Federal Ruling Challenges Validity of Used Software Sales

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Federal Ruling Challenges Validity of Used Software Sales

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Reselling used software has always been part of the American way, but an appeals court ruling could change things.

The controversial used games and computer software market is unlikely to be shoved off the table anytime soon, but a recent court ruling may challenge the practice in certain situations. On Friday, the 9th Circuit of Appeals ruled in favor of Autodesk in a case where it sought to stop a vendor from selling its software on eBay.

Timothy Vernor reportedly bought a copy of Autodesk's AutoCAD at a garage sale and put it up on eBay in 2005. After a back-and-forth between Autodesk and Vernor that saw his auctions removed and reinstated on the website, a legal battle over first-sale doctrine rights in regards to Autodesk software began.

The first-sale doctrine is the result of a century-old Supreme Court ruling that allows the purchaser of a product like a book, movie, or videogame, to resell it as long as additional copies aren't made. Autodesk believes the doctrine doesn't apply to its software as it's being "licensed" rather than sold.

The recent appeals court decision states that the first-sale doctrine is "moot" if there is no "definitive sale." Vernor's legal team is currently deciding whether or not to appeal the ruling to the U.S. Supreme Court, while eBay has issued statements in support of Vernor.

Corynne McSherry, a lawyer for the Electronic Frontier Foundation, says the decision, if upheld, could lead to more software developers "trying to find the magic words that prevent a buyer of intellectual property from being considered the owner." Attorneys involved with the case say it could have a "chilling effect" on the used software market, as the widespread use of licensing agreements "means the infrastructure already is in place for other software makers to say their customers don't really own those programs."

Videogame publishers have almost universally come out against the sale of used games by retailers like GameStop, which basically sell the used copy of their products right next to the new copy. Whether this ruling could have an effect on the used games market or not is unknown, but it seems like just a hop, skip, and a jump away if publishers are able to get clever enough. At the least, reselling certain kinds of used software may just have gotten a lot tougher, but we'll have to wait and see if other software developers and publishers are able to incorporate the "licensing" argument in their products to go against the first-sale doctrine.

Source: Yahoo News

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I dunno...last time I checked handing over money for a product with no other agreement beyond cash-for-carry-out constituted a "sale".

edit: this is why a EULA isn't seriously binding; it takes effect post-sale.
Which means I'm free to not read anything, lie, and click "agree" to get my software running.

Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

GothmogII:
Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

Absolutely, dude. The publishers just want their bread to be buttered on both sides.
And its greasy.

Oh god this is terrible... If they can actually get away with this... Then we'll have a tough time getting games for what they're WORTH.

The Thing is that the reason these got so popular because it was saving money, and games usually don't have the umph for the 50 bucks you put into it....except maybe like Fallout 3, or L4d2(if you love the online), MW2 (same deal). So I think that it would be fair for the game companys to make the games significantly cheaper as to curb the used game sales.

Games say your only "licensing" the game as well through the EULA. However in most cases(actually all I'm pretty sure), the EULA has to be agreed after you bought the game and are installing it. And I doubt that would fly at all in the courtroom.

Just because Publishers say something is law doesn't make it a law.

Uh last time I checked, a "license" had to be renewed after a set period of time, whereas a "sale" was a one time cash payment in return for product or service. Since the purchasing of software clearly falls under the latter category, I fail to see how this claim is valid.

The publishers are so greedy. I mean, they already sold the damn thing once, and besides, this is a problem with precisely zero other products and used sales.

GothmogII:
Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

Maybe not in the traditional sense, but games at launch are usually a worse quality then the same game a month or more old. Since games seem to get updates all the time, the games get better, meaning if you sell it to someone else, the guy doesn't have all the updates, so he got an obsolete copy. Yes that explanation has its problems and is rather shaky, but so are most arguments against piracy/used games put out by game companies.

Judas Iscariot:
Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

That's actually a valid point. If the argument is that one only purchases a "license," then the buyer must be made aware of ALL of the points of the agreement, as it would now constitute a contract (I think, don't know too much about legal things). Say hello to white boxes covered with text, that end in "by purchasing this product, you agree to the above stated limitations."
I hate the legal system sometimes, and not just because it allows stupid people to feel important due to some "arguing."

it feels like they're simply trying to squeeze every last penny from customers.
when you buy a book, read it, and then want to sell it, then that's perfectly normal. it allows other people to enjoy a book, they get a lower price, and you get some money back.
but you don't see authors in an uproar, telling people they only bought the license to read their work.

canadamus_prime:
Uh last time I checked, a "license" had to be renewed after a set period of time, whereas a "sale" was a one time cash payment in return for product or service. Since the purchasing of software clearly falls under the latter category, I fail to see how this claim is valid.

SHUSH! don't give them ideas =(

Well, I don't think it matters one way or the other because gaming will go fully digital at some point, unfortunately.

thethingthatlurks:

Judas Iscariot:
Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

That's actually a valid point. If the argument is that one only purchases a "license," then the buyer must be made aware of ALL of the points of the agreement, as it would now constitute a contract (I think, don't know too much about legal things). Say hello to white boxes covered with text, that end in "by purchasing this product, you agree to the above stated limitations."
I hate the legal system sometimes, and not just because it allows stupid people to feel important due to some "arguing."

Actually I think even that would not constitute a valid license...you'd need the clerk to get each customer to agree. And I'm pretty sure that won't fly.
After all, you're not obligated to read shit until you have been obligated to as part of the...currency exchange for an eternal product license.
Yeah, I can't seem to make that sound legal.

mattttherman3:
Well, I don't think it matters one way or the other because gaming will go fully digital at some point, unfortunately.

And then one person will make a static/broken copy of the software, and we return to square 1.

Every day the free market dies just a little bit more. Curse you, Keynesian economics! Where's F. A. Hayek when you need him?

GothmogII:
Oh dear.... This is not a good thing at all, especially if the publishers try to leap on this.

I can however, -sort- of agree to an extent, I've bought varying versions of Adobe's Creative Suite for example, and understand why in those cases it's a license you're buying in addition to the actual product. It's an in-depth set of tools tool that allows the user to get back many times their moneys worth on it, especially when used in a professional capacity. But arguably, is a car any different? It came up in the recent Penny Arcade topics, but if we take the object as something a person can use to make a living off of, why then is a car acceptable to sell second hand, but not a piece of software? I mean, yes, software doesn't suffer to same kind of decay a vehicle would over time, but things like AutoCAD and Creative Suite are routinely updated and become obsolete after several iterations, even if those iterations are still usable.

Games...not so much.

Yeah, games are a far cry from a tool, even the rpgmakers and littlebigplanets and half lifes would be hard-pressed to be labeled as such.

The car analogy might be a little weak though, as its not directly responsible for profiting for the most part. It gets you from A to B, deliver to C sometimes, or even go to D and take a friend to his work at E. But in that case, what would the friend call your car?

A program like AutoCad though? Yeah. It suffers virtual decay, the longer you have it, the more it'll be outdated, the less it will be supported and maintained, and eventually it'll be obsolete compared to the newer ones, but you could continue using it regardless.
Cars can continue to be used, but you'll have to continually pay to keep it in condition, it'll become a deathtrap, and well... mostly only good for looking cool.

There's that continued investment that separates the two. AutoCad won't see any return on profits from the program after its sold, while car manufacturers and such will continue to see money in selling manuals, parts, and such (not much of a car person, so excuse the rather basic knowledge).

This decision makes sense, but the way its worded is wrong, and prone to abuse (as is any though I guess).
What should be specified, is that any bought software that can be and is currently used in commercial ways, can not be sold to others.
Then companies that produce the software need to create a discount for owners of previous incarnations of the software.

if publishers do try to bring this to court it will probably lead to the court ruling that every software retailer has to make the client sign or agree to the liscensing. If it is something like that then the retailers could simply say they will stop selling from certain publishers if all they sell is the liscense...yeah.

hope that it's clear enough to read.

oranger:

thethingthatlurks:

Judas Iscariot:
Yup, definitely need to invest in a file sharing service since if this shit goes through then people will just pirate even more.
But yeah, won't games now have to have the EULA printed on the front of their games now since its no fucking good telling you the terms of "licencing" the game after you have already paid for it.

That's actually a valid point. If the argument is that one only purchases a "license," then the buyer must be made aware of ALL of the points of the agreement, as it would now constitute a contract (I think, don't know too much about legal things). Say hello to white boxes covered with text, that end in "by purchasing this product, you agree to the above stated limitations."
I hate the legal system sometimes, and not just because it allows stupid people to feel important due to some "arguing."

Actually I think even that would not constitute a valid license...you'd need the clerk to get each customer to agree. And I'm pretty sure that won't fly.
After all, you're not obligated to read shit until you have been obligated to as part of the...currency exchange for an eternal product license.
Yeah, I can't seem to make that sound legal.

Urgh, as if electronic store employees weren't annoying enough already...
"Hello Sir/Ma'am, can I get you the necessary 200 page contract so that you can purchase the license to a copy of Halo 24212.5? No, alright, have a good day then."
The day that happens, my bank will notice a substantial decrease in my spending, while my ISP will notice a sharp increase of bandwidth I use...

They do have a point, but an AutoDesk license is very different then a videogame.

They shouldn't try to fix this via laws that in turn screw up hunderds of other things, just put a damn CD-Key in with every product and/or make it necessary to activate once using that key and you'll be fine...

TheMaddestHatter:
Every day the free market dies just a little bit more. Curse you, Keynesian economics! Where's F. A. Hayek when you need him?

Well... if you want a completely free market, you'd have to get rid of all copyright law, network neutrality, every ethical guideline...

Basically, market freedom is not good for the consumer. Anyone who's tried to convince you otherwise is lying.

But... yea, this can only be good. Publishers already competed with each other. Then gamestop treating used games like they're competing with new copies fucked up everything. If gamestop ended, so would project ten dollar, DLC, and planned trilogies. If used sales dropped to the level of piracy, games would be longer, better, and things like communities would be encouraged, rather than feared.

Dioxide20:
They do have a point, but an AutoDesk license is very different then a videogame.

No it isn't. The only difference in the two is that the AutoCAD license includes language expressly allowing the user to sell what they've produced using the software.

mattttherman3:
Well, I don't think it matters one way or the other because gaming will go fully digital at some point, unfortunately.

Not for many, many, MANY years. If at all. You aren't going to be seeing the PS4, 360 successor, and Wii successor (damn Nintendo and Microsoft for going with different names each time, make it easy like Sony please), that's for sure. Just because some people have access to good internet doesn't mean everyone does, and companies aren't dumb enough to cut out huge chunks of their consumer base by going download only at this point in time.

Meanwhile, this ruling is right here, right now. So yes, it does matter. It does matter a lot. This issue is in our face now, we have to deal with it now and not wait who knows how many years to make digital distribution to completely take over and render selling games once you're done impossible.

What upsets me isn't the effect of this on the used market, but rather on the primary market.

I collect games. I consider them valuable works that I want to be able to show my children someday. The licensing system endangers being able to do that, and it'll be horrible if someday, my collection just.. stops at Suikoden V.

What about Portal? Rise of Legends? Mass Effect? The company's are also selling themselves short, using systems that undermine their creations' longevity. At this rate we're at best going to have a whole period missing from our artistic history, and it'll be the fault of rulings like this encouraging the license-over-ownership habit.

And if it becomes widespread in videogames, well, just wait, other publishers'll want in on the ;not having to actually sell anyone ownership of anything' pie. Probably first music, then movies, and finally books..

I know I'm exaggerating a bit - it's a worse case scenario. But still, this is a bloody insidious threat, all considered.

Serris:

when you buy a book, read it, and then want to sell it, then that's perfectly normal. it allows other people to enjoy a book, they get a lower price, and you get some money back.
but you don't see authors in an uproar, telling people they only bought the license to read their work.

But you will, if these sorts of rulings stand. Everyone will try and "license" their product rather than sell it to prevent the used-market sales. Books? No, you bought a non-transferable license to that block of paper - you're not allowed to resell it. Your friend will have to buy a brand new copy. Of course, your license doesn't entitle you to any sort of support or warranty, either.

The only things that will be sold under that plan are pure consumables - food, electricity, that sorta thing.

This software came in a physical form. So there had to be a sale. Someone should inform the Supreme Court and Autodesk, that they have just failed to remember the definitions of the words they are using

Muahahaha! They're falling right into my trap!

Soon my pretties, soon!

anyGould:

Serris:

when you buy a book, read it, and then want to sell it, then that's perfectly normal. it allows other people to enjoy a book, they get a lower price, and you get some money back.
but you don't see authors in an uproar, telling people they only bought the license to read their work.

But you will, if these sorts of rulings stand. Everyone will try and "license" their product rather than sell it to prevent the used-market sales. Books? No, you bought a non-transferable license to that block of paper - you're not allowed to resell it. Your friend will have to buy a brand new copy. Of course, your license doesn't entitle you to any sort of support or warranty, either.

The only things that will be sold under that plan are pure consumables - food, electricity, that sorta thing.

Any attempt to limit the aftermarket redistribution of books will be bitchslapped with the fact libraries exist, are government entities, are a staple of civilization, etc.

Not to mention, every read of a book damages it. How much depending on the person. Libraries typically sink thousands into repair, maintenance, and occasionally, digitization of books. Paper rots, ink fades, bindings break, glue breaks down. Meaning used books are worth less than even what used book stores charge for them.

While video games... are not damaged by plays, are subject to a very limited number of rare denigration issues (DVD rot being more a symptom of improper storage or weird chemical reactions in the glue). They are consumable products not affected in any real way by the act of consumption. Which makes them utterly unique and entitled different treatment than any other product in existence.

Fensfield:
-snip-

Without the used aftermarket, its in the best interest of developers/publishers to re-release games the same way print publishers commission multiple printings of books.

I have a question perhaps someone can answer?
I can see this having an effect on american resale markets, but when exactly did laws in one country suddenly become "global law?"

The way people talk, this ruling could effect the ENTIRE GAME MARKET of the WORLD.
Even if this stands in America, it wouldn't necessarily mean the same thing in Britain, France, South Africa, South Korea, or any other gaming market.

HyenaThePirate:
I have a question perhaps someone can answer?
I can see this having an effect on american resale markets, but when exactly did laws in one country suddenly become "global law?"

The way people talk, this ruling could effect the ENTIRE GAME MARKET of the WORLD.
Even if this stands in America, it wouldn't necessarily mean the same thing in Britain, France, South Africa, South Korea, or any other gaming market.

Precisely. One of the perks of living in Mexico is that one always knows how to get to the local black market for, uh, specific needs -- it's ingrained in our culture. This won't bother us.

HyenaThePirate:
I have a question perhaps someone can answer?
I can see this having an effect on american resale markets, but when exactly did laws in one country suddenly become "global law?"

The way people talk, this ruling could effect the ENTIRE GAME MARKET of the WORLD.
Even if this stands in America, it wouldn't necessarily mean the same thing in Britain, France, South Africa, South Korea, or any other gaming market.

Here's the thing; if I understand it right; if something flies legally in one country more often than not other countries that hold similar sets of laws and government systems will attempt to do the same thing. There's also the fact that there are treaties between countries and all one country needs to do to place pressure on the other is to play the "you're violating our treaty" card.

Thus it's reasonably safe to assume that should something of this magnitude occur in one country (specifically the country who has more guns than it does sane people) other countries will begin to follow suite as the industry puts pressure on politicians and the politicians in turn place pressure on global leaders.

At first I was mad at this, but then I realized that it was implied that this would only apply to retailers. In that case, I could care less if GameStop can't sell used games anymore.

This is stupid... people can resell movie and music disks, it should apply to software too. Damn lobbyists. Those corporate bastards are going to get what they want because the courts and lawyers are in their pockets and people won't do anything because it would involve getting away from in front of the computer

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