V
viewpoints
DOI: 10.1145/1467247.1467258
legally Speaking
When is a “license”
Really a Sale?
Can you resell software even if the package says you can’t? What are the implications
for copyright law of the Quanta decision discussed in the November 2008 column?
When YoU pURChaSe a
software package, the
package will often inform you (or the software will inform you
when you install it on your computer),
that you are not the “owner” of a copy of
it, but only a “licensee” whose entitlement to use the software is subject to
certain restrictions. This may include a
restriction on transferring your copy of
that software to anyone else.
Suppose you ignore the no-transfer
restriction and sell the software to
someone. Have you breached an enforceable contractual obligation to the
software’s developer? By transferring
the package to someone else, have you
infringed copyright or induced the purchaser of the software to infringe copyright? Is the purchaser of the used software an infringer when he loads it on
his computer? Is he too bound by the
license restrictions?
illustration By alicia kuBista
There is, oddly enough, no definitive court ruling on these questions. In
Vernor v. Autodesk, Inc., a judge recently
ruled that a purchaser of used software
could lawfully sell the package on eBay
because he was entitled to the benefits of
the “first sale” rule of copyright law. This
rule provides that although copyright
owners may control distributions of
their works to the public, the first sale of
a particular copy to the public exhausts
their right to control any further distribution of that copy. The rule applies to
all transfers of ownership, including
gifts or bequests, but not to licenses.
Reinforcing the Vernor ruling was
UMG Recordings, Inc. v. Augusto , in which
a judge recently refused to enforce a restrictive legend forbidding recipients of
promotional CDs from selling or otherwise transferring the CDs to other people. As in Vernor, the court ruled that it
was lawful for Augusto to sell the used
CDs on eBay under the first sale rule.
UMG has already appealed the
Augusto ruling to the Ninth Circuit Court
of Appeals (which reviews lower court
decisions from California and Washington where Vernor and Augusto were
rendered), and Autodesk is likely to appeal as well. I predict that the Augusto
ruling will be affirmed. Vernor is a closer case, but it too may be affirmed unless the Ninth Circuit overturns one of
its long-standing precedents.
UMG v. Augusto
Augusto buys and sells promotional
CDs that UMG, among others, ship
