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Software is owned not licensed

US legal precedent
Wednesday, 7 October 2009, 09:38

THE BYZANTINE SOFTWARE licensing system in the US was dealt a blow by a federal court that denied Autodesk's bid to prevent the second-hand sale of its software.

According to Out Law, the company tried for years to convince a court that its software is merely licensed and not sold and that a customer therefore had no rights to sell it on.

The target of Autodesk's wrath was Timothy Vernor, who was selling legitimate copies of Autodesk software on Ebay.

Vernor's defence was that since he paid for the software he had the right to sell it on, and now the US District Court for the Western District of Washington has agreed with him.

The decision apparently was difficult as there were two cases that had set precedents and they clashed. The court decided that it was better to follow the earlier precedent, which was a dispute over the ownership of prints of Hollywood films sold to movie stars.

In that case film copies were explicitly only licensed, but in one case the agreement had transferred ownership of the print to the actress Vanessa Redgrave. In that case a court found that the studio did not have the right, as it did in other agreements, to demand the return of the print.

The judge in the Vernor case said that software agreements were similar enough to that film agreement for it to act as a precedent.

The ruling said that the Autodesk License is a hodgepodge of terms that, standing alone, support both a transfer of ownership and a mere licence.

Autodesk retains title to the 'Software and accompanying materials' but it has no right to regain possession of the software or the 'accompanying materials'.

In other words software companies have to be able to demand their software back in order to successfully claim that it is licensed and not purchased.

Autodesk claimed that Vernor's actions were likely to result in the creation and sale of illegal copies of its AutoCAD software.

However the court gave short shrift to Autodesk's attempt to use the threat of 'piracy' as an excuse for its actions.

It said that Autodesk's claim that Vernor was promoting software 'piracy' was unconvincing and his sales of AutoCAD were just as legal as Autodesk's own sales of the same packages.

A software thief would be just as likely to nick illegal copies of Vernor's software as they were likely to steal Autodesk's, the court said.

While the ruling will probably be appealed, if it is upheld then it could require changes to current US software licensing practices.

For software companies to claim that they are merely licensing their products they will have to actually demand the return of the software when the licence expires.

This might have a knock on effect on the music and film industries which have also been trying to adopt licensing models for flogging their content online. µ

 

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Comments
About Time

Common sense has entered a courtroom.

Amazing

posted by : Nero, 07 October 2009 Complain about this comment
They also have to get you to aggree before you pay.

Just demanding the software back at the end of the license won't help them - they also need you to agree to all terms before you pay.

If you visit a retail shop and buy software (or a computer with software pre-loaded) then at that stage you have bought and now own the software. You have not yet agreed to any licensing terms. There is normaly an EULA they would like you to agree to but there is no obligation for you to agree to this - if you click I agree then that is a voluntary agreement you are making.

Here's the interesting part - Software companies want you to think you have no right to the software if you don't agree to the EULA. THIS ISN'T TRUE. They've already sold you the software and you've paid for it without agreeing to any other contracts. It's yours.

If you've got any IT skills learn how to use Orca to remove the accept license step from an .msi file and you'll never have to agree to an EULA again. You've still paid for the software and are legally licenced to use it - you just would not have agreed to the volantary EULA.

Of course none of this applies if you're required to agree to a contract as part of the purchasing process.

posted by : Chris, 07 October 2009 Complain about this comment
Software still licensed

Software is still licensed. The artifact that you own is the software licence. That is very clear in the current copyright law, which considers software specifically. This case clarifies that the software licence can be transferred to a new owner without the previous permission of the copyright holder. Autodesk were trying to prevent resale of existing licences.

This could have an impact on OEM versions of Windows, and other Microsoft software, which are tied to the hardware that the software originally came with. Microsoft discounts OEM versions precisely because of this hardware tie, because you're supposed to buy a new OEM licence when you buy your next computer. Full retail versions are more expensive because they're transferrable.

Without agreeing to the EULA, you have NO RIGHT to use the software. Hacking around the presentation of the EULA probably violates the DMCA or other applicable law that deals with circumvention of copyright protection.

posted by : Mike Dimmick, 07 October 2009 Complain about this comment
@Mike Dimmick

What has circumvention of EULA to do with DMCA (you bought copy - it is not illegal and EULA is not copyright code), and how DMCA affects all other people outside USA (DMCA is valid only and O N L Y in USA) ????

posted by : LordEkim, 07 October 2009 Complain about this comment
Heading off to SCOTUS

It will be interesting to see what happens when this ends up before SCOTUS.

At this point, I have to agree with the District Court, in that Autodesk did not clearly establish that what you were buying was merely the license. And even if it were, the lack of a clear mechanism for return of the license to Autodesk, plus the terms that strongly infer, if not clearly state, transfer of ownership, means the Court came down on the legally valid side of the argument.

Sorry, Mike Dimmick, without the ability to review and consent to the EULA before paying, the EULA means nothing. You cannot retroactively establish a contract without the consent of both parties.

posted by : rich wargo, 07 October 2009 Complain about this comment
Both parties are wrong

Software is not kind of goods. but, Autodesk was wrong because the licensee is transferable. The worst of it, the court decision has unlogically manner in dealing this.

posted by : Dodge, 07 October 2009 Complain about this comment
Yeah for common sense

Maybe we can now use this to hit at the draconian DRM in PC games. I am referring to limited activations (rent-a-game). They are using the same ideology to say we really don't own the game even though we paid for it.

posted by : Regulas, 07 October 2009 Complain about this comment
Software is a product

Software is a product, just like all products it can be owned or rented and I am going to let anyone tell me what I can do or can not do with something own.

We customers were sleeping when they invented those accept or die contracts. How the hack can they endorse us things like that?

posted by : enginarc, 07 October 2009 Complain about this comment
precident..

I wonder- will this have any effect on the pystar vs apple case?

posted by : Scott, 07 October 2009 Complain about this comment
Licensing vs Ownership

If licenses turn out to be ownership, means that I could reverse-engineer my software as I please. I'll be only looking, right?

Also, I could make backups of it and those 'backups' must work.

posted by : mycelo, 07 October 2009 Complain about this comment
No to forget...

... that the provided EULA usually contain a clause stating that the actual EULA is subject to change without prior notice. That means it's fully possible that the text I get to read is not representative of the actual terms I'm supposed to accept.

I suppose it also means that I can change the terms to suit me better, just before accepting it... ;)

posted by : Olle P, 07 October 2009 Complain about this comment
That's not so good news...

Because if software company's need to have a way to take the software from you for it to be licensed, than I can already see a very dark future where software will work like games on Steam... as soon as your license expires, bye bye software.

Online activation/deactivation steam style on the way, you bet.

posted by : erick.mendes, 07 October 2009 Complain about this comment
Greed

"It's all greed" - Pennywise

posted by : nic, 07 October 2009 Complain about this comment
this is ONLY about the specific Autodesk license

The case was only about the specific license that Autodesk had in place when this particular customer bought this particular product. It is not the end of the SW license at all. Other sites have included legal analysis that indicated that this had no effect on SW beyond this specific license. It was widely acknowledged by the experts that the specific Autodesk license in question was an unmitigated mess and because of its vaguery it could be construed as a sale not a license.

posted by : billvert, 07 October 2009 Complain about this comment
Return Policy

An easier way to return unwanted software is long overdue. Think of all those copies of Windows that come bundled with a PC. I hope the court's decision makes it easier for people who only want the hardware, not the pre-installed junk. With cash back, of course.

posted by : User, 07 October 2009 Complain about this comment
@billvert

billvert, I see one fundamental flaw with the other analyzes offered on the web. None of the critics are licensed to practice law in any federal jurisdiction that I can find. I have been licensed in federal courts for 31 years and unlike desk lawyers have tried a substantial number of cases in federal court in those years both civil and criminal. Every one of the commentators ignores the most fundamental of law concerning ambiguous writings. The writer loses, ambiguity is interpreted in favor of the nonwriting party. This case is in the 9th Circuit which will be an automatic loss for Autodesk. The chances of the US Supreme Court taking this on writ of certiorari are slim since the fundamental rule of "if you wrote it you lose" is at least 400 years old.

The bigger problem for "license only" EULA's is the liability of the licensor for damages when the software "malfunctions " under the doctrine of commercial fitness. In the field of professional software, this would open Autodesk up to products liability suits. Bet they didn't think about that.

posted by : Ed H, 07 October 2009 Complain about this comment
ONLY in USA this abomination happens

I am a law graduate in Brazil and specializing in author rights and social function of property. Here MS and other US companies keep pushing their products as if here is the USA. In our law here the consumer has a preconceived advantage, due to his lack of power compared to a big company. There is a minimum contract stablished by the law that cannot be broken or refused even if the consumer says so. This includes the right of choosing and testing exactly what he desires to buy. Actually it is forbidden to sell "mated" products, as it is the case with OEM OS. Also, the licence to the use of a computer program is considered a mobile good. It can be sold or even given for free as long as the original user uninstalls it (of course), no matter what any contract says. One cannot simply write any clauses and force another to sign it. So most EULAS are simply illegal here and totally dis-considered.

posted by : Guilherme, 07 October 2009 Complain about this comment
Vampires!

But, how many times this software companies want us to pay their goodies?

They're Vampires!

After the invention of the user license, they'll move to the Limited-time license, with an expiring date to renew perpetually...

posted by : Mechano, 08 October 2009 Complain about this comment
Judges can't make law

Discussion of this shiii-case seems to suggest that judges can decide law. But judges CANNOT decide law, despite the fact that they believe they can.

Case law is BS, judges have no legal right to extend the ruling of one case to another. Period, end of story.

If a law on the books is vague or contradicts another law, then the law is void in that instance, in which case it should go to a jury. In theory, a judge's job is simply to figure out what the law says and apply it, which would mean it's a deterministic decision, not based on opinion. If there's more than one possible way to apply it, either rewrite the law or send it to a jury.

I pledge allegiance to the flag...and to the REPUBLIC for which it stands...

A republic is based on written law, a democracy is voted on. In my opinion, it is a horrible thing that people insist on calling us a democracy when we're nothing of the sort. We are a republic, and have been for more than 225 years.

posted by : Jason Goatcher, 08 October 2009 Complain about this comment
The Pledge

I pledge allegiance to the flag...and to the REPUBLIC for which it stands...

...one nation ABOVE god...
...with liberty and justice for the rich !

That old pledge needs upgraded just like they do to the constitution ,It's was written so long ago it's no longer true and only a brainwashing tool anyway.

posted by : Reality, 08 October 2009 Complain about this comment
Won't someone please think about the online activation?

So most all modern Autodesk software uses an online activation system which links in to a back-end database of registered sales from authorized Autodesk resellers.

If I now can legally buy a used copy of Autodesk software from Ebay I get legal possession of the box, manual, media etc. However in order to actually use the license I have go through the Autodesk online activation process. What if they simply refuse to issue me a new license as the product has already been activated on a different system?

My guess is Autodesk will point blank refuse to do this until or unless a judge orders them to under the conditions of yet another court case.

posted by : Aunty Dan, 09 October 2009 Complain about this comment
@Jason Goatcher

You seem to know a bit which is unusual. Judges have no power at all but neither do police! Weird as i've just posted about tax, so excuse the cut and paste ;)

I recommend researching this site very well and LEARN COMMON LAW!

http://www.tpuc.org/

In a more than likely quiet long nutshell for the lacking in ability to research and the plain lazy, Heres a not so short description of reasons why!

The UK went bankrupt in 1865 which it as been in ever since. It declared bankruptcy again in the 1920's which is the time they brought in the National insurance. and crucially, SOLD ALL THE GOLD RESERVE! Same as the US did in the 1930's, making the printed money worthless, as there is nothing of value backing the currency within both countries! What happens if you take a £20/$20 not to the bank of england or the federal bank respectively? Noting the the Federal Reserve is a PRIVATE company that BORROWS money to the US government at AN INTEREST! How can they pay back interest when there isn't enough in the system to pay the interest? YOU CAN'T! So enforcing the population as slaves to the system in an unattainable goal! All they will do is give you a new note! Before the sale of all the gold, It said, 'redeemable in GOLD'. Now it only as the value of the amount thats in the system, and they seem to print money off excessively making each note even less value even if there was a gold reserve! Wonder why there begging for phones/gold of late off you!!! National Insurance in the UK was brought in to cover the people of the country if they ever needed money for bills,food,clothing etc etc and couldn't afford. This means NI can be used to pay bills such as water/electric/sky/broadband. Really i hear you say? YES! But thats just the beginning. Due to the bankruptcy of 1865, no COMMON LAW (LAW of the land) as been able to be passed! What does this mean? All so called 'laws' created since then are statutes and acts. These are NOT LAW and only applicable if you AGREE TO THEM VERBALLY OR BY SIGNING YOUR NAME to which police 'officers' are trained. Not there fault, they think there doing right in a police state! No longer do police 'men and women' exist to serve and protect, WHICH IS THERE JOB! Police officers now which protect the people at the top! Police/courts etc are all PRIVATE COMPANIES which have to make money! Yes, thats right, they are CORPORATIONS and NOT public services. What does this mean? Well what do you see today, Taxes for just about everything to make £££ for the people at the top, the puppet masters (Bilderberg Group:http://en.wikipedia.org/wiki/Bilderberg_Group - Thats a different chapter!). Police officers enforce this!

So, Tax, in any form is up to you whether you want to pay! There is no LAW that says you have to pay it. UK or USA. Many IRS Agents in the US have left there jobs and stopped paying there taxes after they looked into the system to find there is nothing making them pay it! But this is just a taste of the unbelievable truth.

Statutes have to have a bond on them to stand up in court, meaning the creator has to be there if you request and put his bond on the line. Problem being there as not been one created for over 50 years, these people are DEAD! or on there last legs.....

60% of the population as to VOTE YES for a law to be passed in these times, Which NEVER happens, And same with employing police which also does not happen. A judge as to take an oath, Which is never done! What does this mean. Well, basically, every police office/man/woman/judge are NOT LAWFULLY what they say they are. They have NO power.

The more you dig, the more you find out but if your interested, DO your research and you will find unbelievable things, to the point where you will find this country is lawless! It truly is a free country if you know 'lawless' language and the right stuff.

You will get hassled for a bit and it will cause problems but after a bit they realize they have no power and will leave you alone for good cause they know they have no power! Meanwhile you can sue them BY LAW for entering your property without permission/Loss of earning or property and pretty much anything that infringes on you making a loss! Common law is pretty simple, Don't cause loss or harm to anyone! Thats pretty much it!

Birth certificate is signing your new born child over to the government and BRANDING IT! By this i mean Mr/Miss XXXX XXXXXXXXX(whatever) is a persona, and not you. You 'wear' it like you do a coat. Your name is your GIVEN name, and you have a FAMILY name. No one is Mr/Mrs/Miss etc, its false! No one as first and last name, Thats part of the persona. REMEMBER, GIVEN NAME, FAMILY NAME! Never agree to be your persona cause then you are agreeing to statutes and acts! You see, were lied to from the day were born, how are we meant to know? We seem to have the attitude that we know everything these days when we don't even know whats going on in front of our eyes!

AND DONT USE A LAWYER! The literal translation is representative of an imbecile! Are you an imbecile?

I've tried to cover a lot here without reference or nothing but if you really want to know whats going on, I'd start researching and looking into these things, The more people that have there eyes open, the faster we could move forward back on track and get rid of the Rockerfellows of this world!

There was many warnings of this back in 1800's with central banks and everything, But they were soon 'neutralized', if you get my drift!!!

posted by : freeman, 09 October 2009 Complain about this comment
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