posted by Thom Holwerda on Fri 10th Sep 2010 23:38 UTC
IconEULAs, and whatever nonsense they may contain, are legally binding in the US. Have a great weekend!


Bam!

Remember the Vernor v. Autodesk case? We talked about this one before - about a year ago, a US judge sided with Vernor, declaring that software is sold, not licensed. I think I need to freshen everyone's memory up a bit on this one, so let's get going.

Timothy Vernor had bought up several disks, including the licenses, of Autodesk's AutoCAD software from an architecture firm. The software was no longer in use, so Vernor figured he could easily resell it on eBay. Autodesk, however, did not agree with this, arguing that the software was licensed, not sold; the license was non-transferable, old copies had to be destroyed, and you could not carry the physical disks outside of the Western hemisphere (I'm not making this up). Vernor was violating the license, Autodesk stated, and issued a DMCA takedown.

Vernor, for his part, then sued Autodesk, arguing that he never agreed to anything - he didn't actually use the software, he merely bought it only to resell it straight away. This case has been going through the courts for a while now. About a year ago, judge Richard A. Jones, after seeing the undisputed facts, sided with Vernor on every possible account, making it very clear that while Autodesk owns the copyright to AutoCAD, the copies in question belonged to Vernor. This was a slam-dunk win, but Autodesk appealed.

And now we're here: the US Court of Appeals for the Ninth Circuit has today overturned Judge Jones' decision on every possible account, siding with Autodesk all the way (.pdf version of the ruling). The court argues that the First Sale doctrine does not apply in this case, because Vernor had not bought the software from legitimate owners - the architecture firm had merely licensed the software.

The court further stated that whatever is in the license is binding, no matter how ridiculous. A ban on resale? A ban on lending? A ban on carrying the physical disks outside of the Western hemisphere? Forcing people to phyisically destroy their old disks? All perfectly legal, according to the court. In the official words of the courts:

We determine that Autodesk's direct customers are licensees of their copies of the software rather than owners, which has two ramifications. Because Vernor did not purchase the Release 14 copies from an owner, he may not invoke the first sale doctrine, and he also may not assert an essential step defense on behalf of his customers. For these reasons, we vacate the district court's grant of summary judgment to Vernor and remand for further proceedings.

The court has devised a test to determine whether software is sold or licensed. "First, we consider whether the copyright owner specifies that a user is granted a license. Second, we consider whether the copyright owner significantly restricts the user's ability to transfer the software. Finally, we consider whether the copyright owner imposes notable use restrictions."

So, there you have it.


Bikes and cars

And I haven't even touched upon the part of the ruling that really scared the living daylights out of me. The ruling also addresses the "significant policy considerations raised by the parties and amici on both sides of this appeal". Siding with Autodesk we have the Software & Information Industry Association and the Motion Picture Association of America - whose arguments all align perfectly with the court decision.

On the side of Vernor we have eBay and the American Library Association, who argue that ruling against Vernor will seriously hurt libraries and the creation of secondary markets for copyrighted works.

The ruling simply dismisses Vernor's, eBay's and the ALA's arguments without even looking at them. The court focuses on two precedents from the same court, Wise and the MAI trio, and tries very hard to make their current decision compatible with those two precedent cases. "These are serious contentions on both sides, but they do not alter our conclusion that our precedent from Wise through the MAI trio requires the result we reach," the court states.

This seems odd to me. Someone obviously has to enlighten me on this, but if Wise and the MAI trio were ruled by the same court, and were apparently policy-setting, shouldn't it then be possible for the court to re-evaluate these rulings in light of our new digital age? I mean, Wise is from 1977, and the MAI trio from 1993, 1995, and 2006.

Which brings me to the final issue that I personally have with a ruling like this. Here in The Netherlands we have a traffic rule which states that in case of an accident between a motorised vehicle and a non-motorised participant (pedestrian or a bike), the burden of proof always lies with the motorised vehicle, because motorised vehicles pose additional risks to pedestrians and bikes, who are classified as "weaker" traffic participants. This rule acknowledges that e.g. car drivers carry additional responsibilities.

When I read about disputes between individuals and large companies or government institutions in The Netherlands, I get the feeling that the same mentality is prevalent in the Dutch court system; i.e., a mentality to protect the weaker of the two parties - in this case, the individual. That is, a court decision should not unfairly burden an individual when the damage done to the large company or government institution is minimal by comparison.

In the case of Vernor v. Autodesk, it would seem that the damage done to Autodesk is pretty much zero, while the benefits of allowing software - and other copyrighted works - to be resold unconditionally far outweigh the damage done to Autodesk. As such, it just seems fairer - in the short and long run - for the court to side with Vernor. It just makes more sense.

Remember, siding with Vernor would be just as possible within US law as siding with Autodesk - it's the precedent cases that make the deal here. You'd think these older decisions ought to be viewed in a different light after the digital revolution.

In any case, only Congress can do anything about this now (note from OSNews reader chandler: "Absolutely wrong. This was a ruling by a panel of the 9th circuit. It can be overturned in an en banc hearing or by the Supreme Court - and an en banc hearing is plausible if it contradicts previous rulings of the 9th circuit."). Whatever is in an EULA is now legally binding, the large corporations win again, and the consumer can suck a big fat popcicle. With this ruling, I think pretty much every OSNews reader has been turned into a criminal - I can assure you each and every one of us has, at one point, violated one of the licenses of our software.

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