Court Says Reselling Software Is Okay

from the good-news dept

Thu, May 22nd 2008 11:11am — Mike Masnick

Last year, we wrote about a case filed by an eBay seller against Autodesk, claiming the company unfairly prevented him from reselling used copies of Autodesk software that he had legally purchased. Basically, every time the guy listed Autodesk software, the company would send a DMCA takedown to eBay who would take it down. Each time, the guy would send a counter claim, which Autodesk would ignore, allowing the software to go back on the site. However, with so many takedown notices, eBay banned his account for abuse -- even though he successfully responded to each claim as being false. For that, he sued Autodesk. Autodesk moved to have the court dismiss the case claiming that the seller had no right of first sale because the software was "licensed" rather than sold. If that sounds like weak semantics, you've got a point... and it appears the court agrees with you. In denying Autodesk's request to dismiss the case, the court indicates that, even though the case law covering this issue often varies, it believes that the software has been sold, not licensed, and therefore the right of first sale does exist on Autodesk's software. The case should now proceed if Autodesk doesn't quickly show up with an offer to settle the case quietly (which it might). Assuming the case does go forward, it's going to be worth watching closely, as it will have important ramifications for the right to resell software you purchased.

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Filed Under: auctions, autocad, dmca, right of first sale
Companies: autodesk, ebay

41 Comments

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Steve R. (profile), 22 May 2008 @ 12:10pm

Autodesk will Weasel Out
Unfortunately, Autodesk will probably be able to have an "under-the-table" settlement which will allow the perpetuation through FUD that the law is on their side.

Again, a major concern that is not being highlighted is that these companies take unilateral action as if due process does not exist and can do so with impunity.
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Buzz, 22 May 2008 @ 12:27pm

ARGH!
Software companies' attitudes continue to worsen with each passing day. First, customers turned to piracy to try-before-you-buy (usually with games). Software providers don't like that, so they started prosecuting people. So, here we have someone who bought the software, used it, decided he didn't want it anymore, and wants to recoup some of the money he spent on it. He does what anyone else would do: sell it someone else who wants it. What does the software company respond with? "Sorry, but once you buy it, you're stuck with it." License or not, that is just bad business ethics. If we have to spend absurd amounts of money on software, we definitely reserve the right to sell it off.

The company didn't LOSE any money. They're being greedy by forcing someone else to buy a new copy. The first guy paid for it, and now he is simply transferring the license to someone else.

While we're on the topic of licensing and software protections, if I have a choice between a $10 copy (locked down with various serial keys, online validation, etc.) and a $60 copy (free of any protections), I'd buy the $60 version. No, I wouldn't share it with anyone (despite what software companies assume about all their customers). I'd be grateful that I can run the program 10 years from now even if the company's validation servers are gone.
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Joel Coehoorn, 22 May 2008 @ 1:06pm

Semantics again
I agree with the outcome, but not necessarily the reasoning. The _software_ wasn't sold. That would imply full distribution rights. But a _license_ was sold, along with media containing a copy of the software. So, in that sense, the software was licensed. Now I am not a lawyer, but it seems to me that the right of first sale should still apply to the sale of the license and media.
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Jaqenn, 22 May 2008 @ 1:23pm

Bad Writeup?
You said that the court said that reselling software is okay. Is that what they actually said?

It looks to me like they said that reselling software is an ill-defined area of law, so the case needs to go forward instead of being dismissed.

Or am I missing something?
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www.custompcmax.com, 22 May 2008 @ 1:24pm

If you pay for it, you should be able to sell it.
My thoughts are, if you pay for the software, you have the right to resell it. I understand their worries and they don't want to lose out on a second sale because consumer one sold theirs. But, you can't prevent someone from rightfully selling something they purchased. Sometimes, people get a piece of software and find out that they can't use it or don't like it. These companies are going after the wrong people. They should focus on the people that use illegal version of software, and leave the paying customers alone.
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Anonymous Coward, 22 May 2008 @ 1:28pm

Re: Autodesk will Weasel Out
Steve R. said - "Again, a major concern that is not being highlighted is that these companies take unilateral action as if due process does not exist and can do so with impunity."

And you think they don't?? If you haven't already, just watch the news here - it's pretty obvious they do whatever the hell they feel like. When, and IF, they get busted, they just have the laws changed, or congress grant immunity and there you have it. They are free to do whatever they choose, whenever they want - you as the consumer just get to take it, so bend over and get ready!
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Dave, 22 May 2008 @ 2:12pm

Software re-sale restrictions are old news
I can remember in the Windows DOS/Windows 3.1 days buying a copy of Quarterdeck's Desqview multitasking dos system. That license prohibited the transfer of ownership without permission. I went to the trouble of writing a letter and obtaining the necessary license transfer.

Adobe's just following software traditions handed down from the big iron era. Nobody running a mainframe or minicomputer would have ever *considered* selling their software license.
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Jane DuBois McCarthy, 22 May 2008 @ 2:14pm

Reselling software
Other than the obvious -- that the EULA the enduser agreed to states clearly that one cannot resell the software -- there are other things to consider when debating the legality of reselling software. First: they used the software and most likely created with it. This is where software is so different - it is not an item like a sweater or a bike. They "used" the software - that is what the license is for. They did not "own" the software. Second: why are they selling it? did they purchase a new version of the software as an upgrade? if so they probably received a price break from Autodesk for being a loyal customer. The price break is based on them still being in possession of the older version. Third: we haven't even touched on tech support. Is the person who would buy the resold software supposed to be able to call tech support if they have a problem? is Autodesk supposed to eat that cost?
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Blitze, 22 May 2008 @ 2:18pm

Well if i buy a car and resell it that is perfectly fine because i no longer have the car. But if i install the program and sell the disk i now have the program and the cash from selling off the disk.

Thus the company is worried that i could buy 1 disk.. burn it 27 times and sell it 27 times and they no longer have 27 customers. Although i understand this person was selling the real disk you can burn a disk and put a fake copy in it and simply tell the tale that the dog ate the box.
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Qubit, 22 May 2008 @ 2:29pm

Yes, this sounds very much like the golden handcuffs DRM lock-in you get with the Steam game content delivery platform.

I use it and it works very well. You purchase your game online, download it and its managed and updated by the Steam client software on your PC pretty much flawlessly, eliminating the hassle of patch maintenance for multiple games.

But I can't sell my games. At all.

They have disabled the system for transferring that game to another Steam account, except under certain circumstances, where you can so-called "gift" it if you have bought a second copy as part of a package deal.

Using the logic of this article, this restriction should be illegal and I agree. I'm surprised that no-one has raised this issue on Steam.
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bill parker, 22 May 2008 @ 2:38pm

Temporary - This does not matter
There have been 20 major changes in software distribution is the short 15 year (mainstream) history of our PCs. Media is dead/dying and this will mute point in just a couple of years once we officially 'lease' our software and it's only available while our 'subscriptions' are current. Physical Media and Intellectual Property cannot exist together, their only hope is to complicate the reproduction/redistrobution process but it cannot be stopped.
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ehrichweiss, 22 May 2008 @ 2:48pm

Re: Semantics again
No, you're confusing ideas. One can sell a copy of the software without selling the distribution rights. What you need to consider is that there are multiple levels of rights that can be sold and selling one does not imply selling the others. Licensing is a completely different game.

Silicon Graphics makes you sign a contract stating that you are buying a license to the software and that it cannot be resold. The contract is binding and you truly cannot transfer the license without facing civil action.
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ehrichweiss, 22 May 2008 @ 2:49pm

Re: If you pay for it, you should be able to sell it.
My thoughts are: custompcmax.com=SPAM!!
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ehrichweiss, 22 May 2008 @ 2:53pm

Re: Reselling software
The problem with your first point is that shrink wrap licenses are typically worth about as much as the paper they are written on and obviously the courts were informed of the EULA's existence by Autodesk so they likely thought the same.

Another point: he bought the software(several copies, unopened I assume) at an auction and Autodesk wouldn't let him resell them. Now do you see the problem with your assertions?
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Anonymous Coward, 22 May 2008 @ 2:57pm

Re: Reselling software
First: they used the software and most likely created with it. This is where software is so different - it is not an item like a sweater or a bike.
No, it's more like a hammer. A tool that can be used to create things. Just because something is a tool should not make it illegal to resell it.

Second: why are they selling it? did they purchase a new version of the software as an upgrade? if so they probably received a price break from Autodesk for being a loyal customer. The price break is based on them still being in possession of the older version.
Now you're just speculating.

Third: we haven't even touched on tech support. Is the person who would buy the resold software supposed to be able to call tech support if they have a problem? is Autodesk supposed to eat that cost?
Enough with the straw men already. The court did not say that Autodesk had to provide free support to the new owner.
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ehrichweiss, 22 May 2008 @ 2:58pm

Re:
That's the worry except these were apparently unopened copies that had been purchased at an auction and Autodesk was unfairly preventing him from reselling legitimate copies.

It happens. I had Dish Network cancel 2 auctions where I was selling one of their receivers, legally purchased. It was a legit sale and they attempted to claim some form of trademark or DMCA violation, which they couldn't prove if they tried. So I openly encourage people to pirate their signal, or move to DirecTV. I have cable so I don't care and I sold my receiver elsewhere.

The cult of scientology is doing the same thing with used "e-meters" or some such crap, I hear.
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ehrichweiss, 22 May 2008 @ 3:01pm

Re:
If they actually *license* the games, then Steam is doing nothing wrong. You need to do some research to tell the difference since almost all software companies will tell you that they're selling the license, not software even if that's not the case.
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Jane DuBois McCarthy, 22 May 2008 @ 3:06pm

Reselling software
Sorry i went on and on. In the end if you bought a "license to use" the software that is what you got. The fact that you still have the media it was delivered on originally does not give you the right to resell it. Get it?
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Ben, 22 May 2008 @ 3:15pm

Is part of this not eBays fault?
I can only imagine that part of this mess is tied to eBays poor management of posting control. I have been selling on eBay for 2 years and I'm just about fed up with the ways the run their quality control.
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crazyburns, 22 May 2008 @ 3:22pm

Re: Reselling software
Well first off, no one reads a EULA and just because it says that a user cannot resell the software does not make it legally binding. If the EULA said you must give your first child to them would you listen?

"First: they used the software and most likely created with it. This is where software is so different - it is not an item like a sweater or a bike. They "used" the software - that is what the license is for. They did not "own" the software."

By this same statement, if I buy hammer I can create (or build) a house with it. I "used" the hammer. So does this mean I can't sell the hammer? The only real difference between software and physical items is that software (and all digital content) can be cloned endlessly. The difference is that you can't modify the original program and sell it as your own, wheras if I buy a bike I can repaint it and put a different seat on it and do whatever I like to it and because it is my bike the manufacturer can't do a thing about that. Software is an Intelectual Property, so its really just a collection of ideas written down, like a book, which can be resold, but if you copy the text from the book and try and sell that you are violating copyright.

Your second point does make sense about upgrade licensing. Typically, though to reinstall the upgrade copy you still need the original copy.

"Third: we haven't even touched on tech support. Is the person who would buy the resold software supposed to be able to call tech support if they have a problem? is Autodesk supposed to eat that cost?"

Why would Autodesk have to eat the cost? They were already paid for the copy that is being supported. The original purchaser no loger needs the support, they sold the software so the support transfers with the license.
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crazyburns, 22 May 2008 @ 3:28pm

Re: Temporary - This does not matter
We are already on that path. AV software in particular is a subscription based system.
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crazyburns, 22 May 2008 @ 3:32pm

Re: Re:
The point is that you own the license and you should be able to sell the license if you like. That is why this case is so important. It is not about selling the physical disk it is about selling the license for the software.
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Frank, 22 May 2008 @ 3:41pm

Reselling Software
If I purchase a book and learn something from it, I can still sell it. Copyrighted or not.

I've read texbooks and have told people about the book and what's in it, and made drawings of pictures in them, and quoted text from them. Then I sell them.

If I spend money on an item, and it's in my house, it's mine, as long as I haven't signed a lease agreement. If I want to sell it, the manufacturer of my sofa, car, book, stove, or software will have a difficult time keeping me from doing it.

This whole idea brings up another point. If I buy some software that I no longer need, can I donate it to my library?
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Joe, 22 May 2008 @ 4:05pm

Back to nature
I could personally care less. I'll just quit using "stuff" and take a nice walk out in the woods or around the block for entertainment. Let corporate greed eat itself as well as the sheep that follow. Unfortunately, we (the government) have eradicated a free market society in the US and globally by allowing our legal systems to be controlled by self interest fortune 500 corporations and politicians. The US sold out a long time ago and is quickly approaching 3rd world status due to the populous, judicial, and political systems allowing itself to be controlled and raped by corporate philosophy. It's not even true capitalism any longer as little companies and startups cannot afford to get their foot in the door since laws were written with a one sided slant to the monopolies that hide behind and use the broken legal system to their advantage.
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Rose M. Welch, 22 May 2008 @ 5:03pm

Sillt, corporations...
I have a used copy of Photoshop 4.0. I paid next to nothing for it. I would never pay what they want sell it for in-store, because it's not that vaulable to me.

I did pay full-price for the upgrade to 7.0 when it came out, because I liked the program so much. I never would have done that if I hadn't purchased the use copy for cheap. It wasn't even a matter if being sure that I liked it; it was just too much.

Guess they don't want my business after all...
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Rekrul, 22 May 2008 @ 7:34pm

I use it and it works very well. You purchase your game online, download it and its managed and updated by the Steam client software on your PC pretty much flawlessly, eliminating the hassle of patch maintenance for multiple games.

But I can't sell my games. At all.

You also can't re-install them if Valve should happen to go belly-up, or get bought by another company who decides to not support activation of older games.

Can you even burn the games/patches you download to CD/DVD so that you don't have to re-download them if you later want to re-install them?

I could personally care less.

How much less could you care? And doesn't that mean that you do care now, since you could care less?
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Chiropetra, 22 May 2008 @ 7:38pm

Re: Reselling software
You're assuming what you paid for was a genuine license and not a sale in disguise.

The problem with shrink-wrapped software is that it's not at all clear whether the transaction meets the legal criteria for a license rather than a sale.

I imagine the court's ruling is rather informative on the issues.
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Anonymous Coward, 22 May 2008 @ 8:41pm

Re: Reselling software
The courts seem to disagree with you and I think they may have a little more authority. Do you get it?
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FenderBender, 22 May 2008 @ 9:27pm

Re: Reselling software
No, but they could easily do what other software companies are doing: charge a nominal fee for the license transfer. That allows them to make a couple of bucks from a copy of the product that would otherwise just be collecting dust and not doing anyone any good.
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Anonymous Coward, 23 May 2008 @ 5:58am

Re: Re: If you pay for it, you should be able to sell it.
Hey, at least he took it out of his post content. Every time you respond to him you let him know you noticed; you're just encouraging him.
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Anonymous Coward, 23 May 2008 @ 6:05am

Re: Re: Re:
A license, as I under stand it, is more of a contractual thing: you can't (?) sell a contract. But it's notable that the legal status of EULAs is in question. The point generally being that just because they tell you something doesn't make it true or legally binding.
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Anonymous Coward, 23 May 2008 @ 6:08am

Re: Reselling Software
as long as I haven't signed a lease agreement

EULAs want to dispute that. "By reading this sentence, you waive all rights." No-signature-needed contract. Innit great?
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Anonymous Coward, 23 May 2008 @ 6:10am

Re:
I could personally care less.

That's an often misused corruption of "I personally couldn't care less." Like most corruptions, it doesn't nearly say what they mean.
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pegr, 23 May 2008 @ 11:02am

Why do people keep repeating this fiction?
You don't own a license. A license is a contract with the vendor. Unless you sign a contract, there is no license. One does not "own" a license. This is a fiction propped up by years of meaningless EULAs bound within software packages.

You can, however, own a copy of a copyrighted work. Apart from the restrictions imposed by copyright law (title 17, kids), you can do anything you want with the legal copy that you own. Selling your legal copy to another is legal and does not require the approval of the copyright holder.

About EULAs: It's a sale and not a license if it looks like a sale. Go to Best Buy and "purchase" some software. That's a sale. It makes no difference that there is a slip of paper in the box that says otherwise.

Did you pay sales tax? States do not charge sales tax on renumeration that changes hands within the terms of a contract (license). If you paid sales tax, it's a sale. Ignore the EULA.
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Michael Johnson, 24 May 2008 @ 9:53pm

Where would it stop?
I suppose that if the Vender is willing to give you a license that would allow you to run on any machine then you should have the right to sell it. On the other hand I'd like to see someone sell HP's Load Runner or Borland's Silk Performer. Those packages are between 45K and 2 million. Of course you wouldn't get a new license from them but what if a company were to sell the software and the license servers they ran on. This in itself would open a quick and dirty legal battle which I'm sure the Venders would win.
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db, 21 Jul 2008 @ 8:02am

re: Where would it stop? by Michael Johnson
"Those packages are between 45K and 2 million." and I'm sure they are sold with an actual contract, one that was negotiated, not a EULA, which is one sided.
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RM, 21 Jul 2008 @ 10:03am

Subscription software
It won't be long before lots more software will require an active subscription to run, verified at each launch or at regular intervals. Most, if not all, antivirus products do this already, and Microsoft is well on its way with mandatory activation, the next step is simply flipping the "switch" in the software that tells it to check on every launch and if it doesn't receive a response from a Microsoft server that the user is still paying for his license, a pretty little popup window appears telling him he can't use the software anymore unless he goes to the website and renews his subscription. I suspect MS will activate this in the next couple of versions of Windows and Office products.

This will be the technical end-all and be-all of software license versus purchase discussion. At the point that your software doesn't work unless you're paying for a subscription, there won't be any doubt.

As for this case, though, I would defer to the EULA in the Autodesk packaging. If that EULA specifically states that he purchased a license to use the software and doesn't have a right to resell it, then he doesn't. If the wording is ambiguous and/or doesn't outline his rights clearly, then he has a right to challenge the company. It's already laid out for him, and if it's not, then that's Autodesk's fault, and they need eat this one and begin a process to clarify the wording of their EULA in future versions and issue an update or patch to current software that changes the EULA within the software and requires the user to accept it to continue using the software after the patch.
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RM, 21 Jul 2008 @ 10:05am

Re: Subscription software
That said, I agree with pegr.
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laynie, 20 Aug 2008 @ 12:04pm

I heard that you can lots of money reselling software. Is that true? I found a site webdesigntools4cheap.com and they claim you can make money reselling the software. But I don't get how you can profit?
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Az, 12 May 2009 @ 7:42am

If you buy BMW you will not own BMW neither its engine... It is a game: do you own BMW? Or only a machine produced by them... with license to use it...
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GingerB4, 24 Sep 2019 @ 9:14pm

Re: Back to nature
Back to nature I'm with you. I was thinking this same exact thing. Trying to clear out old software and thought I'd search where to sell it online. It's vintage Adobe. I paid a hefty price to OWN it. That was always the draw to Apple in the past. 1996
Now I have a monthly subscription that outruns all my old, out of date systems, etc... I just wonder if someone out there can use it on an old nostalgic machine perhaps and bless me with a small return from the sale. I'll never get back out of it what I originally paid. It was steep! Just like everything they sell to creators and artists. It's practically useless to invest in the products I need to create with because the price is so high that I will probably never recover my initial and ongoing investment simply trying to keep up with the upgrades. It's like a car depreciation driving it off the lot. Pure robbery anymore. I'm going back to watercolors...a lot more enjoyable and not as expensive...eh...whatever.
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