Federal Ruling Challenges Validity of Used Software Sales

[Tom Goldman]

Federal Ruling Challenges Validity of Used Software Sales

Reselling used software has always been part of the American way, but an appeals court ruling could change things.

The controversial used games and computer software market is unlikely to be shoved off the table anytime soon, but a recent court ruling may challenge the practice in certain situations. On Friday, the 9th Circuit of Appeals ruled in favor of Autodesk in a case where it sought to stop a vendor from selling its software on eBay.

Timothy Vernor reportedly bought a copy of Autodesk's AutoCAD [http://www.amazon.com/Autodesk-057C1-A8A111-1001-AutoCAD-LT-2011/dp/B003DS6EQK/ref=sr_1_1?ie=UTF8&s=software&qid=1284333774&sr=8-1] at a garage sale and put it up on eBay in 2005. After a back-and-forth between Autodesk and Vernor that saw his auctions removed and reinstated on the website, a legal battle over first-sale doctrine rights in regards to Autodesk software began.

The first-sale doctrine is the result of a century-old Supreme Court ruling that allows the purchaser of a product like a book, movie, or videogame, to resell it as long as additional copies aren't made. Autodesk believes the doctrine doesn't apply to its software as it's being "licensed" rather than sold.

The recent appeals court decision states that the first-sale doctrine is "moot" if there is no "definitive sale." Vernor's legal team is currently deciding whether or not to appeal the ruling to the U.S. Supreme Court, while eBay has issued statements in support of Vernor.

Corynne McSherry, a lawyer for the Electronic Frontier Foundation, says the decision, if upheld, could lead to more software developers "trying to find the magic words that prevent a buyer of intellectual property from being considered the owner." Attorneys involved with the case say it could have a "chilling effect" on the used software market, as the widespread use of licensing agreements "means the infrastructure already is in place for other software makers to say their customers don't really own those programs."

Videogame publishers have almost universally come out against the sale of used games by retailers like GameStop, which basically sell the used copy of their products right next to the new copy. Whether this ruling could have an effect on the used games market or not is unknown, but it seems like just a hop, skip, and a jump away if publishers are able to get clever enough. At the least, reselling certain kinds of used software may just have gotten a lot tougher, but we'll have to wait and see if other software developers and publishers are able to incorporate the "licensing" argument in their products to go against the first-sale doctrine.

Source: Yahoo News [http://news.yahoo.com/s/ap/20100910/ap_on_hi_te/us_tec_software_resale]

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[oranger]

I dunno...last time I checked handing over money for a product with no other agreement beyond cash-for-carry-out constituted a "sale".

edit: this is why a EULA isn't seriously binding; it takes effect post-sale.
Which means I'm free to not read anything, lie, and click "agree" to get my software running.

 

[GothmogII]

Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

 

[oranger]

Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

Absolutely, dude. The publishers just want their bread to be buttered on both sides.
And its greasy.

 

[ajofflight]

Oh god this is terrible... If they can actually get away with this... Then we'll have a tough time getting games for what they're WORTH.

 

[Marv21]

The Thing is that the reason these got so popular because it was saving money, and games usually don't have the umph for the 50 bucks you put into it....except maybe like Fallout 3, or L4d2(if you love the online), MW2 (same deal). So I think that it would be fair for the game companys to make the games significantly cheaper as to curb the used game sales.

 

[Irridium]

Games say your only "licensing" the game as well through the EULA. However in most cases(actually all I'm pretty sure), the EULA has to be agreed after you bought the game and are installing it. And I doubt that would fly at all in the courtroom.

Just because Publishers say something is law doesn't make it a law.

 

[Canadamus Prime]

Uh last time I checked, a "license" had to be renewed after a set period of time, whereas a "sale" was a one time cash payment in return for product or service. Since the purchasing of software clearly falls under the latter category, I fail to see how this claim is valid.

 

[Irridium]

Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

Maybe not in the traditional sense, but games at launch are usually a worse quality then the same game a month or more old. Since games seem to get updates all the time, the games get better, meaning if you sell it to someone else, the guy doesn't have all the updates, so he got an obsolete copy. Yes that explanation has its problems and is rather shaky, but so are most arguments against piracy/used games put out by game companies.

 

[thethingthatlurks]

Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

That's actually a valid point. If the argument is that one only purchases a "license," then the buyer must be made aware of ALL of the points of the agreement, as it would now constitute a contract (I think, don't know too much about legal things). Say hello to white boxes covered with text, that end in "by purchasing this product, you agree to the above stated limitations."
I hate the legal system sometimes, and not just because it allows stupid people to feel important due to some "arguing."

 

[mattttherman3]

Well, I don't think it matters one way or the other because gaming will go fully digital at some point, unfortunately.

 

[oranger]

Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

That's actually a valid point. If the argument is that one only purchases a "license," then the buyer must be made aware of ALL of the points of the agreement, as it would now constitute a contract (I think, don't know too much about legal things). Say hello to white boxes covered with text, that end in "by purchasing this product, you agree to the above stated limitations."
I hate the legal system sometimes, and not just because it allows stupid people to feel important due to some "arguing."

Actually I think even that would not constitute a valid license...you'd need the clerk to get each customer to agree. And I'm pretty sure that won't fly.
After all, you're not obligated to read shit until you have been obligated to as part of the...currency exchange for an eternal product license.
Yeah, I can't seem to make that sound legal.

 

[oranger]

Well, I don't think it matters one way or the other because gaming will go fully digital at some point, unfortunately.

And then one person will make a static/broken copy of the software, and we return to square 1.

 

[DocBalance]

Every day the free market dies just a little bit more. Curse you, Keynesian economics! Where's F. A. Hayek when you need him?

 

[wasalp]

if publishers do try to bring this to court it will probably lead to the court ruling that every software retailer has to make the client sign or agree to the liscensing. If it is something like that then the retailers could simply say they will stop selling from certain publishers if all they sell is the liscense...yeah.

hope that it's clear enough to read.

 

[thethingthatlurks]

Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

That's actually a valid point. If the argument is that one only purchases a "license," then the buyer must be made aware of ALL of the points of the agreement, as it would now constitute a contract (I think, don't know too much about legal things). Say hello to white boxes covered with text, that end in "by purchasing this product, you agree to the above stated limitations."
I hate the legal system sometimes, and not just because it allows stupid people to feel important due to some "arguing."

Actually I think even that would not constitute a valid license...you'd need the clerk to get each customer to agree. And I'm pretty sure that won't fly.
After all, you're not obligated to read shit until you have been obligated to as part of the...currency exchange for an eternal product license.
Yeah, I can't seem to make that sound legal.

Urgh, as if electronic store employees weren't annoying enough already...
"Hello Sir/Ma'am, can I get you the necessary 200 page contract so that you can purchase the license to a copy of Halo 24212.5? No, alright, have a good day then."
The day that happens, my bank will notice a substantial decrease in my spending, while my ISP will notice a sharp increase of bandwidth I use...