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

Soulskill posted more than 4 years ago | from the make-up-your-mind dept.

Software 758

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. "

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Bad consequences (5, Insightful)

Anonymous Coward | more than 4 years ago | (#33539190)

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

Re:Bad consequences (5, Insightful)

ChrisKnight (16039) | more than 4 years ago | (#33539438)

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.

Re:Bad consequences (5, Interesting)

Maxo-Texas (864189) | more than 4 years ago | (#33539486)

No. We need them to add it ASAP and push the issue hard.

This is one of those "on the internet" type things where the judges are missing reality because they are not seeing it in a familiar context.

Push the license for books, CD's, cars, clothing, everything you can.

Re:Bad consequences (1)

commodore64_love (1445365) | more than 4 years ago | (#33539616)

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

Goodbye sales of used goods on Ebay. Looks like I better sell-off all my CDs, DVDs, and PS2/Gamecube games now while I still can, else I'll be stuck with them forever.

Re:Bad consequences (5, Informative)

Anonymous Coward | more than 4 years ago | (#33539638)

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

They used to do exactly that, and that is exactly what the First Sale doctrine was created in response to.

This case is even more egregious than the summary suggests because the plaintiff Timothy Vernor never agreed to any license terms with Autodesk. He never opened the packages, never saw an agreement, never clicked through an agreement, and certainly never signed an agreement. Vernor owned these copies until this court said he didn't, and Autodesk's only recourse should have been a civil action against CTA for breaking its contract terms.

Re:Bad consequences (1)

Wyatt Earp (1029) | more than 4 years ago | (#33539494)

Here goes selling games.

They'll license them to you and make it illegal to sell or hand them off to friends.

This is a very bad decision.

Yay! (5, Insightful)

Pojut (1027544) | more than 4 years ago | (#33539196)

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.

Re:Yay! (5, Insightful)

Culture20 (968837) | more than 4 years ago | (#33539282)

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.

Re:Yay! (1)

DarkKnightRadick (268025) | more than 4 years ago | (#33539332)

Expect

Re:Yay! (2, Interesting)

DarkKnightRadick (268025) | more than 4 years ago | (#33539356)

/. is being stupid.

Expect one with your next CD or book.

Re:Yay! (1)

Sir_Lewk (967686) | more than 4 years ago | (#33539560)

You think cars don't have a shitton of software these days? A decent lawyer can probably dream up a way to apply this ruling to car sale (now car software licensing...) during his lunch-break!

And don't forget that the design of your next new house might be licensed from some architect...

Re:Yay! (1)

DarkKnightRadick (268025) | more than 4 years ago | (#33539666)

Oh yeah, I see those, but books and CDs first. Publishers have been chomping at the bit to get rid of First Sale longer than software vendors.

Re:Yay! (1)

LWATCDR (28044) | more than 4 years ago | (#33539586)

Already happened.
There is a comunity called Seaside in Florida. It has gotten many awards and is pretty famous.
One of the ways they make money is when you buy a home you agree to only sell the home through Seaside reality.
So they get a cut every time the home is sold forever.

Re:Yay! (1)

superxstudios (1142925) | more than 4 years ago | (#33539604)

They already do that with the warranties (on cars and anything else for that matter). Most, even "lifetime" warranties, are non-transferable.

Re:Yay! (2, Interesting)

NeutronCowboy (896098) | more than 4 years ago | (#33539392)

Yep. It's a done deal. There was actually a panel at PAX that addressed this directly. What you buy is a license, and the contract you sign is the EULA you click through when you install the software. You can abort the installation at that point, and the publisher (not the retail store) is supposed to refund you your purchase.

It's really, really important to read the EULA. It's not that people can put anything they want into it, but it's fairly close. Short of signing over constitutionally protected rights, anything goes. And the First Sale Doctrine is just that, a doctrine - not a federally protected right.

And yes, everyone and their brother will try to emulate this. The only good news is that it is much harder to enforce a license when buying an actual good, because people aren't used to having to sign a document when buying a stove or a TV. But since everyone is used to just clicking accept in the EULA, they are enforcable in software.

Re:Yay! (2, Insightful)

countSudoku() (1047544) | more than 4 years ago | (#33539536)

Well what about software delivered on a piece of hardware? Like a game cartridge.

This just opens up the doors for companies like Nintendo and their ilk to disallow the used game market to exist. Hooray, one more way to fuck over consumers.

Re:Yay! (1)

mwvdlee (775178) | more than 4 years ago | (#33539652)

How is a game cartridge different from a DVD containing AutoCAD?

Re:Yay! (1)

profplump (309017) | more than 4 years ago | (#33539684)

More importantly, how about cars? You can resell the car but first you have to disable and remove all the software. The new owner can license their own copy for a mere $5k direct from the OEM.

Re:Yay! (0)

Anonymous Coward | more than 4 years ago | (#33539570)

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

Actually first sale, (when it applies) is a federally protected right, because it was subsequently codified into law.

Even in the absence of being written into law, a SCOTUS decision has the same effect. The word "Doctrine" has no official standing.

As best I can tell, it only specifically applies to books, but I might be wrong about that.

Re:Yay! (5, Insightful)

russotto (537200) | more than 4 years ago | (#33539608)

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.

Re:Yay! (1)

locallyunscene (1000523) | more than 4 years ago | (#33539670)

So so far the 7th 8th and 9th Circuits have ruled this way. I wonder if one will go against the grain eventually and it will go higher or if they will all rule this.

And the real winner is... (1)

pepax (748182) | more than 4 years ago | (#33539446)

TPB

Worth nothing then.. (1, Insightful)

Anonymous Coward | more than 4 years ago | (#33539462)

One more reason not to pay ANYTHING for proprietary software or content..

It is worth nothing when you need to resell it, why should you pay more than nothing for it in the first place?

Re:Yay! (1)

Fred IV (587429) | more than 4 years ago | (#33539548)

Guess what people will do when they can't buy a used copy and don't have money for a new copy?

Either go without or infringe copyright by using an unauthorized copy. To the publishers, having their work pirated and seeing it sold second-hand are typically the same thing because they don't get paid in either of those two scenarios.

Oh, crap (5, Insightful)

ak_hepcat (468765) | more than 4 years ago | (#33539200)

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?

Re:Oh, crap (4, Insightful)

Dyinobal (1427207) | more than 4 years ago | (#33539308)

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

Re:Oh, crap (1)

dyingtolive (1393037) | more than 4 years ago | (#33539362)

My heart about leap through my mouth when I read this. I can only hope this gets appealed and shot down.

Re:Oh, crap (3, Insightful)

93 Escort Wagon (326346) | more than 4 years ago | (#33539400)

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 how, exactly, is this a change? What software do you currently have that's not licensed to you rather than sold?

I'm not saying it's right - I'm just saying I don't expect changes as a result of this ruling because this is pretty much what every software company does already.

Re:Oh, crap (0)

Anonymous Coward | more than 4 years ago | (#33539476)

Someone mod the 93 Escort Wagon up. Guess what the L in EULA stands for.

Why just software vendors? (3, Informative)

roystgnr (4015) | more than 4 years ago | (#33539478)

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...

Re:Oh, crap (1)

DragonWriter (970822) | more than 4 years ago | (#33539534)

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

No, because the standards articulated would not require most software vendors to change what they do to make people licensees but not owners of copies.

What it might change, however, is the way books, DVDs, CDs, and all other goods where there is significant copyright-protected content involved are sold other than software to be more like software has been for used.

Textbook publisher have got to be salivating over the way this opens the door for them to convert textbook purchasers into licensees under a non-transferrable license and instantly make sales of used textbooks illegal.

Re:Oh, crap (1)

mSparks43 (757109) | more than 4 years ago | (#33539554)

Not just software vendors.
I assume this also applies to selling all contracts.
Like, for example, debt.

Re:Oh, crap (1)

Teun (17872) | more than 4 years ago | (#33539626)

Do these judges even understand the enormity of their decisions?

Judges interpret the law, when you don' t like their decision first look at the law in question.

And I think the USofA could do with some more consumer oriented laws, not the least in the field of software.

Re:Oh, crap (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33539654)

No. I can see it extending to GPLv4 or other "copyleft" licenses -- but it's obvious someone releasing their work under a BSD license doesn't want to be a control freak, even for good. This decision only legalizes the software companies' attempt to claim they're not selling you a CD with a copy of $software, they're licensing you t4o use it, and I guess throwing in a CD for free; that's bad, but it doesn't mean anyone has to pull that -- I can still sell/give/offer for download real, genuine copies if I want to, same as always, and anyone who's not being a control freak or greedy bastard will do that.

Re:Oh, crap (1)

TheRaven64 (641858) | more than 4 years ago | (#33539696)

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

All licensing is through copyright. The difference is that Free Software, by definition, comes with a transferrable, sublicenseable, distribution license. All this ruling means from the perspective of Free Software is that a right that you have explicitly through the license already is not necessarily available implicitly in other products.

In other words, this ruling is great for Free Software, because it lowers the value of proprietary software.

9th Circuit (3, Informative)

Andorin (1624303) | more than 4 years ago | (#33539210)

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.

Re:9th Circuit (4, Informative)

Hatta (162192) | more than 4 years ago | (#33539376)

The 9th circuit court makes more rulings than any other circuit, so it also has more rulings overturned than any other court. In terms of percentages, they are not more overruled than any other court.

As for the chances of the Supreme Court overturning this... Has this Supreme Court overturned *any* rulings favorable to corporations?

Re:9th Circuit (0)

nameer (706715) | more than 4 years ago | (#33539566)

I doubt the Supreme Court will even take this one up. This one is now settled.

Re:9th Circuit (2, Interesting)

NeutronCowboy (896098) | more than 4 years ago | (#33539418)

This has nothing to do with the 9th Circuit Court. This is strictly a contract issue. Can you enforce a contract that gets signed after money has already exchanged hands? That's it.

  You also managed to repeat the misleading statement that it is the most overturned - it is also by far the one that gets cases most often to the Supreme Court, and one of the two busiest circuits in the nation.

Re:9th Circuit (0)

Anonymous Coward | more than 4 years ago | (#33539496)

It's far more complicated than that, though. For one thing, if the 9th Circuit is more often appealed to the SCOTUS, does that mean that their rulings are more likely to be appealed? And if they simply make more rulings than other circuits, is that because there is something inherent in the way the court operates that makes them a preferred venue for certain types of cases?

Re:9th Circuit (1)

93 Escort Wagon (326346) | more than 4 years ago | (#33539530)

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.

Many of the overturned rulings from this circuit are related to its (perceived) "liberal" slant and interpretation of the law - the higher court is more conservative, and so its legal interpretations differ from the Ninth's. Given that this decision appears to fall on the conservative side of the spectrum, though, I'm less hopeful than you are with regard to this specific ruling.

I'd like to see it overturned; don't get me wrong.

Re:9th Circuit (3, Insightful)

phantomfive (622387) | more than 4 years ago | (#33539550)

Yes, but the vast majority of decisions by the 9th circuit court are not overturned, so that doesn't mean anything. Obviously the law isn't clear in this matter (otherwise it wouldn't have gotten this far), so it is anybody's guess what the Supreme Court will do.

It kind of makes sense, you should be able to license software to somebody, just like you should be able to rent a car to someone. The problem is (in my opinion) it should require more than a EULA stuffed in a box, or that you click on, to bind you to such a contract. If you sell something by selling it like an object, people are going to have a reasonable expectation that they bought it.

Re:9th Circuit (1, Informative)

DragonWriter (970822) | more than 4 years ago | (#33539580)

The 9th Circuit is apparently the most overturned court in the country

That 9th Circuit decisions are more apt to be overturned is a myth just like the myths that the 9th Circuit is more anti-business or more liberal than any other circuit.

     

Whatever happened to copyright? (4, Insightful)

Darkness404 (1287218) | more than 4 years ago | (#33539212)

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.

Re:Whatever happened to copyright? (0, Insightful)

Anonymous Coward | more than 4 years ago | (#33539340)

Now, while producers now have more power, consumers have less.

Well, to be fair, consumers now have much more power than they used to; namely, the power to duplicate and distribute an endless number of copies of whatever the producer was selling. Idiotic rulings like this one are basically misguided attempts by elderly judges to restore what they think will be a level playing field.

Re:Whatever happened to copyright? (3, Funny)

NeutronCowboy (896098) | more than 4 years ago | (#33539460)

This is not about copyright. This is about contracts, which can apply to any good or service. The only question is what kind of contracts can be enforced through EULAs. Turns out, quite a wide range.

You know what will fix this problem in a hurry? People reading the EULA, rejecting it, and petitioning the publisher for a refund. If Activision would have to field to field about a million refund requests for SC2, I bet you that EULAs would get fixed in a jiffy. But since everyone just clicks Accept, nothing will change.

Re:Whatever happened to copyright? (1)

Darkness404 (1287218) | more than 4 years ago | (#33539646)

But a contract can't contain anything that goes beyond what is legally enforceable. I can't write up a contract for someone to steal $50K from a bank then challenge them a court of law when they don't. That should be the case here, first sale doctrine is one of the 3 main pillars of our copyright system. A contract that excludes the first sale doctrine might as well say that the copyright is good for 32423423423423423423 years, to say that first sale doctrine doesn't apply is the same principle. A contract shouldn't be able to go beyond the basic bounds of law.

Re:Whatever happened to copyright? (1)

DragonWriter (970822) | more than 4 years ago | (#33539612)

Whatever happened to copyright as it was originally made that copyright was a compromise between consumers and producers.

No, it wasn't. Copyright, when it was originally made, was a government granted monopoly for the benefit of producers that was the result of producers lobbying government to protect them.
 

So let me get this straight... (5, Insightful)

Anonymous Coward | more than 4 years ago | (#33539238)

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.

Re:So let me get this straight... (1)

tempest69 (572798) | more than 4 years ago | (#33539466)

I was hoping I had mod points for saying exactly what I was thinking... damn your telepathy.

Re:So let me get this straight... (4, Insightful)

NeutronCowboy (896098) | more than 4 years ago | (#33539482)

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.

Re:So let me get this straight... (1)

Frosty Piss (770223) | more than 4 years ago | (#33539556)

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.

I agree that this is an issue with "shrink wrap" consumer software.

But the bigger players use this with "enterprise grade" software that the buyer (should have) read the licence before agreeing to. If you *agree* to a licence that prohibits resale, that's on you.

Not Quite (1, Interesting)

Frosty Piss (770223) | more than 4 years ago | (#33539258)

Headline:

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

No, that's not what the Court said. Here's a more accurate sound bite:

the first sale doctrine is "unavailable to those who are only licensed to use their copies of copyrighted works."

What the Court is saying is that *if you agree* to a licence that prohibits you from reselling the software, than you can't resell it. It's a licencing issue, not an ownership issue.

What to learn from this? Don't agree to this sort of licence. Build software in-house (or have built for you), or use Open Source. This sort of licence will start to fade as more and more Open Source projects attain "enterprise quality". Tell these software houses that still use this sort of licence to hit the road.

Re:Not Quite (4, Informative)

Andorin (1624303) | more than 4 years ago | (#33539344)

> 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.

Re:Not Quite (1)

Frosty Piss (770223) | more than 4 years ago | (#33539592)

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's what they tell you, but if you are persistent you can get a refund. People have to educate themselves and assert their rights. One right is to not buy something.

Re:Not Quite (2, Insightful)

Darkness404 (1287218) | more than 4 years ago | (#33539398)

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.

Re:Not Quite (1)

Dr. Evil (3501) | more than 4 years ago | (#33539538)

Totally.

What I don't get with EULA shrinkwrap agreements is the very assertion "by opening this box..."

I already have the right to open the box, I ignore their puny sticker and I refuse to relinquish my unfettered right to open the box, much less read their contract.

Re:Not Quite (4, Interesting)

DarkKnightRadick (268025) | more than 4 years ago | (#33539406)

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?

Re:Not Quite (1)

geekoid (135745) | more than 4 years ago | (#33539412)

This would apply to FOSS as well.

Re:Not Quite (1)

pete-classic (75983) | more than 4 years ago | (#33539472)

Only to FOSS with an end user license agreement. The GPL, for example, is explicitly not an end user license agreement. No license is required to use GPLed software.

The GPL only controls copying of software. Once the copy exists the GPL doesn't apply.

-Peter

Re:Not Quite (1)

IQgryn (1081397) | more than 4 years ago | (#33539488)

Except FOSS won't prevent you from re{selling,distributing} the software, else it wouldn't be FOSS...

Re:Not Quite (0)

Anonymous Coward | more than 4 years ago | (#33539416)

There are instances in when YOU HAVE NO CHOICE but to accept the EULA. Video games are the best example of this. "You won't agree to the EULA? Oh, TS, then you can't play our game." With these instances, there are NO alternatives to the game.

Re:Not Quite (2, Insightful)

vux984 (928602) | more than 4 years ago | (#33539420)

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.

Re:Not Quite (1)

thestudio_bob (894258) | more than 4 years ago | (#33539444)

Yeah, that works in theory, but what happens when all the software vendors are putting this clause in their license agreement... which you know is going to happen?

First, it starts with things like AutoDesk, then it trickles down to Adobe and their Creative Suite, then it hits the console game market... pretty soon you won't have any other option. And how exactly am I going to purchase a PlayStation game that I can create in-house? or create a Photoshop alternative in-house?

Re:Not Quite (1)

Mongoose Disciple (722373) | more than 4 years ago | (#33539498)

This sort of licence will start to fade as more and more Open Source projects attain "enterprise quality".

I would prefer the world in which your statement is correct, but I don't think we live in that one.

To use this case/article as an example, we're a long, long, long way of from a FOSS replacement of AutoCAD.

Re:Not Quite (1)

kelarius (947816) | more than 4 years ago | (#33539552)

So now I have to wonder on how long it is before Microsoft adds this clause to their EULA. Imagine that every time you buy a used computer you have to buy a new copy of windows, or pay a fee to transfer this. What this ruling really does is give software vendors free reign to fuck over people with licensing agreements and if companies that deal in indispensable software, like Microsoft, get a mind to pull some antics like this it could really hurt the consumers.

And dont argue with me about whether any software is truly indispensable, most of it is still in wide use and and isnt going to change any time soon.

Re:Not Quite (1)

geekoid (135745) | more than 4 years ago | (#33539562)

I can't wait to find out how much it will cost me to have a private company build me a copy of Team Fortress II...

Re:Not Quite (1)

russotto (537200) | more than 4 years ago | (#33539576)

No, that's not what the Court said. Here's a more accurate sound bite:

That's exactly what the court said. But that's not the real problem. The real problem is when they decided that a transaction is a license rather than a sale. And their decision is basically "whenever the software maker says so". The three part test is

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.

But (2) and (3) are completely circular. The case was about whether or not the software manufacturer could restrict the user's ability to transfer the software (first sale rights), and (3) is also dependent on whether there is a license or not. So it comes down to "it's a license if the seller says it is a license", completely vitiating first sale. All software makers have to do to get around first sale is say the software licensed rather than sold, and that you can't resell the software, and that you can't use it in some circumstance.

This should really go to the Supreme Court... (4, Interesting)

nebaz (453974) | more than 4 years ago | (#33539274)

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.

I can't see how EULAs can be enforceable... (3, Insightful)

Radical Moderate (563286) | more than 4 years ago | (#33539702)

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?

So now any company (1)

future assassin (639396) | more than 4 years ago | (#33539280)

can just supply a single user license to any product and there goes the second hand market. THats fine but you'd better drop the price of your item by 50%.

Re:So now any company (1)

Wildclaw (15718) | more than 4 years ago | (#33539648)

Are you kidding. They will raise prices by 50% because there is less competition.

Used video games (2, Insightful)

jdgeorge (18767) | more than 4 years ago | (#33539304)

It will be interesting to see how this plays out. If this ruling holds, the used video game market is on its last legs.

Re:Used video games (3, Insightful)

geekoid (135745) | more than 4 years ago | (#33539434)

OTOH piracy will gain a boost.

Re:Used video games (1)

NeutronCowboy (896098) | more than 4 years ago | (#33539522)

Jackpot. Especially with automatic enforcement through tying software to online network logins.

Personally, I'm largely fine with it because I don't deal with the used video game market. But I recognize that this will kill it, and set a very dangerous precedent for other markets, including the one of trading games among friends. Not to mention that this will reinforce the notion of business people all over that they're owed revenue, and shouldn't have to beg the population to part with their money.

Re:Used video games (1, Insightful)

Anonymous Coward | more than 4 years ago | (#33539632)

Posting as AC because I already moderated this thread.

This ruling is much more likely to affect the PC game market than the console market in the near term because console games do not, as yet, require installation before you begin playing them. An installation process means an opportunity for the publisher to foist a license on you before you can play. Now that HDDs and network connections are a standard part of the modern console, however, I wouldn't be surprised if the next generation required installation, on-line activation, tethering to your XBL/PSN account, etc. Which means the death of the used market. Of course, we were moving in that direction anyway; this ruling is just another nail in the coffin.

Re:Used video games (1)

jdgeorge (18767) | more than 4 years ago | (#33539676)

Good points, though console games with online interaction models either already do have or could have licensing that would make this an issue. In any case, I agree in general.

I will enjoy watching piracy numbers escalate. (4, Insightful)

Spazntwich (208070) | more than 4 years ago | (#33539310)

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.

EULA-mania (3, Interesting)

Citizen of Earth (569446) | more than 4 years ago | (#33539322)

Starting tomorrow, every movie release will come with an EULA.

Re:EULA-mania (5, Insightful)

AnonymousClown (1788472) | more than 4 years ago | (#33539622)

On eBay tomorrow you will find:

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

The Effect on Games? (1)

rakuen (1230808) | more than 4 years ago | (#33539338)

Well, games are a type of software, right? I'm not familiar with the exact licensing language used, but would this decision potentially make reselling video games illegal as well?

At least we aren't stealing any more (4, Interesting)

mtmra70 (964928) | more than 4 years ago | (#33539370)

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'.

Re:At least we aren't stealing any more (1)

immakiku (777365) | more than 4 years ago | (#33539508)

Can you elaborate? How does this prevent them from suing for IP theft?

Re:At least we aren't stealing any more (0)

Anonymous Coward | more than 4 years ago | (#33539662)

Now, IANAL, but dude... that's just not true. Copyright basically states that only the creator (or more specifically, copyright holder) can make copies of the work. A license then gives others rights to the work that they would normally not have. Making a copy without a license to do so is a copyright violation, plain and simple. That doesn't change. The people who used the word "theft" first were probably /. editors.

Re:At least we aren't stealing any more (1)

DragonWriter (970822) | more than 4 years ago | (#33539674)

If we are just a licensee, then that means they can't sue for intelectual property theft.

There is no such offense as "intellectual property theft" in the first place. There are various criminal and civil offenses under copyright and other IP laws, and none of them are usually labelled "theft". Often, the word theft is used informally or metaphorically in reference to IP violations, but that has nothing to do with the actual legalities.

 

Time to Burn Down the Supreme Court (2, Insightful)

WillAffleckUW (858324) | more than 4 years ago | (#33539372)

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.

Re:Time to Burn Down the Supreme Court (1)

rakuen (1230808) | more than 4 years ago | (#33539436)

Federal Appellate Court != Supreme Court. Of course, the Supreme Court isn't guaranteed to hear the case, but there's still room for appealing.

Re:Time to Burn Down the Supreme Court (1)

WillAffleckUW (858324) | more than 4 years ago | (#33539528)

The Supreme Court isn't very appealing.

They think Corporations are People when they're not even mentioned in the US Constitution even though Wall Street had been around since before NYC was English-speaking.

Re:Time to Burn Down the Supreme Court (3, Insightful)

Ironhandx (1762146) | more than 4 years ago | (#33539704)

I wish this wasn't modded flamebait. You folks should realize that revolution doesn't necessarily mean flag burning and civil war. It does mean that you have to gather enough popular support to oust the current government though.

Revolution CAN be peaceful. It will always cause upheaval, but if the system is broken enough, it needs to be thrown out and rebuilt.

Not that I'm saying its necessarily time for Americans to do so, or that this is the sort of issue that should cause a revolution, but there are more than just this fellow that seem to feel that one is necessary, on both sides of the political spectrum.

That really sucks. (2, Insightful)

cfulton (543949) | more than 4 years ago | (#33539394)

That really, truly, SUCKS!!

Another nail (0)

Anonymous Coward | more than 4 years ago | (#33539468)

in the coffin for purchased non-FOSS software.

So the answer is... (0)

Anonymous Coward | more than 4 years ago | (#33539500)

Stop buying licensed software, right? Let the market correct on its own... /wishes I was serious

More than just software (1)

Tubal-Cain (1289912) | more than 4 years ago | (#33539506)

...unavailable to those who are only licensed to use their copies of copyrighted works.

Doesn't this apply to more than just software? Do you own your book or are you merely licensed to use it?

One possible solution (0)

Anonymous Coward | more than 4 years ago | (#33539512)

Since persons under the age of 18 cannot enter a legally binding contract, just have your kids buy and install your software for you. Problem solved.

Re:One possible solution (1)

shentino (1139071) | more than 4 years ago | (#33539706)

Won't work.

Having your children do it on your behalf makes the child your agent, and you are responsible, both as a parent responsible for their actions, and as a principal with an agent acting on his or her own behalf.

Soooo (1)

geekoid (135745) | more than 4 years ago | (#33539546)

reselling an Apple computer is now illegal in Ca?

"The Software & Information Industry Association, whose members include Google, Adobe, McAfee, Oracle and dozens of others, urged the court to rule as it did."

I understand Google is part of the SIIA, but did they make a statement about this specific issue?

Re:Soooo (1)

Mack428 (802800) | more than 4 years ago | (#33539698)

That is exactly what I was thinking. According to this new ruling would selling a used computer with anything but a blank hard drive be a violation? Could you sell it reset to factory install? Would you have to purchase all new licensing for the PC if you purchased it used?

Activist judges (0)

Anonymous Coward | more than 4 years ago | (#33539598)

Where are the people whining about activist judges now? Oh, that's right, activist judges are OK if they're right-wingers.

class action lawsuits against retailers (0, Interesting)

Anonymous Coward | more than 4 years ago | (#33539602)

Now we should all file class action lawsuits against retailers (including Microsft too) for calling it "Sale" at their stores for software when they actually meant "License".

abolish the copyrights and patents (0, Redundant)

roman_mir (125474) | more than 4 years ago | (#33539664)

We must repeat [slashdot.org] over [slashdot.org] and over [slashdot.org] that copyrights and patents must be abolished.

It works for the fashion [slashdot.org] industry and that industry is much bigger than software in total sales.

It must be done.

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