The library association said it feared that the software industry’s licensing practices could be adopted by other copyright owners, including book publishers, record labels and movie studios.
That assertion was not lost on the appeals court, saying Congress is free to modify copyright law “if it deems these or other policy considerations … require a different approach.”
It was believed to be the first appellate ruling directly addressing whether a user agreement could forbid resales of software, though the appellate courts have previously backed companies that have imposed terms on how software may be used. The decision covers the nine western states, including California.
The appeals court reversed a lower court judge that said the first-sale doctrine applied whenever the consumer is entitled to keep the copy of the work, entitling consumers to resell their purchased software at will.
The case concerns Autodesk’s AutoCAD Release 14, which was for sale on eBay. Autodesk, invoking the Digital Millennium Copyright Act, demanded eBay remove the item from the site, and it promptly did in 2007.
Timothy Vernor, the seller, who purchased at least four copies of the software from a company that was required to dispose of the software under a licensing agreement, re-posted the sale and his eBay account was terminated after Autodesk complained. Litigation ensued.
Autodesk, of San Rafael, California, imposed a significant number of transfer restrictions: it stated that the software could not be transferred or leased without Autodesk’s written consent, and the software could not be transferred outside the Western Hemisphere.
The first-sale doctrine of 1909, in its current form, allows the “owner of a particular copy” of a copyrighted work to sell or dispose of his copy without the copyright owner’s authorization. “The first sale doctrine does not apply to a person who possesses a copy of the copyrighted work without owning it, such as a licensee,” the court ruled.
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