2. The facts in this case are not insignificant: An Autodesk customer upgraded its installation, paying a heavily-discounted price (~87% discount) for copies of the new version. It then sold its copies of the old version to the "reseller," along with a handwritten copy of the license codes. See the court's recital of the facts at PDF page 6 of http://www.ca9.uscourts.gov/datastore/opinions/2010/09/10/09.... I wonder how many HN readers would want their customers doing that?
The facts of the case are that software is being Sold, with a capital S, at retail stores in exactly the same manner as all sorts of goods are sold, and that in some fine print which is totally unavailable to the purchaser at the time of purchase, the software creator is then retroactively revising the agreement to be only a time-limited, restricted lease rather than a sale..... and the courts are buying that argument.
I certainly understand your point, but 25-plus years of "custom and usage" have made it hard to argue convincingly that purchasers don't know there's a click-wrap EULA. [EDIT: Enforceability of the EULA is usually predicated on the purchaser's having a reasonable period, usually 10 days or so, in which to return the software and get a refund if the EULA's terms aren't acceptable.]
The danger of the "Sold, not leased" approach is that vendors likely would stop offering such steep discounts for upgrades. Getting an upgrade would be be like buying a car: You want the new model, you pay the new-model price; and sure, by all means do whatever you like with your old model.
Car dealers usually take trade-ins. The upgrade model is essentially equivalent, but might need to be tweaked in a legal/technical sense. It would be more ethical than clickwrap agreements that could contain anything.
Agreed - one can't really express a naive ignorance of such matters at the same time as profitably reselling software whose value depends on limited availability and high pricing.
Of course, it might turn out to be a blessing in disguise; if manufacturers found customers indifferent to small upgrades at full price, they might release new versions less often but include more significant improvements than is usual at present.
Technology exists to invalidate the old license so this scenario wouldn't be possible. Autodesk would simply null the old key when an upgrade is purchased based on it.
Logically, book vendors could impose similar restrictions with similar language and achieve the same result viz. circumvent the first sale doctrine.
There's a question: would anyone buy such a book? If you were offered identical books, one you could resell and one you couldn't but it was half the price - which would you buy?
I don't know the legal history of the first sale doctrine, but I assume it's mostly based on public policy, and to support things that people were already doing: reselling, lending etc. An interesting data point is that software in the form of video games is regularly resold and lent.
IIRC, a distinguishing feature of the autodesk software in this case is that it is very high-end commercial software, and thus not a consumer product. Buyers and sellers in business transactions are generally assumed by the courts to know what they're doing, and so the courts tend not to intervene with whatever bargain they've struck. That is: this is likely inapplicable to consumer software like video games.
WRT your question about buying a book for half price that you can't resell it's been going on for a little while now with college textbooks.
Case in point: my accounting textbook (a new edition) comes in three versions:
a $200 hardback book which can easily be resold at the end of the semester like any other book
a $120 unbound version that is three hole punched (so you can put it in a binder) but that no bookstore will buy at the end of the year, making it hard to sell
a $40 e-book that you can load from virtually any device (I believe that there is a iPad app even) but the e-book is impossible to resell thanks to the magic of DRM.
Based on my experience in the class there is a about even spread among the three.
Well, they do draw a distinction between first sale by an owner of a copy, and sale by a licensee.
You buy a book, generally there are no preconditions on your opening it, whether in the store or at home. So since there are no apparent constraints, there's no scope for an agreement to exist between you and the publisher.
But if I publish 'Secret strategies of ____ industry leaders' for $1000, and require prospective purchasers to agree not to distribute their copy for 5 years before I accept their order (many industries have such expensive trade publications), that's very different from a regular book purchase - you don't get the information until you've acknowledged the conditions of sale, so it's a lot easier to say I only licensed that readership of that copy.
I don't like this decision at all, * but the Court is not just rewriting things on a whim - rather, it addresses specific holdings in other cases about whether a transfer was a grant of license or a sale, and relies on those to conclude Autodesk issued a limited license and was entitled to enforce the agreements that underpinned it.
* Indeed, the court doesn't sound too thrilled about the ramifications either, probably because they judges foresee an avalanche of tediously similar cases as a direct consequence of their holding.
>You buy a book, generally there are no preconditions on your opening it, whether in the store or at home. So since there are no apparent constraints, there's no scope for an agreement to exist between you and the publisher.
So book publishers need to add a wrapper license and some plastic wrap and can then sue anyone selling second hand books. Hoorah for capitalism over common sense.
This is huge. A US court decision clarifying that companies can disclaim there product from being a product and instead turn it into a license for use - making resale tortuous, for example.
With the increasing ubiquity of "online activation", the legal status of the first sale doctrine is of decreasing importance, anyway. There is a satisfying (if not practical) way to fix this problem: require that all such commercial licenses, sales, and contracts be between transferable entities. Anytime you have contracts between what are effectively anonymous parties, where the particular individuals are not essential to the transaction, require that the roles in the contract be transferable by whomever owns the rights of that role. In other words, we could fix this problem with a capability based society.
No problem. My copy of Autocad is owned by XYZ-software installation inc. A wholly owned subsidiary whose only asset is a copy of Autocad, I can sell the company to anyone I want - the license is never transferred.
The more I think about this, the more it seems like the old email signature "by reading this, you owe me a million dollars" is actually enforceable.
In the US, nobody has any obligation to pay me a million dollars. Similarly, a copyright holder has no right to regulate what happens to their CD-ROM after they legally sell it to someone.
But the court ruled that a piece of paper included with the CD-ROM that was not required to fully use that CD gave Autodesk some new rights and created the obligation for the original purchaser to ask Autodesk for permission to perform an otherwise-legal activity, selling the disk. So it follows that a little message that you do read at the end of my emails should be equally enforceable.
Actually, I think this decision is on its way to reversal.
Ok, I'm not selling the software I'm selling the license. Or, I'm selling the media and packaging not software, no way.
I'm sure it's not the case but more absurd things are held up regularly. Just need expensive lawyers to argue the point with a straight face and earnest demeanor.
Couldn't you just sell "a bunch of shiny plastic discs that may or may not have software on them" and not run into this issue? I'm assuming these discs were printed by Autodesk. Copyright doesn't apply if you're not making a copy of anything, right?
"By endorsing this check you agree that all previous and future licenses sold by Autodesk to any individual, business or other entity afford licensee all rights and privileges under the first sale doctrine..."
It seems like buying direct via check might be able to cause all kinds of problems. Seeing as how language clearly matters more than common sense.
That would only work for sales by Autodesk directly to the customer, where Autodesk actually cashed the check.
Most companies' accounts-receivables clerks, however, are trained to look for that kind of endorsement language on payment checks.
Chances are that Autodesk, upon receiving a check like that, would return the check and take whatever action it deemed appropriate for a past-due invoice.
2. The facts in this case are not insignificant: An Autodesk customer upgraded its installation, paying a heavily-discounted price (~87% discount) for copies of the new version. It then sold its copies of the old version to the "reseller," along with a handwritten copy of the license codes. See the court's recital of the facts at PDF page 6 of http://www.ca9.uscourts.gov/datastore/opinions/2010/09/10/09.... I wonder how many HN readers would want their customers doing that?