Most folks don’t realize that most of the software you buy … you aren’t really buying. You’re licensing it. Yeah, sure, you have the disks and the manuals and all, but most software publishers maintain that you don’t really own those things. You’re just licensing them. Which means they retain control over how the product is used, and, more importantly, distributed. To wit, many software publishers throw a holy fit if you try to do something like, oh, sell a software package you bought licensed from them.
(Note that this is very different from, say, books. There are broad copyright protections on books to keep an owner of a copy from making copies and distributing them, but the right of First Sale means that if I want to sell my used paperback, I can do so without permission of the publisher or paying royalties or anything else. Some book publishers aren’t happy with that, but that’s the current situation.)
How do you know that you’re only acquiring a license, not ownership, of software? It’s usually not printed on the box anywhere. Instead, it’s usually inside, in fine print. And it usually says something like, “By opening this box, you agree to the following …” That’s a shrinkwrap license — a license you can’t see or read until you open up the shrinkwrap (at which point most stores will not take the purchase back). Shrinkwrap licensing has a very mottled history in court.
And now it’s all sort of coming to a head …
A lawsuit has been filed in Federal Court (US District Court for the Western Washington District C07-1189 JLR) that alleges Autodesk, Inc maker of the industry standard AutoCAD software and their attorney Andrew S. Mackay have devised an illegal scheme to have used copies of their software removed from the eBay site using the Digital Millennium Copyright Act.
[…]The right to sell an item that has been legally purchased is protected under copyright law. The first sale doctrine allows an individual to transfer ( i.e. sell, giveaway etc.) a lawfully made copy of an item without permission once it has been obtained. The doctrine has been part of US law since the Supreme Court recognized it in 1908 and covers everything from books and DVDs to clothing and automobiles.
Autodesk is using the Digital Millennium Copyright Act to have legal copies of their software removed from eBay so they can sell more new copies. The latest version of AutoCAD software is around $4,000 a copy. Autodesk’s lawyer, Andrew S. Mackay states “AutoCAD software is licensed, not sold and that license is not transferable.” AutoCAD software is available for purchase at most major software retailers. There is no indication your purchase would be different from any other until you get it home and open the box. There is a piece of paper tucked inside that says it is a licensing agreement with the statement “by opening the sealed software packet(s), you agree to be bound by the terms and conditions of this license agreement”. This is called a “shrink wrap” contract. It cannot be read until you open the package which according to the contract constitutes agreement. US courts have not held a “shrink wrap ” contract to be valid. Furthermore the Digital Millennium Copyright Act is only intended to enforce copyright violations, not breach of contract.
The lawsuit also alleges perjury since the notice that was sent to eBay is required to be signed under penalty of perjury and fraud. Using illegal means to make a legal gain (i.e. sell more new copies) is a civil definition of fraud. Autodesk’s attorney Andrew S. Mackay is currently under investigation (# 07-24456) by the California State Bar Association for his actions in this matter.
The above is a press release, so it is a bit one-sided in its conclusions. Still, it’s an interesting case:
- Is this another case of the DMCA being used in a flaky (yes), unintended (likely), illegal (possibly) fashion?
- Will shrink-wrap licenses be upheld?
- Will course consider buying a box of software off of a shelf at a retailer different from buying a box of detergent off of a shelf at a retailer?
There’s more info here, and court documents are being tracked here.