back to article Software re-sale restricted by US Court of Appeals

Software company Autodesk can stop a man from re-selling second-hand copies of its software because the programs are licensed to users, not owned by them, a US appeals court has ruled. Software producers who clearly impose restrictions on buyers and make it clear that buyers are only licensing material rather than buying it …

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  1. JaitcH
    FAIL

    Sorry, Beak, What I buy, I own

    Apart from not being subject to U.S. law, whatever I buy, I own.

    Nothing on my software says I am renting it, a principle I understand as I have rented vehicles and tools. The transaction is recorded on a form entitled Rental Agreement. The terms of the rental agreement usually state the longer I use whatever is the subject of the Rental Agreement will cost me.

    When I give money over for software I get a receipt, there is no rental agreement. In fact the receipt I get for handing over money for software is no more different, other than the figures, for a bar of chocolate or a book. Therefore it must be a sale.

    This is why I would never buy a Lemon 4 (or 3 or 2) as Job's gives me the impression he is actually only lending me the device as I don't have total control over it.

    1. Anonymous Coward
      Anonymous Coward

      No title req'd.

      I don't suppose anyone know the stance of UK law is on such a issue?

      Has it ever been tested?

      1. Dazed and Confused Silver badge

        At least one case has gone in favour of the customer

        I know that way back in the 80s DEC took this issue to caught about VMS licenses. They were trying to block the sale of second hand VAXes by universities. Without a VMS license the box was basically useless (sure you could run BSD Unix but most people ran VMS).

        They pointed out that the license couldn't be re-sold.

        The judge didn't agree and allowed the sale.

        Germany also allows the sale of second hand software. This has been covered on El Reg.

        The UK case pre-dates El Reg, even as an an email circular. I read it in either Computer Weekly or Computing.

    2. Test Man
      FAIL

      FAIL

      I completely agreed with you up till your iPhone "comment". I'm amazed that someone could somehow crowbar an iPhone comment into something that has nothing to do with iPhone, therefore your credibility has been shot to pieces.

    3. Anonymous Coward
      Thumb Up

      Thanks for letting us know...

      ...that this is really a story about Steve Jobs!

    4. Anonymous Coward
      FAIL

      You cannot help yourself.

      Read the damned licenses. You do not own the software. this is true of OSS licenses too. You are not renting it either. You are purchasing a **license** to use the software, and if you buy the physical media, it often comes with a printed user manual too. This isn't hard to understand.

      "When I give money over for software I get a receipt, there is no rental agreement." And when you install the software you have to agree to a license. This license agreement is a form of contract between you and the developer or publisher of the software. Next time, before installing the software, read the license. Seriously, you might learn something.

      As for the 'Lemon' comments. It's old mate. Move on. We all know that you don't like Apple (not liking a business in itself is quite childish) and you are getting really boring.

      1. Tempest
        Alert

        My software doesn't have EULA's

        It's removed by the copy shops I buy my software from. In fact some of the software was sold to the Chinese market and most everything other than the program - set up in English - is in Chinese so they don't mean much to me, either.

        Since restrictive clauses can't be read until after purchase, and opening the package makes them invalid for return, I would not feel constrained by them.

        Why are you so afraid of using your handle?

      2. Anonymous Coward
        Anonymous Coward

        Problem....

        This is where things start going awry.

        I am not asked to sign the 'agreement' before I buy. I actually only get to read said agreement AFTER I have handed over my money.

        To add insult to injury, once I have opened the 'original packaging', not only have I accepted said 'agreement' which Is INSIDE the packaging, but upon rejecting it, I cannot take it back to the store for a refund because it is not in its 'original, unopened packaging'.

        Unfortunately, i do not have the resources to take the manufacturers to task over this in a court of law.

      3. Anonymous Coward
        Anonymous Coward

        In the U.S.

        Those licenses aren't entirely legal in what they prohibit. You can modify or change the code, but it would be like a car... you've lost your warranty and probably any right to compensation for loss depending on what you've done. You couldn't sell copies or modified versions, but you can sell the original, hopefully with the documentation and within U.S. export control policies.

        If the company was paying to use that version of the software for a specified time, which is something the company I work for does, then it was a rental the guy had no business in selling. If he had gotten it from the store and turned around and sold it online, then I doubt the court would have sided with the software company. You may not own the software, but you own the right to use it as long as you retain the original file, be it on a cd, disk, flash drive or download to an HDD. I don't own the Civilization 2 software, but I own the disk and I can re-sell that cd on the condition that I don't retain the game on my computer.

    5. Anonymous Coward
      Unhappy

      You'll be a rent boy soon...!

      "Nothing on my software says I am renting it..."

      Not at the moment. But by next week every software vendor will have reprinted their terms & conditions to take account of this decision.

    6. Steven Knox Silver badge
      Boffin

      Leasing?

      Great argument that software is (generally) not rented. Pity it's completely irrelevant.

      Licensing (pehaps you read 'leasing'?) is not renting. Renting is temporally-limited use of property with no ownership transfer. Licensing is rights-limited use of property with no ownership transfer. Licenses may include a time limit, rentals may include rights limits, but the primary limitation on a rental is time, and the primary limitation on a license is rights.

      "When I give money over for software I get a receipt, there is no rental agreement."

      No, but there is a license agreement. If you don't see it, it's probably inside the box. If it's not a separate piece of paper, it's probably on the CD or DVD or whatever medium the software is stored on.

      When you "buy" software from a store, you're paying for the right to enter the license. You can, if you so desire, choose not to enter the license by following the return instructions usually included with the software. You might even get a refund.

    7. Marcus Aurelius
      Flame

      Autodesk is not a EULA decision

      I just noticed an interesting post by PJ on Groklaw:

      The problem with Autodesk software, in this fact pattern,

      is that there was no EULA. There was a contract between

      Autodesk and the folks Vernor got his copies from, and

      that contract, or license agreement, specifically said

      that it was a license deal, not a sale, and that the folks

      had no right to sell to anybody.

      The URL is (breathe deeply);

      http://www.groklaw.net/comment.php?mode=display&sid=201009101658045&title=Vernor%20v.%20AutoDesk%20-%20Vacated%20%28first%20sale%29%20and%20remanded%20%28copyright%20misuse%29&type=article&order=&hideanonymous=0&pid=874510#c874529

    8. Doug Glass
      Go

      RTFL

      Read the license you agreed to. If it says you don't own it, and you agreed to the, thenguess what? You don't own it. Personal whims aside, you really need to read and understand what you agree to.

      1. Anonymous Coward
        Anonymous Coward

        You're correct but it doesn't matter

        Yepp, it says precisely that on the license. That being said, it doesn't matter one bit.

        I paid for it, i own it and i'll sell it as i see fit -- perhaps in a manner that won't draw the company's attention, but the point remains the same.

        If the company wants to prevent me from selling it to someone else, all they have to do is implement a system somewhat like Steam that requires the purchase of a new serial number (or license, if you will).

        If not, screw'em.

      2. Davidoff
        FAIL

        Laymen and their (overly simple) understanding of the law

        I think you should probably try to understand the current law a bit better, but as the responses show you're not alone with this.

        FYI: most software purchases by consumers are *sales*, no *licensing* or anything like that. Yes, software vendors like to talk about licensing and stuff and how they just provide a right to use, but in the majority of cases where software is purchased this is irrelevant. If you go to a shop and buy say a copy of Windows, there is no legal contract (and no legal obligations beyond what the current law dictates, i.e. re copyright) between the buyer and the manufacturer. The only contract is between the seller (the shop) and the buyer, and the object of sale is a cardboard box with a DVD with software on it, a product key sticker, and some paper. The EULAs (MS term for their "licensing agreement") are irrelevant because they are not part of the contract (as they are hidden in the box and can't be recognized by all parties and therefore can never become part of the contract) and because there is no legal relation between the buyer and the manufacturer. However, this is not true for licensing contracts (which specifically state at the time they are closed that its about licensing, not purchasing), something which would apply to the case discussed in the article.

        So yes, unless you specifically agree to a licensing contract the majority of software sales are just that - sales. There is no licensing involved, and what the "licensing agreement" in the box says is highly irrelevant.

        1. beerandbiscuits

          @ Davidoff

          A nice enough summation of the general law on contract in this area, but there are exceptions. If you buy a ticket for e.g. a railway journey, it is subject to the rules of carriage, even though you may not have seen them. The courts will create new exceptions if they are needed, and in the UK, that usually means where there is commercial justification for it. The fact that for the last 20 odd years nearly every piece of software has been sold with a EULA would very likely be taken as evidence that everyone knows that they are buying no more than the right to use.

          What is perhaps more interesting is the concept of consideration i.e. the price, in contract law. Generally, if there is no consideration for something then there is no contract. If you have contracted with the retailer to acquire the medium, what consideration has passed from you to the manufacturer? Absent consideration, there is no contract.

          As to Sale of Goods Act cases mentioned elsewhere, these are not really relevant to this. It might (subject to what I have said above) give you a remedy against the retailer for not selling you what they said you were getting, but it would be unlikely to afford a defence against a claim by the manufacturer.

          I suspect that the dearth of cases on this subject in the higher courts in the UK is because the manufacturers have no wish to face these arguments, and they will settle rather than risk having the points decided against them.

    9. Kwac
      Gates Horns

      "whatever I buy, I own."

      Any idea how W. Gates III became (at one time) the world's richest man?

      The sentence "The SOFTWARE PRODUCT is licensed, not sold." might give you a clue.

      You did read ALL of their EULA, didn't you?

    10. henrydddd
      Linux

      Sorry, Beak, What I buy, I own

      I have over 15 year experience as a computer specialist (programming, systems design, electrical engineering applications, and as a manager). Back in the early days of computer, software could not be copyright protected because a computer program (like C o Cobol) was view as nothing but instructions to a compiler (or assembler). Many corporations freely distributed the software that they developed. Now we have come full circle to where the owner of the software(in my book, the purchaser) has no rights and the software writer has dictatorial rights

    11. Anonymous Coward
      FAIL

      WRONG! BRIMMING OVER WITH WRONG-A-BILITY!

      You license software, it says on the little sheet of paper, clearly underneath the cellophane. When you install it, while skpping over the NEXT, NEXT, NEXT buttons, you will be given a EULA. You click AGREE/OK/DUH YEAH! or whatever, you agree to license, you agree to a contract between you and the developer to use the software, not buy it or rent it, but use it under their terms and conditions.

      Almost every single piece of software is licensed, you NEVER own it.

      Got that?

  2. Dazed and Confused Silver badge
    Grenade

    Software is not different!

    If the legal system won't stop pandering to rich software companies that pay lawyers vast piles of dosh to claim that for some reason not understood by human beings that for some reason software is different and that the normal laws of the land that apply to everything else somehow just don't apply to it, then it is about time that the elected governments around the world started explicitly writing laws that include computer software.

    1) You get the right of first sale. You may not do anything to impede the legitimate customers right to exercise their normal rights. What you put in the EULA isn't worth diddly squat, just like the introduction in book that says you can't sell that too, funny how there was 2nd hand book shops but no 2nd hand software shops.

    2) The sale of goods act applies to you too guys, if you sell shit you are responsible for making it work and you are responsible for it not working. In much the same way that if you make a car then find that the brakes don't work you have to issue a recall and you have to fix the damn things.

    And before you start whinging that writing software is difficult, it isn't - Stop whinging. Try designing a bridge or a new commercial airliner or anti-cancer drug. They cope with quality laws why are you unique?

    That is will put the price of software up through the roof, It won't, it will reduce the price significantly. Almost all products are priced at "what the market will stand" pricing. Once there is a healthy market in second hand software then there will be legitimate competition and this will keep the price down since vendors will have to compete against it.

    PS, I have and do still sometimes write software for a living.

    1. Destroy All Monsters Silver badge
      Big Brother

      Don't get all huffy

      Consider banks. The legal system is pandering to rich bank companies by allowing them to counterfeit money (i.e. hand out more money than they actually own) leading to all sorts of ill effects, including economic crashes.

      Same here. Special interest groups get special interest. Yes, software would be cheaper if resale were permitted, but that would just be in the little sucker's interest. So no.

  3. Anonymous Coward
    Anonymous Coward

    Come and see the flaw in the system

    This is why judgements based on case law are a major flaw in the judicial system here and the US. It's hard enough to get a sensible law passed, but once passed it only takes one error by one judge or jury to render the law worse than useless as ever succeeding judge has to take the error as gospel.

    Hope this gets appealed, and quickly.

  4. DavCrav Silver badge

    UK law different?

    I thought that in this country EULAs that said silly things like "although you bought this in a shop, and it came in a box and you took it away, just like any other good, it's really a service" were thrown out by the courts here? But I don't know, because IANAL, as most people here!

  5. Anonymous Coward
    Headmaster

    For now....

    "We hold today that a software user is a licence rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions,"

    Seems at least for now consumer software is safe. The software is pruchased in the store, unless it was made clear you were buying a licence at the time it seems they can't restrict second hand sales. The EULA is really a collateral contract and unenforcable since it's viewed after the purchase.

  6. Basic
    FAIL

    Anyone else smell...

    Anyone else smell lobbyists at work?

  7. Anonymous Coward
    Grenade

    @JaitcH - wrong

    You can only buy what is being sold to you. ISTM that in this case Autodesk never sold the original software. From that, it follows, you can only sell what you own.

    AFAICS the only issue is whether the original customers of Autodesk were made aware of the nature of the deal before they paid up. As long as they were, and there was no fraud or misrepresentation, I can't see a problem.

    "When I give money over for software I get a receipt, there is no rental agreement" is a very naive point of view. When you give money over for *anything* you are entering into a contract which will have T&Cs. Whether they are fair or legal is another matter.

  8. Trevor_Pott Gold badge

    This...

    ...cannot be good.

    Ever more the reason to continue trying to replace everything I use with open source. I agree with JaitcH. What I buy I OWN. If you want to rent me software; show me a rental agreement. (I will promptly not rent your software.) Creators deserve to be compensated for the creation of their works…but regular citizens deserve to own what they purchase.

  9. bitmap animal

    Media only

    There are two aspects to this which can be demonstrated quite nicely with MS software, and indeed many others.

    Firstly you get the media kit which has all the software on the CDs. For example Veritas backup, that would contain all the library options, open file backup drivers etc

    You then need the licence keys in order to unlock the functionality you have paid the licence for.

    You have paid for the CD with the software on – should you be able to run everything on that?

    If you do buy it second hand, would you expect to get support and updated from the manufacturer, even though you haven't actually paid THEM anything?

    1. BristolBachelor Gold badge

      "support and updated from the manufacturer"

      @bitmap animal

      "If you do buy it second hand, would you expect to get support and updated from the manufacturer, even though you haven't actually paid THEM anything?"

      So if I buy a Ford car from a car shop, I shouldn't expect to get a warrantee from FORD, or for FORD to replace the defective brakes when there is a recall, because I didn't give the money directly to FORD?

      Should I not get any service from MICROSOFT because I only gave my money to PC World?

      1. TomG

        cars

        When you buy a used or new car you don't buy a license to use the car, it is your's. If you buy a used car (Ford) you may be offered an extended warranty, usually at a high price. And, Ford will fix certain defects on used cars because they want to maintain good customer relations and, in some cases, the federal government requires them to do the repair for safety considerations.

        Perhaps if everyone stopped buying software under the lecensing agreement the software companies would change their terms and make it a sale.

    2. Ray Simard
      Thumb Down

      @bitmap animal

      If you buy a copy secondhand, that does not alter the fact that the manufacturer has been paid for that copy.

      If the original purchaser has installed that program from that copy and has not removed it before reselling it, that is be a different story; there are now two users of one copy. Otherwise, once the publisher has gotten their nickel from that copy, the payer of that nickel should be free to do what they please with it as long as it does not involve duplication for others' use, and whoever is in legitimate possession of that copy should receive as much support as the original purchaser did.

      I cannot understand how this court could fail to recognize this as first sale.

  10. Anonymous Coward
    Anonymous Coward

    No one said anything about renting

    Dear Jaitch,

    No one said, or needed to say, anything about renting. If you don't understand the difference in principle between purchasing a limited set of rights granted (and/or apparently legally restricted, in some jurisdictions) by a licence, and renting a product or service, your legal insight may perhaps be better appreciated elsewhere.

    Big Commerce 0, GPL 1. Yet again. One day it will eventually sink in with the people who think they are buying something they aren't: common sense, justice, and the law, entirely unrelated.

    Yours,

    Not A Lawyer

  11. Anonymous Coward
    Anonymous Coward

    Is this case relevant to the Autodesk ruling?

    http://www.out-law.com/page-2128

  12. J 3
    Joke

    Western Hemisphere?

    "could not be transferred outside the Western Hemisphere"

    So it's OK to send it to Morocco, Cameroon, Portugal, (almost all of) Spain and the UK, but not to Germany, Ethiopia, Egypt, and most of France? Interesting...

  13. Anonymous Coward
    Troll

    Any one else tempted

    To buy a copy of Autodesk, with a check that says, "Non negotiable, non transferrable"? They're only getting a license to your money, but can't actually transfer it.

  14. Anti-Apple
    FAIL

    Sale of Goods Act

    Well luckily in the UK we have the Sale of Goods Act that will clear this up for you.

    When you buy something in the UK from a shop, online, reseller or distributor you are covered under the Sale of Goods Act. If I went into Currys and bought a Copy of Norton or MS Office my sales contract is with Curry's and NOT the Manufacturer / Publisher. The fact that the manufacturer grants me a license to use the software is irrelavant, the Sale of Goods Act supersedes any other contracts. Just my 2 eggs in the basket for you. And anyway how well do you think the secondhand games market is coping with licensed software?

    1. Lennart Sorensen

      Well there is still copyright issues.

      Even if you do consider it a sale (as I certainly think it should be), how about copyright? The company that made the software owns the copyright, which means only they are allowed to make copies of it (or those they license to do so). You bought _one_ copy on some kind of media.

      So to actually install the software on your computer, you have to copy it. You need a license to do that. You can happily own the CD with the software on it, but you are not allowed to make any copies of it without that license. I think used video games might be getting around this by the fact the game isn't actually installed in the case of game consoles and runs from the media itself. Now you may consider getting it into ram to be a copy, in which case things get more complicated again.

      Perhaps one could argue fair use permits you to install that software copy you bought so that you can make use of it. Fair use doesn't seem to be handled very well in general though and certainly not getting much respect by things like the DMCA (in the US).

  15. Anonymous Coward
    Go

    So rent it on

    Figure a reasonable price if you were able to sell the kit, then offer it for lease for a one time payment equal to the selling price. You continue to be the original owner of the hardware and software licenses. You got all the money up front so you don't worry about collection problems normally associated with monthly leasing. You would want to clean personal data off before handing it over.

  16. J. Dub-Ya

    Companies Should Play Fair

    Well, I think they should require all software manufacturers to refrain from the use of the word "buy" in all television, radio, web, print and other ads and use the word "lease" instead.

    Second, software manufacturers should be required to print the EULA on boxed software. The problem here is that you have to open the box to read the EULA and once opened cannot get a refund.

    Last, in reality, the only thing that the EULA should state is that since the software is copy written, you simply can't make make and sell copies of the program.

  17. Anonymous Coward
    Anonymous Coward

    The Law According to Microsoft

    Has, for ages, been that you have a licence to use the copy of Windows that came with a machine on that machine only. You cannot even move it to another machine of your own, let alone sell it to someone else.

    So, nothing new here, surely? And no... retail software, obviously, is not safe from this.

  18. Ilsa Loving
    Flame

    Fantastic ruling

    I think this is a great ruling. Courts and companies have been pussyfooting around this issue for a long time now. Now that it's black and white, there is a basis for making legal challenges and laws. I very much hope that this will cause a huge uproar that ultimately changes the laws that govern software.

    Then again, we've been hoping for the same with patents for a long time now, to no effect. So may be I shouldn't hold my breath...

  19. Eduard Coli
    FAIL

    Autodesk licensing a judge

    Exactly what kind of EULA do judges have?

    If you accept judgement does that mean you have to abide by the EULA?

    Someday we will all find out how this judge was paid off, does he own stock or was it cash on the barrelhead?

    Why else would the court blatantly ignore how every other type of transaction assumes right of first sale and decide this way for software?

  20. Robert E A Harvey
    Linux

    Old arguement, see 1980s.

    I had this conversation when $DEFUNCTCORP tried to sell off its vaxes and SGI stations. I'd told them when we bought it that the software wasn't an asset, but they had put it in the asset register & the liquidators kept refusing offers for the hardware because the system was on the books at a much higher price.

    Long, long arguments, but since they stopped paying me after 12 days I stopped trying to explain.

    Go gpl! it's the only answer.

  21. Yet Another Anonymous coward Silver badge

    Other things with software

    > funny how there was 2nd hand book shops

    The publishers did try this 100years ago and the same court ruled that first sale doctrine applied.

    The problem with this ruling is that everything has software in it. You bought your car but you only licensed the ECU software, so the dealer gets to decide who you can sell it to?

    Same for your iPod, phone, PC CPU with embedded microcode ?

    1. Charles 9 Silver badge

      So if it gets referred to the entire panel...

      ...it may put them in a dilemma, since you would imagine Vernor and/or his attorneys will use the book angle next. The entire Court of Appeals would have to declare either shrinkwrap licenses unenforceable...or most libraries in breach of copyright.

  22. Anonymous Coward
    Anonymous Coward

    Past history

    Wouldn't Mr Vernor have a case with respect to the fact that Autodesk has allowed transfer in the past, therefore their claim that it's not transferable is moot, regardless of sale, rent or lease?

    There surely must have been cases where a company gets purchased by another and the license is continued to be honoured, effectively approving the transfer of the license to the new "owner".

    I'm neither a lawyer, nor play one on TV.

    --Pete

  23. Anonymous Coward
    Grenade

    A little perspective perhaps?

    For those of you that think this is horrible; please note this form of 'purchase' has been common in both the mainframe and server spaces for decades.

    Don't try to resell that copy of Oracle. Forget even attempting to move that copy of CA-Datacom to another machine you own, let alone another location.

    Right now my company is fighting a 3rd party vendor who's getting all pissy about the fact that we're using somebody other than employees to run the machines on which their precious stuff executes.

    If your company gets bought by somebody else, you better hope your legal department did a good job on your existing contracts or you'll be re-licensing a potful of software. I've seen it happen, it's ugly.

    You think EULAs are restrictive? Try negotiating with a CA, IBM or Oracle someday.

    Leasing of software (rather than purchase) has been generally the case since the 70s, if not earlier. This ain't new, and just because you wish it doesn't make it so.

    1. Charles 9 Silver badge

      But a lease usually has a key element...

      ...pen to paper. Most rentals, leases, etc. are contracts that include signatures. ALL the terms are spelled out and agreed to before the transaction takes place. Furthermore, the transaction is usually direct between supplier (or via a legally-designated representative) and client. Going through a retail channel tends to murk that water significantly. So does the lack of pen-to-paper (or some EXPLICIT consent) that would normally be required to make the contract legally binding.

  24. Bryce Prewitt
    Go

    Distinctly the 9th

    Don't worry, everybody. Considering this was a 9th Circuit decision and they are overturned by the Supremes 75% of the time then there is a good chance this won't stand.

    It seems almost as if they even specifically worded their decision TO be overturned - ie "we don't write policy" is just gagging for it.

    IANAL, but only on Sundays.

  25. BristolBachelor Gold badge
    FAIL

    Software and copying

    IIRC, the issue is that one day a very, very stupid judge was convinced that when software loads from the disk to RAM, then a copy is made. Then they said that this copy could only be made if the person doing it had authorisation to make acopy. The license from the SW company gives that authorisation, but only in certain circumstances.

    Now if the same stupid judge ruled in other cases, just imagine it! If you read a newspaper or book then you are guilty of copyright infringement, because there is a copy of it made on you retina. Similarly if you hear anything, then there is a copy of what you hear on your nerves to your brain.

    <Troll remark>

    Quick, lock everyone up!

    </Troll>

    Back to the real world, that means that any money spent on software is not a capital asset, because it has no value. What are the company operating / tax implications of this?

  26. David Kelly 2

    Sales Tax

    I suggest that if the architectural firm was charged sales tax then the transaction was a sale.

  27. westlake
    Pint

    The geek hits the panic button, again

    This was not a shrink-wrap EULA.

    Autodesk offered an architectural engineering firm a chance to go legit by buying R15 at a steeply discounted price -

    on the condition that it destroy all copies of R14.

    Sounds simple enough and the firm agreed -

    But - surprise, surprise - their copies of R14 re-surfaced on eBay complete with hand-written activation codes.

    From here it looks like there was never a legal transfer of title to the disks, licenses, or codes to the eBay re-seller.

    From here it looks like a deal that had a rotten smell to it from the beginning.

  28. Hayden Clark Silver badge
    Grenade

    Auditors take note

    The asset value of licensed software is Zero from the instant of purchase. It has no resale value, therefore no book value.

    This also makes cashflow calucations interesting, as I suspect that the purchase of such a zero-valued item cannot be amortised over several years.

  29. HollyX
    Paris Hilton

    In the clear

    "Autodesk can stop a man from re-selling second-hand copies of its software"

    The answer? Get a girl to buy your software for you ;-)

  30. Callum
    Thumb Down

    same for audio CD sales

    I seem to remember that the defence of "licenced, not owned" has been used in the UK by record companies attempting to prevent DVD and CD's from being sold second hand. However, I can't remember what the outcome was. anyone have a link?

  31. Alien Doctor 1.1

    What to do with some bricks & mortar vendors?

    There are certain places (supermarkets in the main) where I can buy software at discounted prices way after the release date (e.g. a game).

    No EULA is printed on the outside of the box and as someonementioned above it is generally "on the disk". If I were then to open the box and begin the install procedure, read the EULA and decide that I disagree with it, how am I supposed to return said product for a refund? I have been unable to see any terms of the purchase/licensing agreement contained in the EULA and yet am stopped from returning the product because the store will not accept returns.

    Is there anything in U.K. law that would enable me to return the software when the store claims I can't?

    1. Anonymous Coward
      Pint

      Sale of Goods Act should help you

      You have certain rights in the UK under SoGA, which allows you to return anything, without any reason whatsoever, to a retailer within a reasonable amount of time. I believe the roughly agreed period is 7 days high street and 14 days distance. You don't have to give any reason and you do not have to pay a restocking fee, which is the usual con. Fighting it in the flesh is the tricky bit, convincing some jumped up store manager you are right and he is wrong, is the challenge.

      I once had a sofa delivered and found out I have ordered the wrong one. DFS demanded I pay 50% restocking fee on a £2000 sofa set! I demanded to know where on the agreement I signed, it said I had to pay that, the store manager tried to say it didn't have to say it on any agreement, it was the company policy and they can do what they like!!! FUCK OFF was what he got told and I went straight to DFS HQ and quoted SoGA until they waived the fee and sent me the right sofa.

      Generally the on the outside of most software it has a seal, which says something simple like "Breaking seal means you agree to take this and cannot return it.", the SoGA should overrule that in the UK.

      1. Anonymous Coward
        Anonymous Coward

        Not really related.

        Although the restocking part is pertinent. If you've opened and tried to install the software, but found yourself disagreeing with the license, you can return the opened packaging and it's contents within 7 to 14 day period and the retailer is bound by the SoGA to give you a full refund, no questions. As already pointed out in some else's post, there is a matter of copyright that trumps SoGA with software though. Essentially Autodesk, Apple, Adobe or whomever are granting you a license to use their intellectual property, not selling you the code or the software directly. Hence open source, except that isn't really free either. You are still bound by a license, albeit a far less restricted one.

        What is actually quite alarming is the amount of you that clearly don't read the EULA's. Pretty much every software publisher has a clause in their license regarding this and most say that a one time (ie the current owner can sell it *once*) sale is fine and dandy, so long as the seller *completely removes all traces of the software from their possession* and the buyer agrees to the license terms. Autodesk go further by stipulating that sales of this nature are to be done with their consent (ie they want to know about license transfers). The chap that lost this case didn't have that consent. I agree that this is perhaps unnecessary, but those were the terms of the license as agreed by the seller. A bit of reading and some climbing down needs to be done by quite a few posters here...

  32. Anonymous Coward
    Thumb Down

    stupid licences

    sounds like nobody pays those nice EULA etc attention. just like DVDs, CDs and Blu-Rays - all the text basically says you dont own the material...which is stupid.

    its why I pretty much stopped buying software around the time of these agreements appearing all the time - no, I'm not condoning piracy, I'm condoning Free Software - be that GPL or BSD or any variant. its quite clear then that you can run it, compile it etc noone 'owns' it in some nasty big corp overlord way. sure, you might have issues if you use said software in your own commercial software or for military reasons...but by and large, Joe Public can run their own systems at home, their own server, their own web site with relational database etc and not pay anything to a greedy megacorp. just spend the money on something else nice - like charities

  33. P. Lee Silver badge
    FAIL

    Appeals Please!

    So all corporately-owned (is there any other way to express this?) licenses become void if the company is taken over? Ouch!

    Forget about who "owns the software", the licenses themselves are sold as goods. If there is no contract signed when money exchanges hands, it's a sale. It may be a sale of a license+media, but it is still a sale. As long as the second sale merely transfers the rights which the first granted, there should be no problem.

    Publishers should not really be able to call these legal restrictions "licenses." If you have to return things to the publisher, it is a rental. If they ask you to destroy what you have bought when you've done with it (rather than return it), then it is a rental as the publisher retains control at the end of your usage period.

    This is not like a license which you might receive from ARM for their tech, or to use someone-else's trademark. The acquisition process is entirely different. If it looks like a duck...

    No resale of phones, mp3 players, garage-door openers, security-systems, cars, washing-machines, TV's, anything with a chip in it. All accomplished with the inclusion of a bit of paper in the box.

  34. Joe User
    Flame

    Hit them where it hurts

    If you have to pay tax on your "leased" software, send the bill to the manufacturer. After all, if they own the software and you're just leasing it, then it's the manufacturer's responsibility to pay the tax on their property.

  35. Anders Halling
    Thumb Up

    Gah

    I have a building for sale, but you'll have to rip out all the elevators, AC, automatic window blinds etc. because the licence to use the operating software is non-transferable.. Yeah, I can see that stand up in court...

  36. Dreams

    Germany as an example

    American living in Germany...

    Luckily the German courts sided with the consumer on this issue. You own the box, CD case, the CD/DVD, the handbook and the software liscense. You can re-sell the whole package, including the liscense, to whomever you want...because you purchased it. OEM software new and used are sold freely over Ebay and through other online and offline vendors. There is no reason why this couldn't work in the USA.

  37. ratfox Silver badge
    WTF?

    Why so complicated?

    "We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions"

    Considering (2) and (3) depend entirely on the copyright owner, why not stop at (1)? Does the copyright owner have to add (2) and (3) to the contract just so that (1) holds?

  38. EvilGav 1

    Like to see that . . .

    . . . tried in the UK, especially if the software had ever, anywhere, been sold to a minor. Minor's cant enter into a contract in the UK, if it's a license, it's a contract QED if you sold it to a minor, it's not a license.

  39. Anonymous Coward
    FAIL

    For all you legal/tax experts...

    Here's a bit from the California sales tax code. I'll translate for you; except for certain circumstances (none of which include software), leases are treated as sales for tax purposes.

    LEASES AS SALES OR PURCHASES.

    (1) IN GENERAL. Any lease of tangible personal property in any manner whatsoever for a consideration is a “sale” as defined in section 6006 of the Revenue and Taxation Code, and a “purchase” as defined in section 6010 of the Revenue and Taxation Code, except a lease of:

    (A) Motion picture films and video tapes, including television films and video tapes, whether or not they are productions complete in themselves. See, however, subdivision (d)(2) below for application of tax for periods on and after September 1, 1983, to leases of video cassettes, videotapes, and videodiscs for private use under which the lessee or renter does not obtain or acquire the right to license, broadcast, exhibit, or reproduce the video cassette, videotape, or videodisc.

    (B) Linen supplies and similar articles, including such items as towels, uniforms, coveralls, shop coats, dust cloths, caps and gowns, etc., when an essential part of the lease is the furnishing of the recurring service of laundering or cleaning of the articles leased.

    (C) Household furnishings with a lease of the living quarters in which they are to be used. The lessor of the household furnishings must also be the lessor of the living quarters. The living quarters must be real property rather than tangible personal property.

    (D) Mobile transportation equipment for use in transportation of persons or property (see Regulation 1661 (18 CCR 1661)).

    (E) Tangible personal property leased in substantially the same form as acquired by the lessor or leased in substantially the same form as acquired by a transferor as to which the lessor or his or her transferor acquired the property in a transaction that was a retail sale with respect to which the lessor or the transferor has paid sales tax reimbursement or as to which the lessor or the transferor has timely paid use tax measured by the purchase price of the property.

  40. Chris Evans

    Why Doesn't the doctrine of 'first sale' apply to the company Vernor bought Autodesk from?

    I wonder why the doctrine of 'first sale' doesn't apply to the company Vernor bought Autodesk from?

    If it does still apply the ruling means that original purchaser can sell the item on but the item not then be sold on again!?

    Which doesn't really make much sense if the doctrine of 'first sale' allows the seller to dispose how he likes!

    Also I'm sure there is enough other specifics to the case not to make the case definitive!

    I recall regarding some very expensive licenses a company transferred the rights to a subsidiary and sold the subsidiary who's only asset was the license!

    UK law is just as untried and unclear!

  41. Richard 15

    It all comes down to the contract with the first buyer.

    From what I understand, there IS a contract with original licensee of the autodesk software.

    That contract does not allow for transfer of the software, The reseller in this case is selling

    something that, according to contract, he does not have the right to possess in the first place.

    Or, rather, he may have the right to the physical media and materials, but not the license to

    install it anywhere. The company that signed the contract did not have the right to transfer

    the physical media to the reseller in the first place.

  42. NBCanuck
    Alert

    License or own

    There needs to be clarification on purchasing movies. Media keeps changing: VHS, DVD, Blu-Ray. If we BUY a movie on DVD we should be permitted to do with it what we will - we should truely own it. Transfer it to a portable media player, whatever we want.

    If when we take possession it is truely a license deal, then if I have a "license" to watch Batman I feel that, when the primary media formats change I should be able to turn in my physical media and pay a minimal amount to update the media. I don't believe that I should have to buy one license to view it from a VCR, another one to watch it on a DVD player, another one to watch it on a Blu-Ray player, and another one for the next format.

    Wonder why movie sales are not what they used to be? Maybe people who invested thousands of dollars for a movie collection are tired of seeing their collections get outdated and start having trouble finding players when their old ones fail.

    Sell me something at a higher price is fair as long as I can recoup some of the cost by selling it when I no longer have use for it.

    If it is just a licence, make it available for me to view in whatever format I wish without making me pay full price for each type of media I wish to view it on. If you aren't wlling to do that then drop your price!!

  43. Bram

    He should really know better

    Autodesk is one of those companies that need a crowbar to fart. Have you ever tried to purchase a copy its kinda obvious that you are buying a licenses and it costs through the nose so obviously if you're going to try and resell it you going to get burnt.

  44. kain preacher Silver badge

    @Bryce Prewitt

    I would to see were you got that stats from. The 9th circuit court of appeals statistically gets over turned no more than any other appeals court . People often through out the the 9th circuit gets over turned more then any other out appeals court with out telling you they hear more appeals than any other court .

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