith said to Neo, "what good is a phone call if you're unable to speak?"

Autodesk = a true evil empire (5, Insightful)

Anonymous Coward | more than 6 years ago | (#23509804)


Those of you who have not had to deal with their software and their heavy handed approach to licensing and upgrades are lucky.

Re:Autodesk = a true evil empire (5, Informative)

TheRealMindChild (743925) | more than 6 years ago | (#23510054)

I can surely attest to this. While in school for CS, I was a junior administrator in the MIS department, doing things like... well, everything that went wrong on the computer network. We dreaded when anything went wrong with Autocad. It was a bloody nightmare. Dongles would just stop working and their customer support would pretty much tell us that we were lying and trying to pirate the software. And it was like talking to a brick wall. No amount of sales receipts or serial numbers mattered. They didn't even care. Their solution every single time was to "Buy a new copy".

On top of that, upgrading almost never worked. It got to the point where an upgrade to Autocad meant loading up a new system image, then installing it first before anything else.

Re:Autodesk = a true evil empire (2, Interesting)

sumdumass (711423) | more than 6 years ago | (#23510310)

Interesting. I just moved a copy of Autocad from a windows 2000 machine to an XP laptop that was replacing it. I had to call and validate the license key for an activation code because the old one wouldn't work in the new OS. They gave me one no problem. They asked if I removed it from the old computer yet and I told them I couldn't do that until the new computer was totally functional.

That was for a county (government) office though. The licensing might be different elsewhere or they could have changed their procedures somewhat. However, we don't have any special government contracts that I am aware of with AutoDesk. I suppose I could check with the commissioners office to see if they billed us for a new license or something. But I don't think they did. At least I didn't authorize anything like that when on the phone with them. The subject never came up. I found dealing with them far easier then dealing with MS and their activation. MS attempted to tell me I had to buy a new OEM version because I replaced a dead hard drive with a different brand drive in a system once. After about 2 weeks of that, they reactivated XP and Office for me.

It would be interesting to see what is so different that caused totally different impressions of the same company.

Re:Autodesk = a true evil empire (0)

Anonymous Coward | more than 6 years ago | (#23510108)

We use some software where I work where we essentially rent it from the company.

SAS and ArcGIS are the big ones.

ArcGIS specifically we pay about 11k a year to use the software and 4 extensions. The license automatically expires after that. Even if its the same version as when we first installed it, one year later, nope, we don't get to use it anymore. I don't understand how companies can get away this.

Re:Autodesk = a true evil empire (1)

QuantumRiff (120817) | more than 6 years ago | (#23510398)

Because places like your work still buy it. Seriously, move to something else, encourage others to do the same, and let them know why you are moving, and that you will be happy to take a look at them again in a few years, to see if you like the licensing terms better

Re:Autodesk = a true evil empire (0)

Anonymous Coward | more than 6 years ago | (#23510290)

No kidding. And people bitch about Microsoft. I'm just glad that after 10 years of dealing with them, I no longer have to. I got to know a couple resellers pretty well. The end customer is not the only one to get screwed by Autodesk. The reseller gets screwed at least as much, if not more, than the end customer.

Re:Autodesk = a true evil empire (0)

Anonymous Coward | more than 6 years ago | (#23510314)

Adobe isn't much better.

Re:Autodesk = a true evil empire (-1, Flamebait)

The End Of Days (1243248) | more than 6 years ago | (#23510354)

Yeah, seriously. I can't believe they're allowed to get away with not selling software on my terms. Assholes. What happened to power to the people? Seems like all the power is in the hand of people who aren't people, instead of people, like me and you. Little guys is what I think we're calling ourselves in this thread, right?

Does this ruling support Microsoft Windows? (0)

Anonymous Coward | more than 6 years ago | (#23509812)


and people who resell it?

Re:Does this ruling support Microsoft Windows? (1)

zappepcs (820751) | more than 6 years ago | (#23509864)

I'm not sure, but have you tried to re-license Windows after moving it from one of your own home machines to another?

I don't think that this is in-line with anything that MS wants or does. It will clearly have an impact on the legality of DRM if your 'second hand purchased' media won't play on DRM infested hardware/software. I look forward to that group of lawsuits.

Re:Does this ruling support Microsoft Windows? (1)

Gat0r30y (957941) | more than 6 years ago | (#23510178)

I suspect even if it did it would be a cold day in hell before MS files suit against the suppliers which are the sole reason MS has been able to maintain a monopoly this long.

Also what about Cisco routers and switches? (4, Informative)

Anonymous Coward | more than 6 years ago | (#23510248)

Cisco has always claimed that when you buy a new router or catalyst switch from them that the IOS license is only good for the original purchaser of the hardware. You can legally sell the h/w as used equipment to another party later, but cannot legally transfer the firmware license to the buyer, they are supposed to have to re-purchase the IOS license again from Cisco, else they are illegally running it if the used router or switch came with the IOS software still present in its flash memory.

What about the ebay account? (4, Insightful)

Nichotin (794369) | more than 6 years ago | (#23509838)

What I could not figure out from the article was: What happens now to his ebay account? If it was pulled, I hope ebay restores it. Bugs me that ebay, google, youtube etc. always gets away for enforcing bogus claims. I did RTFA, but please enlighten me if I have missed something.

Re:What about the ebay account? (5, Informative)

phpmysqldev (1224624) | more than 6 years ago | (#23509870)

This article [blog.com] goes into more detail about that. Apparently his eBay account was restored (and good thing, I would be livid if I had a 10k+ feedback powerseller account taken from me)

Antiquated Thinking (3, Interesting)

ouvyt (1294074) | more than 6 years ago | (#23509848)

AutoCad aggressively attempts to make itself irrelevant. Why generate such bad press over a single copy... This follows the same backwards mentality of the book publishing industry, which thinks the less books in the hands of people the better.

Re:Antiquated Thinking (4, Insightful)

qoncept (599709) | more than 6 years ago | (#23509950)

People don't use AutoCad because they like the company behind it, they use it because they've decided it's the best tool for the job. The people using it cost a whole lot more than software, so you give them what will make them the most productive.

Re:Antiquated Thinking (2, Insightful)

ouvyt (1294074) | more than 6 years ago | (#23510088)

I agree. Thinking about it from the perspective of the potential buyer, AutoCad is making it difficult to purchase their software. It has been chatted about in the past how locking down software just encourages people to find alternative solutions to getting a copy. In this case it isn't a software lock, but a legal lock. Either way the result is creating a black market that didn't necessarily exist before.

Re:Antiquated Thinking (1)

poot_rootbeer (188613) | more than 6 years ago | (#23510462)

People don't use AutoCad because they like the company behind it, they use it because they've decided it's the best tool for the job.

Or, perhaps, the only tool for the job.

AutoCad is practically synonymous with "computer drafting software". The products that compete with it in the market are so rare that by comparison, The GIMP looks ready to steal Photoshop's market away.

Precedent (2, Informative)

Weaselmancer (533834) | more than 6 years ago | (#23510356)

Why generate such bad press over a single copy...

Because they were hoping to set a precedent, that's why.

Same reason the RIAA backs out anytime one of their victims looks like he can put up a decent fight. Precedent is powerful.

The difference here being that Autodesk got their asses handed to them because they decided to see their illogical claim all the way through to a ruling. I'm sure they were hoping for a ruling in their favor so that future claims would be a rubber-stamp process.

Unfortunately for them, they lost. Surprise! Now the rubber stamp is in the hands of the consumers. You takes your chances and you rolls your dice, right?

This is going to get to the Supreme Court (1)

analog_line (465182) | more than 6 years ago | (#23509854)

There's no way Autodesk is going to let this ruling stand unappealed, and if the appeals court rules against them again, there will be a cavalcade of software companies prepared to flood the Supreme Court with amicus briefs on their behalf.

Re:This is going to get to the Supreme Court (2, Informative)

whoever57 (658626) | more than 6 years ago | (#23509952)

There's no way Autodesk is going to let this ruling stand unappealed,
Autodesk might let it stand, since this is only a lower court verdict and they might consider it prudent to not get a appeals court verdict poking holes in EULAs.

Psystar (3, Interesting)

oahazmatt (868057) | more than 6 years ago | (#23509860)

A bit off-topic, but I'm wondering if Apple was actually waiting on this ruling before going after PsyStar for OS X.

Re:Psystar (1)

Sique (173459) | more than 6 years ago | (#23510034)

And now they won't go after Psystar, because Psystar has the First Sale Doctrin on its side?

Re:Psystar (1)

bsDaemon (87307) | more than 6 years ago | (#23510142)

I don't think first sale doctrine applies to the Psystar case, as the problem isn't that they're re-selling OS X. The problem is that OS X is running non non-Apple-branded hardware, which is in violation of the EULA.

Re:Psystar (1)

Auckerman (223266) | more than 6 years ago | (#23510472)

Even if software licenses have no bearing what so ever, Apple still has a claim against Pystar. Pystar is modifying, copying, then distributing copyrighted material. You NEED a license to do that. First sale doesn't allow you to distribute copies, even if it's with the original work.

Likewise in Finland since a number of years (5, Informative)

vinsci (537958) | more than 6 years ago | (#23509876)

A similar ruling is in effect in Finland since a number of years. The case was vs. Microsoft, decided by the supreme court that reselling MS Windows licenses is perfectly OK and Microsoft can't stop it. Don't have the reference handy, sorry.

Re:Likewise in Finland since a number of years (4, Informative)

Sique (173459) | more than 6 years ago | (#23510050)

Same in Germany. Google for "Microsoft" and "Snogard".

Re:Likewise in Finland since a number of years (3, Informative)

vinsci (537958) | more than 6 years ago | (#23510510)

I think it's this one: http://www.finlex.fi/fi/oikeus/kko/kko/2003/20030088 [finlex.fi] (I don't have time to verify it, though).

A commentary on the case: Ostajalla oikeus myydä ostamansa tietokoneohjelman kappale edelleen — KKO:n ratkaisu levittämisoikeuden raukeamisesta [iprinfo.com] (Rough translation: "Buyer has right to resell the copy of a program he has bought - Supreme Court decision on the ending of distribution right").

All the companies involved were: Adobe Systems Incorporated, Autodesk Incorporated, Borland International Incorporated, Lotus Development Corporation, Microsoft Corporation, Novell Incorporated and Symantec Corporation.

Product Activation? (5, Interesting)

nonsensical (1237544) | more than 6 years ago | (#23509886)

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.

Re:Product Activation? (5, Interesting)

Chris Burke (6130) | more than 6 years ago | (#23510128)

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.

Re:Product Activation? (0)

Anonymous Coward | more than 6 years ago | (#23510226)

Don't buy it then.

Open packet to read agreement. (4, Interesting)

Hankapobe (1290722) | more than 6 years ago | (#23509926)

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.

Woot! (1)

HikingStick (878216) | more than 6 years ago | (#23509938)

Woot! This is a good day for consumer rights!!!

Re:Woot! (2, Insightful)

uncoveror (570620) | more than 6 years ago | (#23510062)

Indeed. Our personal property right to resell tangible things we own has been trampled on by vapor makers for far too long. First sale and fair use are the only things keeping patent and copyright from becoming a complete perversion of their constitutional purpose, which is ..."To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries; "

It cuts both ways (1)

highfreq2 (575192) | more than 6 years ago | (#23509942)

Some people would prefer to buy non-transferable software licenses at a lower price. But if a software developer can't sell a non-transferable license, then folks are stuck paying for an option to sell they don't want and will most likely never use.

Re:It cuts both ways (1)

sobachatina (635055) | more than 6 years ago | (#23510326)

It seems like you are thinking about this backwards.

Software companies invented non-transferable licenses so they could sell normal licenses for more. It's all artificial. This ruling states that there is no such thing as a non-transferable license.

If software manufacturers decided to keep their old pricing scheme based on a lie that's their choice of course but I suspect customers would be less willing to accept it.

In the end they will no doubt simply invent some other artificial mechanism to justify higher prices that will work just as well as the last mechanism they invented.

No, it doesn't cut both ways (0)

Anonymous Coward | more than 6 years ago | (#23510336)

The principle of demand and offer still counts. Being allowed to resell an otherwise unused license that you first couldn't sell should make the price go down, not up.

This kind of ruling must scare the sh1t out of companies like AutoCAD.

Re:It cuts both ways (1)

scrib (1277042) | more than 6 years ago | (#23510424)

I believe this reasoning is flawed. I don't think products would be cheaper if you were not allowed to resell them. In fact, manufacturers usually sell to resellers at a discount.

Consider CDs. Do you honestly think the RIAA would charge less if people couldn't buy used copies?

Eliminating the resale market was attempted so they could charge everyone MORE for the product, not so they could offer some customers a lower price. The theory of "price discrimination [wisegeek.com] " fails in this case.

If I understand this, in short... (2, Insightful)

hyperz69 (1226464) | more than 6 years ago | (#23509948)

The courts found you are allowed to sell your own property. Even if the person you bought it from says you can't. At least in the area where software is concerned ;P

Nontransferable Licenses in question (5, Interesting)

icebike (68054) | more than 6 years ago | (#23509966)

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 [wikipedia.org]

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.

Re:Nontransferable Licenses in question (1)

Solandri (704621) | more than 6 years ago | (#23510502)

The ruling is important because it calls into question the whole concept of a Non Transferable license.
Especially interesting if you recall that Microsoft claims the OEM versions of Windows that come pre-bundled with new systems are non-transferable.

Why wouldn't it? (0)

Anonymous Coward | more than 6 years ago | (#23509972)

Well, why wouldn't it cover anything that's sold?

No lawyer (5, Interesting)

lantastik (877247) | more than 6 years ago | (#23509984)

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.

there is NO SIGNIFICANCE to this ruling (5, Informative)

Anonymous Coward | more than 6 years ago | (#23510010)

I just read this article. The author has no idea what a summary judgment motion is, nor the significance of having it denied. Summary judgment motions are just long shot motions brought early in a case to try to dismiss it if there are no facts in dispute. The significance of a *denial* of such a request simply means there are facts in dispute, or the law isn't so clear. IT IS A NON-EVENT. Nobody has won -- the case simply proceeds.

Re:there is NO SIGNIFICANCE to this ruling (1, Informative)

Anonymous Coward | more than 6 years ago | (#23510332)

Indeed. Denying summary judgment just means the case goes forward. From TFA:

The case is not over; the court has ordered both sides to sit down and discuss whether the case should continue and settle Vernor's claim that Autodesk engaged in unfair trade practices in violation of state law in either California (Autodesk's home) or Washington state (Vernor's home). Their report to the court is due June 27.

Re:there is NO SIGNIFICANCE to this ruling (1)

irenaeous (898337) | more than 6 years ago | (#23510348)

Mod Parent up. He is right about the rejection of a summary judgment not settling anything. All it means is that the legal claims are sufficiently non-trivial as to require adjudication. Nothing is settled.

Vernor 'bound' by a license? (5, Insightful)

Jason Levine (196982) | more than 6 years ago | (#23510066)

I'm glad to see this was slapped down. From my understanding (from reading the article) is that Vernor obtained boxed copies of AutoCAD (through some legal means) and then sold them on eBay. AutoDesk was claiming that Vernor was bound by their software license agreement. Even if you accept the validity of a click-through license (a big IF, I know), how would he have been bound by a license that he never clicked "I Agree" to? In AutoDesk's reasoning, did his mere purchasing of the boxed software bind him to the license? I can see how a judge would laugh this out of court. At least with a click-through license, you can present the license's text. In a "buy the box, bound to the license" agreement, where would the license be presented to you? As you were about to pay for the box, would the Best Buy checkout clerk hand you a 10 page agreement to sign? If they didn't, then the license can't be binding (you need to be able to read a contract before agreeing to it), if they did, a lot of people wouldn't feel comfortable signing a big, legal looking document every time they picked up a piece of software.

Re:Vernor 'bound' by a license? (3, Interesting)

Anonmyous Coward (1290620) | more than 6 years ago | (#23510416)

I wonder if this also applies to subscription services like DSL. I'm currently in the middle of resolving a dispute over a DSL early cancellation fee. Before I purchased the service, I asked for a copy of the license agreement. SBC said they didn't provide written copies of the agreement (At present, you can get them on the web, but you couldn't, or at least the salesman didn't tell me that I could at the time).

The salesman assured me that if I were to move before the 1 year contract was up and SBC couldn't provide service in the place where I moved to, I wouldn't be charged the fee. I did move to another state where they didn't have service 10 months into the contract, but they charged me the fee, claiming that because I moved to another state where they didn't operate, this clause didn't apply. (It only applies if you move to a place where they do operate but they can't provide service to that specific house for some reason).

Needless to say I called BS on them because I was never provided with a copy of the agreement and they certainly don't have my signature on anything. Unfortunately, consumers have no legal rights when it comes to a credit report. It's not considered liable because credit reports aren't public information. Anyone have an idea of a legal argument I can make that would force them to tell the credit agencies the bill is invalid?

Ebay time (0)

Mondo1287 (622491) | more than 6 years ago | (#23510072)

Fuck yeah I have a whole shelf full of old Autodesk products waiting for the bay.

Any implications for Steam? (1)

gumpish (682245) | more than 6 years ago | (#23510098)

Since I can't sell a game I've purchased through Steam, does this ruling have any implications for DRMed download-only software?

Re:Any implications for Steam? (1)

geekoid (135745) | more than 6 years ago | (#23510210)

"Since I can't sell a game I've purchased through Steam..."
Why not?

Re:Any implications for Steam? (1)

NeutronCowboy (896098) | more than 6 years ago | (#23510292)

I doubt it. DRM is a technological lock that is illegal to circumvent due to the DMCA. You can sell someone your copy of a steam game, but they will not be able to do anything with it.

As a result, the worth of that copy will be zero.

Expect it to settle out of court (4, Insightful)

Zontar_Thing_From_Ve (949321) | more than 6 years ago | (#23510100)

Well, this is what happens when you go to court. You sometimes lose. Expect Autodesk to quickly settle this out of court with quite generous, but non-disclosed, terms to Mr. Vernor. I don't see how they can take the risk that an appeals court will uphold this, so I expect them to pay him a lot of money (maybe $100,000 or more) and have him agree to a non-disclosure of the settlement. The court case will be dropped and Autodesk will not admit to wrong doing and the ruling won't apply since they settled. This will keep the door open that Autodesk or some other company might be able to try a similar case in the future and get a ruling in their favor.

Re:Expect it to settle out of court (1)

magarity (164372) | more than 6 years ago | (#23510436)

You have to settle out of court *before* the ruling. Now that it's been ruled upon, that option is gone. What kind of chaos would ensue in the post-ruling take-it-back court system you're proposing??

The worst thing was ... (2, Informative)

Anonymous Coward | more than 6 years ago | (#23510124)

If you read some of the other articles listed on the mentioned site, you'll learn that after he got each attempted sale pulled because of AutoCAD's DMCA complaints to eBay, and then restored (5 times!), he then got his entire sellers account frozen and not restored for a month. This affected not only the disputed AutoCAD sales, but everything else he was selling (vintage comic books, apparently).

All this from spurious DMCA complaints when the guy wasn't copying anything. Here's a boxed, legitimate version of AutoCAD, a copy made by AutoCAD, for sale. In what bizarro world does copyright even apply to that situation?

By the usual analogy, it would be like Ford suing a used car dealer for selling used Ford cars on the grounds that Ford's copyright had been infringed. Huh?

At most it's a contract issue. And a dubious, shrink-wrapped contract at that. The DMCA is irrelevant.

I hate to get overly technical... (2, Insightful)

Anita Coney (648748) | more than 6 years ago | (#23510134)

But what the court actually determined is that software licensing agreements (as currently written) do not apply to third parties. And that those third parties have the right to resell software under the first sale doctrine.

Even so, it's still an amazing ruling.

Anyone knows how these laws work in Canada? (5, Insightful)

urbanriot (924981) | more than 6 years ago | (#23510136)

I have a client that was recently nailed by the BSA for having illegitimate copies of Autocad, because they purchased them online through various Ebay auctions (they only needed 2005 LT, not the latest and greatest, expensive version). The BSA deemed their less than 10 copies to be illegal, and nailed them with a hefty fine. My client wanted to avoid a legal battle, so they settled and paid this fine.

That being said, does anyone know what the laws are in Canada regarding reselling retail, boxed Autocad, and if my client had a foot to stand on?

Re:Anyone knows how these laws work in Canada? (5, Insightful)

geekoid (135745) | more than 6 years ago | (#23510236)

"My client wanted to avoid a legal battle, so they settled and paid this fine. "
And that's why the get away with this crap. People willing to be shit upon for convenience.

Re:Anyone knows how these laws work in Canada? (1)

shentino (1139071) | more than 6 years ago | (#23510262)

He probably waived his right to appeal by settling.

All your software are belong to us (0)

Anonymous Coward | more than 6 years ago | (#23510190)

nt

Google's Attorney's Blog (5, Informative)

jmichaelg (148257) | more than 6 years ago | (#23510232)

This blog entry by William Patry [blogspot.com] adds quite a bit of background.

Patry is Senior Copyright Counsel for Google.

This ruling will be good for the industry (2, Insightful)

MikeRT (947531) | more than 6 years ago | (#23510274)

No doubt, part of the problem it has with piracy comes from the way that software isn't held to the same expectations as physical property, adjusted for the ability to copy it. If I buy a copy of Autocad, I should be able to sell my one copy of it. I can do that with anything else in my home. Why should software be exempted from this social and legal convention of property use?

Would this apply to... (1)

Smith55js (1206108) | more than 6 years ago | (#23510488)

Reselling a copy of Microsoft Office you no longer use because you upgraded to Open Office?
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