Used Software Can Be Sold, Says EU Court of Justice

[IainB]

This took me by surprise:
Used Software Can Be Sold, Says EU Court of Justice

Posted by timothy on Tuesday July 03, @08:46AM
from the over-and-over-and-over dept.

Sique writes:
"An author of software cannot oppose the resale of his 'used' licenses allowing the
use of his programs downloaded from the internet. The exclusive right of distribution of a copy of a computer program covered by such a license is exhausted on its first sale. This was decided [Tuesday] (PDF) by the Court of Justice of the European Union in a case of Used Soft GmbH v. Oracle International Corp.."

[eleman]

Thank god. Are people (and/or governments) waking up to the detrimental effects of copyright maximalism?

[rgdot]

If you have uninstalled and not using it anymore that already exists, 'legally'. I know of at least one example, Rosetta Stone, email them the deactivation code. They have no way of knowing if the other person using it after you have uninstalled didn't pay you for it.

[IainB]

Thank god. Are people (and/or governments) waking up to the detrimental effects of copyright maximalism?

Snap! That's almost exactly what I thought to myself too.    
In fact it's a bit like a step towards a severe correction to the tendency towards copyright "absolutism".
Who knows, it could even be opening the door to the possibility of the abolition of copyright?
Copyright certainly seems to have been used as a legal principle that has held us in thrall to the monopolies for decades, and which is still apparently being used by monopolies to keep us in that state and even reinforce it.
This new step could thus be regarded as antitrust legislation.

[tomos]

Will be interesting to see what happens now.

Will software now have to cater to being passed on/sold and re-registered?
Commenter(s) make the point that this could end up with Software being sold as an expiring lisence model rather than "a permanent right to use the copy".

Some saying software doesnt wear out. But it does really - you've got to upgrade it eventually. So this must not be a negative thing for software companies imo.

In Germany (possibly in all EU?) "courts ... have ruled years ago that taking OEM software licenses out of a bundle and selling them separately is legal."
I bought windows that way (was originally intended for a Dell machine. I looked again lately though and there were almost no OEM copies on offer - I dunno did they clamp down on the supply or what happened.)

Adobe used to allow users to transfer registration. I dont know if that's still the case.

[Renegade]

Will be interesting to see what happens now.

Will software now have to cater to being passed on/sold and re-registered?

Not sure... I'm thinking that there may be a backlash, e.g. sell activations for software that are linked to email addresses -- all of a sudden, the software is unusable and unsellable for any after market.

There's more than one way to be a prick.

[app103]

In fact it's a bit like a step towards a severe correction to the tendency towards copyright "absolutism".
Who knows, it could even be opening the door to the possibility of the abolition of copyright?

Seems more like extending the application of First Sale Doctrine to downloaded digital goods. First Sale Doctrine limits the copyright holder's rights to the first sale and allows resale of used goods. First Sale Doctrine is what currently allows you to sell, gift, or lend your used music CD's, movie DVD's, and printed books, and allows libraries & rental businesses to exist without violating copyright law. Previously, digital goods were not included in that because unlike copyrighted goods sold on physical media, transfer required reproduction of the digital goods.

Here is another good read to explain the issues with reproduction and First Sale Doctrine, under current US law, and why the doctrine doesn't apply to software in the US: http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm01854.htm

[TaoPhoenix]

Here is another good read to explain the issues with reproduction and First Sale Doctrine, under current US law, and why the doctrine doesn't apply to software in the US: http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm01854.htm

So the key section seems to be here:
The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. The right to distribute ends, however, once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c). Since the first sale doctrine never protects a defendant who makes unauthorized reproductions of a copyrighted work, the first sale doctrine cannot be a successful defense in cases that allege infringing reproduction.

So is the US version saying that you have trouble selling "that particular copy" because if it was a download on to a HD it can never be the same file if you put it anywhere else for the buyer? What if the original download was on a removable medium?

[app103]

So is the US version saying that you have trouble selling "that particular copy" because if it was a download on to a HD it can never be the same file if you put it anywhere else for the buyer? What if the original download was on a removable medium?

You should have read the next paragraph:

Most computer software is distributed through the use of licensing agreements. Under this distribution system, the copyright holder remains the "owner" of all distributed copies. For this reason, alleged infringers should not be able to establish that any copies of these works have been the subject of a first sale.

When you buy a book, you own the physical book, you can legally sell it if you want. First Sale doctrine applies.

But when you buy software, you never actually own it under US law. You have only bought for yourself a right to use it. The copyright owner still owns the software, so you can't sell it. First Sale doctrine doesn't apply because a first sale was never made.

[eleman]

When you buy a book, you own the physical book, you can legally sell it if you want. First Sale doctrine applies.

So what's stopping book sellers (or refrigerator sellers for that matter) from attaching an EULA on the back of the cover (inside the refrigerator) and claiming that the book (refrigerator) was not actually sold, it was just licensed?

[ewemoa]

I don't know about the specifics for the current question, but IIUC, just because some company prints some text on some label, it doesn't automatically mean that what is printed there applies legally.  They can claim what they want, but that doesn't necessarily hold up -- at least that's my current understanding.

[barney]

When you buy a book, you own the physical book, you can legally sell it if you want. First Sale doctrine applies.

But when you buy software, you never actually own it under US law. You have only bought for yourself a right to use it. The copyright owner still owns the software, so you can't sell it. First Sale doctrine doesn't apply because a first sale was never made.

Which puts a rather fine line in re ebooks.  Are they books?  Or are they software?

And just how does that affect the free [e]books that you can download from such sites as guttenberg.org?  Do they hold copyright on the electronic version of a public domain tome?  'Tis a troublesome coil, these copyright issues.  And the way copyright law is written, as I understand it, you can be taken to task for violating copyright by other than the copyright holder.

Aside:  should it be guttenberg.org, or gutenberg.org ?  Or was that a copyright issue  ?

[ewemoa]

I was just reading the following yesterday:

 Misinterpreting Copyright - A Series of Errors

I haven't verified the points made in the piece, but it has sparked my interest to investigate further.

As I understand it, the piece has mostly to do with the U.S. -- don't have any clue about other countries.

[barney]

Thank you  - and damn you ! - for that link.  Now I'll be up for the rest of the night [hopefully] assimilating what is there.  Gonna ruin a [semi-]perfect alcoholic buzz with significant amounts of dark coffee  .  Hopefully, however, I'll benefit from your largesse  .

[Edvard]

...
Some saying software doesnt wear out.
...

Apparently, Intuit customer service does:

http://omgplzstfukthx.blogspot.com/2008/01/you-need-exe-fluid.html

[tomos]

...
Some saying software doesnt wear out.
...

Apparently, Intuit customer service does:

http://omgplzstfukthx.blogspot.com/2008/01/you-need-exe-fluid.html

... has your boss got pointy hair

[4wd]

But when you buy software, you never actually own it under US law. You have only bought for yourself a right to use it. The copyright owner still owns the software, so you can't sell it. First Sale doctrine doesn't apply because a first sale was never made.

I thought I remembered something about a court case involving the sale of secondhand software in the USA: Court smacks Autodesk, affirms right to sell used software

Highlighting by me:

A federal district judge in Washington State handed down an important decision this week on shrink-wrap license agreements and the First Sale Doctrine. The case concerned an eBay merchant named Timothy Vernor who has repeatedly locked horns with Autodesk over the sale of used copies of its software. Autodesk argued that it only licenses copies of its software, rather than selling them, and that therefore any resale of the software constitutes copyright infringement.

But Judge Richard A. Jones rejected that argument, holding that Vernor is entitled to sell used copies of Autodesk's software regardless of any licensing agreement that might have bound the software's previous owners. Jones relied on the First Sale Doctrine, which ensures the right to re-sell used copies of copyrighted works. It is the principle that makes libraries and used book stores possible. The First Sale Doctrine was first articulated by the Supreme Court in 1908 and has since been codified into statute.

...

But as Vernor's lawyers pointed out, the distinction between a lease and a sale is based on the actual characteristics of the transaction, not merely on how the transaction is described by the parties. And characterizing AutoCAD as merely licensed, rather than sold, barely passes the straight face test. AutoCAD customers pay a lump sum at the time of purchase, with no obligation to make further payments or to return the software at the conclusion of the supposed lease.

...

As the Electronic Frontier Foundation's Corynne McSherry put it in a Thursday blog post, "if it looks like a duck and quacks like a duck, chances are it's a duck." Autodesk clearly sells its software, and merely re-labeling the transaction as a license doesn't negate the First Sale Doctrine.

[IainB]

I've just cross-linked this discussion to Re: Reader's Corner - The Library of Utopia, because it potentially could embrace "used" ebooks.
That is, if used software can be sold as such, then digital material generally could potentially be regarded in the same light - e.g., including ebook files, mp3 files, etc.
Not holding my breath, mind you.    

[ewemoa]

Now I'll be up for the rest of the night [hopefully] assimilating what is there.

I hope your health wasn't impacted adversely   At least the writing seems clear and it didn't feel too long...

[4wd]

Gonna ruin a [semi-]perfect alcoholic buzz with significant amounts of dark coffee  .

Which would be improved by the addition of Kahlúa and keep the buzz going a little longer

Or just drink the Kahlúa and get your caffeine that way

[tomos]

Gonna ruin a [semi-]perfect alcoholic buzz with significant amounts of dark coffee  .

Which would be improved by the addition of Kahlúa and keep the buzz going a little longer

Or just drink the Kahlúa and get your caffeine that way

or Irish Coffee

[barney]

Gonna ruin a [semi-]perfect alcoholic buzz with significant amounts of dark coffee  .

Which would be improved by the addition of Kahlúa and keep the buzz going a little longer

Or just drink the Kahlúa and get your caffeine that way

or Irish Coffee

A little Jameson's, a little Bailey's, a little Kahlúa, a little BlackJack ... 'twas all good, and greatly augmented my research ... now, if I could just remember what I found ...  .

As expected, while the document in and of itself was not lengthy, it had pointers to other elements that had to be followed. 

I spend some time over at Mike Mesnick, et al.,'s Techdirt - surprised I didn't see this, or reference to it, over there.

[app103]

I thought I remembered something about a court case involving the sale of secondhand software in the USA: Court smacks Autodesk, affirms right to sell used software

That case involved software originally sold on physical media, and the original physical media was being resold. The exact same copy that was originally purchased was resold. No reproductions were made. Once the physical ownership changed hands, there was still only 1 copy and the original owner no longer had it in his possession.

In the US, First Sale doctrine only applies to sales in which once you sell the item, you don't have it any more.

It doesn't work the same with digital downloads in the US because you can't transfer ownership of the exact original copy that you downloaded. Transfer of ownership of downloaded digital goods involves reproduction. You upload it to the buyer, and now there is the original file you downloaded, which you still have in your possession, and now the person you sold it to has a copy too, leaving you both in a position to be able to sell the file again and again and again, with the number of copies existing increasing with each sale. That's why First Sale doesn't apply.

[4wd]

It doesn't work the same with digital downloads in the US because you can't transfer ownership of the exact original copy that you downloaded. Transfer of ownership of downloaded digital goods involves reproduction. You upload it to the buyer, and now there is the original file you downloaded, which you still have in your possession, and now the person you sold it to has a copy too, leaving you both in a position to be able to sell the file again and again and again, with the number of copies existing increasing with each sale. That's why First Sale doesn't apply.

I agree with you about the difference between physical and downloaded digital goods but I'll have to disagree about there having to be two copies in existence if you sell downloaded content - that seems to be from the perspective of corporations.  There's nothing stopping the original owner from moving the downloaded content to physical media and then selling that - only one copy exists.  As long as only one licensed copy of a particular download exists, I don't really see the difference between it and physical media, (which can usually be just as easily copied), except for a bit of polycarbonate and a loss of a sale to middlemen and corporations, (which is all they're really interested in).

But it all seems to be pretty irrelevant anyway as the corporations got their way in the end: No, you don't own it: Court upholds EULAs, threatens digital resale

Guess I should have searched a bit further 

Going hypothetical for a moment, if you buy the software in the USA, (physical/downloaded), and then sell it in the EU - is it illegal ?
What about the other way, buy in EU, sell in USA ?

[Renegade]

I thought I remembered something about a court case involving the sale of secondhand software in the USA: Court smacks Autodesk, affirms right to sell used software

That case involved software originally sold on physical media, and the original physical media was being resold. The exact same copy that was originally purchased was resold. No reproductions were made. Once the physical ownership changed hands, there was still only 1 copy and the original owner no longer had it in his possession.

In the US, First Sale doctrine only applies to sales in which once you sell the item, you don't have it any more.

It doesn't work the same with digital downloads in the US because you can't transfer ownership of the exact original copy that you downloaded. Transfer of ownership of downloaded digital goods involves reproduction. You upload it to the buyer, and now there is the original file you downloaded, which you still have in your possession, and now the person you sold it to has a copy too, leaving you both in a position to be able to sell the file again and again and again, with the number of copies existing increasing with each sale. That's why First Sale doesn't apply.

I'll have to side with 4wd on this.

Yes. First sale DOES apply.

No. The software isn't sold.

But what does that mean? It means COPYRIGHT or PATENT.

But software companies aren't selling that. They are selling LICENSES. Big difference.

Once they sell you a license, you OWN that license. So yes. First sale does apply as you can sell your license because it belongs to you.

Let's not confuse the issue of copyright and licensing here.

But, getting around it is very easy. You simply give the software away for free, like a free trial/shareware/trialware/etc., but make certain that it doesn't work, or is limited, then you sell "activations" as a "service". You've already performed the service, and have no further obligation to perform the service again, so you get around "first sale" entirely.

Like I said above, there's more than one way to be a prick.