Directions in the first-sale doctrine
Earlier this month, a federal appeals court ruling recast the notion of ownership of books, movies, music, and software. The 9th Circuit Court, in ruling in the appeal of Vernor v. Autodesk, Inc., reversed the first-sale doctrine ruling earlier reached by a district court.
Under first-sale, copyright holders give up the right to control the distribution of copies of their works after the initial first sale. Autodesk claimed that copies of its software were licensed, not sold, to the original parties – so the first-sale doctrine did not apply. Since the first purchaser of the software did not own it, they did not have the right to resell it.
It really comes down to what’s written in what Microsoft and other software companies call the EULA, or End User License Agreement. If the EULA says you own the software, you have the right to sell it. Most EULAs no longer say you own the software; rather that you are licensed to use it. Now the exact terms of a EULA will vary from vendor to vendor, and from one version of software to the next. A EULA for Windows XP has different wording than a EULA for Windows 7. And OEM EULAs are often different from the EULA for software bought off the shelf, which again will differ from a EULA with a volume-licensed product.
But generally speaking, over the years software vendors have tightened up the wording in their EULAs, and the license agreement will say you are licensed to use the software, not that you own it.
When you install software, you are asked if you “agree to the license terms.” If you don’t agree, you don’t get to install the software. But before you just mark that checkbox, you may want to read what it says, because you will be bound by it. Pleading ignorance generally doesn’t go over well in court.
The terms aren’t meant to be nefarious, rather they are there to protect the copyright owners who have invested time and resources developing their product.
The bottom line? Check the license agreement before you try to resell something you don’t have a license agreement to sell!
