U.S. District Court: Software is owned, not licensed

[Stormwaltz]

It will be interesting to see what the spin-off effects of this will be (provided it isn't overturned in the inevitable appeals process).

http://www.out-law.com/default.aspx?page=10421

[Merusk]

Being that I'm an everyday user of Autodesk products, I've been following this one fairly closely for a little while now.  Here's what I remember of the details;

 The initial case was brought about because Mr. Vernor came into legal possession of several hundred copies of Autocad 14, which he sold on e-bay for a fraction of the original price.  He wasn't copying the disks, just reselling the original copies to other individuals who wanted AutoCAD but didn't want to pay the $4k+ annual fees to AutoDesk for a newer version.   Autodesk claimed this was piracy, and he argued he had the right under first sale doctrine.

The court sided with him, saying he had every right under first sale, and it was pretty clear cut on that claim.  Autodesk then appealed, saying that they never sold their products in the first place, they only granted a license to users and provided them with copies of the software.   Therefore, there was no right of first sale and the original judgment was invalid.

The appellate court disagreed, saying that because Autodesk had never set conditions at the time of sale for returning of the software, an expiration date on the 'license' or done any follow-up with any other users to be sure they hadn't transferred the software in violation of this 'license' agreement.  Therefore it WAS a sale, despite what their piece of paper happened to say, and Vernor was within his rights to resell.

This latest verdict was their next attempt to run around the original verdict and that appeal.

All this really means is that the legalese in newer software has to be more strict, AND you have to provide an exact end to the terms of the license and returning the software.  AutoDesk is already starting to do this by promoting the hell out of the annual subscription plans for their softwares.  I expect the next move will be to say "We no longer offer anything but the subscription plans."

[Bunk]

"We no longer offer anything but the subscription plans."

That's where my company has gone - we dropped all of our desktop products (in favor of online subs) a few years ago.

It was kind of fun when we sold desktop products though. We embedded the registered user's name in to the system when we sold it, based on an installation code and serial number. Every few months someone would call up, having bought the program off of eBay, asking us to change the name in it. We were glad to - for a $300 proccessing fee.

[Murgos]

The Supreme Court already ruled once that Shrinkwrap License Agreements (i.e. EULA's) were enforceable (Mortensen v. Timberline?), and did that ~25ish years ago.

I don't see how a license agreement, particularly one never agreed to by both parties, can be enforceable on a product that can't be licensed.

[IainC]

It's not so much that it can't be licensed, it's just that, in the opinion of the court, it currently isn't licensed despite AutoDesk's assertion to the contrary. As others have said it's possible to move to an unambiguously licensed business model with software.

[Murgos]

It's not so much that it can't be licensed, it's just that, in the opinion of the court, it currently isn't licensed despite AutoDesk's assertion to the contrary. As others have said it's possible to move to an unambiguously licensed business model with software.

That's sort of my point.  At the moment, almost all retail software includes a EULA on how you are allowed to use that software, this is based on the premise that you don't own it even though you purchased  a shrink wrapped boxed copy of it, without ever signing a license agreement.

Every case that was upheld on a violation of EULA based on the Mortenson v. Timberline decision by SCOTUS seems to be open for reinterpretation if this case ruling is upheld.

Edit: To be totally clear I am not saying software can't be licensed, I am saying that this ruling seems to me to invalidate shrinkwrap EULA's.  Which have already been ruled to be valid.

edit2: It's timberline not timberland

[CmdrSlack]

Well, this ruling only invalidates this specific license. That said, I'd be willing to bet that lots of companies use similarly ambiguous licenses (no end date, no method for returning the software, etc.) So yeah, it definitely threatens the EULA-type agreements, but all that has to be done is go to a) a subscription model or b) modify the EULA in place (which allows for modification without notice, most likely) and make it retroactively apply to old EULAs as well.

It's possible to write a non-abusive EULA that protects the interest of the copyright holder, but it's rare that anyone takes the time to do it.

[Merusk]

"We no longer offer anything but the subscription plans."

That's where my company has gone - we dropped all of our desktop products (in favor of online subs) a few years ago.

I suspect AutoDesk would have done this a number of years ago if 1) They didn't see selling the boxes at a ridiculous price as a key component of their business and 2) Their target audience (for AutoCAD) didn't have such disdain for the product that they're all ready to bolt as soon as a better alternative comes up.  Pushing a mandatory model might just make a number of companies jump ship to Microstation or one of the (arguably better) parametric drafting choices.

There's a lot of push back against the current sub model as it is, particularly since the last 2 years' updates (09 and 10) have provided marginal upgrades.  There's a lot of "Why am I paying $400 per year per seat for this?"  that I'm seeing.  AutoDesk hasn't helped their case by now eliminating the upgrade option for older versions.   Previously if you had, say, 05 and wanted to jump to 2010 you'd pay a reduced price for those seats.  They've now decided "Nah, you pay full price.  You should just subscribe and not upgrade if you don't like that year's revisions!"  

THEN tack on that they change the save file structure every 3 years, in another attempt to force upgrades, and causing no end of comparability issues between folks who upgrade and their less tech-based subcontractors who are using the older version, (or even R14 in some cases).

Whoops, major derail on something nobody but me cares about.



Anywho, no it was never about the EULA being enforced or not.  They went after Vernor for copyright infringement, not EULA violations, so  the EULA cases never enter into the picture.

Ars Technica Article. = http://arstechnica.com/tech-policy/news/2009/10/autocad-resale-ruling-a-messy-win-for-first-sale-doctrine.ars

Also.. having just finished reading that, the Judge is factually correct but utterly out of touch with motivations of some companies... like the RIAA

As for the death of the secondary market and the end of libraries, "Mr. Vernor’s fear of the destruction of established resale markets also seems misplaced. The court notes, for example, that widespread piracy of musical recordings from compact disks has not led the music industry to adopt a restrictive licensing regime like the one Autodesk advocates."

I'm pretty sure that's exactly what they're trying, but via government intervention since it involves more industries than themselves. (like CD manufacturers)

[Margalis]

The idea that visiting a forum is a tacit agreement to be bound by their rules is really no more ridiculous than the idea that buying software is a tacit agreement to be bound by the enclosed EULA.

[Murgos]

Anywho, no it was never about the EULA being enforced or not.  They went after Vernor for copyright infringement, not EULA violations, so  the EULA cases never enter into the picture.

Wasn't what I was suggesting, my premise was that this ruling indirectly conflicts with the previous ruling.  A consequence of not a direct line to.

And Margalis, it's not the same, the part of the premise of EULA enforceability is that you can simply NOT use the software and return it once you have read the EULA if you disagree with it.

Where I see the difference here is that if you own the software and thus are able to resell it (that copy of it), is the second owner also bound by the EULA?  What about later updates to the EULA that weren't included in the box?  I never agreed to those changes, like I would have to with a licensed copy.