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Software IP and cover disks



taupirho@gmail.com
5/13/2005 5:34:03 PM


I recently put a magazine cover disk up for sale on Amazon. This disk
contained, among many other things, a full version of a poular
commercial web-development package. Not long after the listing ebay
pulled it citing VERO. In otherwords the makers of the software had
complained to ebay complained that by selling the disk with their
software on it I was violating their Intellectual Property rights. A
couple of questions arise. a) Considering that it wasn't an illegal
copy, and that I legally obtained and owned the disk in question was
the software company within their rights to instruct ebay to remove the
listing. b) Suppose the disk packaging or software licence states that
the disk or software is not for resale, how does this sit with an
individuals right to sell something they own. c) How is this scenario
different to me selling a music CD I own on ebay for instance. I don't
own the copyright to the songs on the CD but I can still sell it -
right ??
 
 
Jonathan Sachs
5/16/2005 8:57:12 AM


On Fri, 13 May 2005 17:34:03 -0400, taupirho@gmail.com wrote:
I recently put a magazine cover disk up for sale...
the makers of the software had
complained to ebay complained that by selling the disk with their
software on it I was violating their Intellectual Property rights. A
couple of questions arise. a) Considering that it wasn't an illegal
copy, and that I legally obtained and owned the disk in question was
the software company within their rights to instruct ebay to remove the
listing.
That depends on whether the software came with a license, and whether
you have violated some term of the license. Unless the software
publisher did something very unusual (and stupid), it did, and you
did.
b) Suppose the disk packaging or software licence states that
the disk or software is not for resale, how does this sit with an
individuals right to sell something they own.
Apples and oranges. The fact is that although you own the disk, you do
not own the software on the disk. You have the right to USE the
software in those ways permitted by the license, and no others.
In theory you might think that you have the right to sell the disk,
but the buyer would not have the right to use it, and the law says
that if you sell something which the buyer cannot use without
infringing a copyright, you are yourself liable for "contributory
infringement." Ergo, you cannot sell it.
c) How is this scenario
different to me selling a music CD I own on ebay for instance. I don't
own the copyright to the songs on the CD but I can still sell it -
right ??
In one sense, it's not different at all. You own the music CD, but you
do not own the music on the CD. Thus you have the right to use the
music in those ways permitted by the license that came with the CD,
and no others.
For example, you can play your music CD all you want for yourself and
your family and friends, but if you play it in public or broadcast it
you must pay royalties for the use of the music, even though you own
the CD.
Of course, there are differences in the nature of the license and its
contents. Music CDs have inherited the licensing practices that were
developed for phonograph records. The retail purchaser's license is
completely standardized and is implied by the sale of the CD. In
contrast, the retail purchaser's license for a software product is
quite variable and thus requires a document to give you notice of the
license's terms. But there is a license in each case, and once the
terms of the license are known, they are interpreted and applied in
the same way.
You have the right to resell a music CD not because the law gives you
such a right, but because the standardized, implied license does.
Historically speaking, it would be absurd for the license to withhold
this right because the right was not prone to abuse and a license that
withheld it would be impossible to enforce. Neither of those things is
necessarily true for software, which is why software licenses often
(although not always) forbid you to transfer ownership of the software
without the licensor's permission.
My email address is LLM041103 at earthlink dot net.
 
 
sethb@panix.com (Seth Breidbart)
5/18/2005 1:44:56 PM


In article <v26h811q2dbtufe0f5m9dteo5301qto2gh@4ax.com>,
Jonathan Sachs <xxxxxxx@earthlink.not> wrote:
You have the right to resell a music CD not because the law gives you
such a right, but because the standardized, implied license does.
I thought it was the "first sale doctrine" and not anything to do with
licensing (since there is no _license_ when I buy a CD or book, just a
_purchase_).
Seth
 
 
Jonathan Sachs
5/20/2005 8:57:03 PM


On Wed, 18 May 2005 13:44:57 -0400, Jerry Stratton <newsw@hoboes.com>
wrote:
Does this mean that Bobbs-Merrill Co. v. Straus has been overturned?
According to that case, as I read it, companies cannot use what we would
call a EULA to block purchasers from reselling things that they buy,
however they prefer; in that case it was books, but unless the case law
has been overturned I can't see how software would be different; it's
both copyright.
In the Ninth Circuit, Softman Products Company, LLC v. Adobe Systems
Inc. appeared to say the same thing about software.
I won't comment on the first case now, because I have not read it. I
have read the second one. In that case the court ruled that Softman, a
software distributor, could break up legally purchased copies of an
Adobe product suite and resell the parts individually, notwithstanding
the provisions in Adobe's license. The principle of the case was that
the court must look at all the facts of the transaction to determine
whether it was in fact a license or a sale, and that in this case,
although Adobe called it a license, it was really a sale.
The case does NOT stand for the principle that retail software
transactions are by definition sales rather than licenses. If I were
arguing the software publisher's position in a case against the OP,
and I were stuck in a jurisdiction that followed Softman, I could make
a strong argument for distinguishing my case on the facts. In Softman
the publisher was offering software for resale to anyone, at any time,
through regular distribution channels; here the publisher has made a
special deal to distribute software to a specific group of buyers,
through a specific channel, at a specific time, and essentially for
free. In Softman, a restriction on resale was arbitrary. Here, it
represents a legitimate effort to prevent a marketing tactic from
backfiring so that it interferes with retail sales rather than
promotes them. That is ample reason (I would argue) for treating the
transaction as a license rather than a sale.
Softman is a district (trial) court decision. I Shepardized it a few
weeks ago and found three other Ninth Circuit cases that cited it.
Once cited it as authority for an entirely different principle, one
distinguished it on the facts, and one flatly refused to follow it.
Courts outside of the particular district that handed down the
decision would probably not consider it very persuasive.
In general, it appears to me that Softman stands for a legal theory
that is not in high repute, and is likely to become accepted law in a
very narrow range of situations, if at all.
My email address is LLM041103 at earthlink dot net.
 
 
Jonathan Sachs
5/20/2005 8:57:05 PM


On Wed, 18 May 2005 13:44:57 -0400, Jerry Stratton <newsw@hoboes.com>
wrote:
Does this mean that Bobbs-Merrill Co. v. Straus has been overturned?
According to that case, as I read it, companies cannot use what we would
call a EULA to block purchasers from reselling things that they buy,
however they prefer; in that case it was books, but unless the case law
has been overturned I can't see how software would be different; it's
both copyright.
I have read the Bobbs-Merrill case now (210 U.S. 339 (1908)). The
plaintiff published a copyrighted book which contained a notice that
"The price of this book at retail is one dollar net. No dealer is
licensed to sell it at a less price, and a sale at a less price will
be treated as an infringement of the copyright." The defendant sold
the book for less than $1.00, and the plaintiff sued for infringement.
The plaintiff's argument was based on an analogy to patent law, where
the plaintiff claimed to find a principle that a patent holder had the
right to control the retail price of goods sold under its patent. That
argument was questionable (today such a provision would violate the
Sherman Antitrust Act), but the court avoided passing judgment on it.
Instead of the court stated that even if the principle was valid, the
parallels between patent and copyright law did not warrant extending
it to copyrights.
This case stands only for the principle that copyright law does not
give a copyright holder the right to control the terms of resale of a
copyrighted work. It says nothing about whether the copyright holder
may control the terms of resale by other means, e.g., by a license. On
the contrary, it strongly implies that if the reseller had been
subject to a contract or license, the court would have reached the
opposite result. It makes a point of noting that "the wholesale
dealers were under no agreement or obligation to enforce the
observance of the terms of the notice by retail dealers,"
notwithstanding some facts that might be interpreted the other way.
In summary, I believe that Bobbs-Merrill is still good law, but it
does not apply to these facts.
My email address is LLM041103 at earthlink dot net.
 
 
Jerry Stratton
5/21/2005 7:20:06 PM


In article <om1t811ndpcr8b2hed1cm606uvoeqv33fu@4ax.com>,
Jonathan Sachs <xxxxxxx@earthlink.not> wrote:
On Wed, 18 May 2005 13:44:57 -0400, Jerry Stratton <newsw@hoboes.com>
wrote:
This case stands only for the principle that copyright law does not
give a copyright holder the right to control the terms of resale of a
copyrighted work. It says nothing about whether the copyright holder
may control the terms of resale by other means, e.g., by a license. On
the contrary, it strongly implies that if the reseller had been
subject to a contract or license, the court would have reached the
The equivalent to a software EULA would have been to add "this is a
license, not a sale" to the wording inside the book. Do you feel that if
the publisher had added that wording, it would have turned the sale into
a license?
Jerry
--
It Isn't Murder If They're Yankees
http://www.ItIsntMurder.com/
 
 
Jonathan Sachs
5/22/2005 2:20:14 PM


On Sat, 21 May 2005 19:20:06 -0400, Jerry Stratton <newsw@hoboes.com>
wrote:
Does this mean that Bobbs-Merrill Co. v. Straus has been overturned?...
This case... says nothing about whether the copyright holder
may control the terms of resale by other means, e.g., by a license.
The equivalent to a software EULA would have been to add "this is a
license, not a sale" to the wording inside the book. Do you feel that if
the publisher had added that wording, it would have turned the sale into
a license?
Very hard to say, and the justices who wrote the opinion are no longer
around to ask!
My gut feel is that they were offended by the idea of a book publisher
dictating the retail price of its books, for all of the reasons that
the Sherman Antitrust Act later made such practices illegal. If the
publisher had been savvy enough to include such language, they would
have looked really hard for some other reason to rule against it.
Perhaps they would have written an opinion something like Softman, who
knows? The Supreme Court can rule as it wants, within the limits
imposed by the Constitution, and other courts will follow.
The bottom-line idea I hope people will take away from this is that
notwithstanding analogies to books and sound recordings, the practice
of licensing software is well-established and thoroughly accepted. If
the courts interfere with it at all, they will do so very reluctantly
and narrowly.
My email address is LLM041103 at earthlink dot net.
 
 
Jonathan Sachs
5/22/2005 2:20:16 PM


On Wed, 18 May 2005 13:44:56 -0400, sethb@panix.com (Seth Breidbart)
wrote:
You have the right to resell a music CD not because the law gives you
such a right, but because the standardized, implied license does.
I thought it was the "first sale doctrine" and not anything to do with
licensing (since there is no _license_ when I buy a CD or book, just a
_purchase_).
I think we are getting down to issues of semantics. I explained the
music situation in terms of an implied license to emphasize the unity
of principle between how music and software are protected. I should
have noted that the "license" for a music CD is not only based on
custom but codified in the copyright law. One could add that the first
sale doctrine is one of the provisions implied by that "license." A
person with a different objective could perfectly well have explained
how music is protected without discussing licenses at all.
My email address is LLM041103 at earthlink dot net.
 
 
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