

Do you own or "license" software? - important case tests industry model - grellas
http://www.law.com/jsp/lawtechnologynews/PubArticleLTN.jsp?id=1202462605257

======
DanBlake
The autodesk case is linked with both MDY vs Blizzard and UMG vs Augusto.

Cliffnotes:

Autodesk case is about this guy, vernor, who went around buying legit copies
of autocad at tag sales and the like and reselling them on ebay. The autodesk
license says you cant resell it. They sued vernor and lost, now its on appeal.

UMG vs augusto is about how they sent out "promo" CD's that said "not for
resale". Augusto did it anyways.

MDY vs Blizzard is about how MDY made cheats for WoW. Blizzards TOS for WoW
says that cheats are not allowed. WoW charges xx$ /month and is a continuing
service, despite having a initial software.

Anyways.

I think its likely we will see the first sale doctrine applied for both
autodesk and UMG. We will get a clear ruling that a EULA can not upset the
rights of buying a product. If I buy a Ford Taurus, I can do whatever I want
to that car and add any modification I want to it. Turbo chargers or extra
wide tires. I can even throw a Ferrari logo on it.

With that fact in mind, I think that the first 2 rulings will be for vernor
and augusto.

In regards to MDY- I believe the result will go to Blizzard. WoW users have to
continue paying to use WoW and its evident they dont own it, but license it.

The basics of this is :

If it smells like you dont own the software, you likely dont. (ie- paying
monthly or a primarily online service)

If it smells like you DO own the software (IE- buying a copy of autodesk which
you never have to pay for again and provides free updates (or no updates) then
regardless of what the license says, you do own it.

~~~
mikeknoop
I agree with the concept of your breakdown for own vs. license. However in
order for it to be legalized you would need to set the conditions for when a
software "smells like you don't own" it. This is inherently large to do and
leads to 10s of pages of legalese attempting to describe a simple idea.

~~~
DanBlake
I think its simpler than you would assume.

If the product depends on a persistent relationship (ie- a subscription to WoW
or even in the case of something like steam- You dont pay anything to continue
using it, but the service depends on your continuing relationship) Then I
think a EULA is binding- You are actually licensing something- The fact that
the service is free isnt a issue.

However, the practice of licensing what should actually be sold will end. If
you go to best buy and buy a copy of Tetris, for all intensive purposes that
is a sale. There isnt any online environment thats needed. There isnt a
subscription to it. Its just a purchase.

Anyways, to answer your question. I think the defining method of what will
make something "eula capable" will be if it requires a continuing
relationship. In the case of software, it might be simpler to say "Does this
software require the internet to work" - If the answer is no, then its most
definitely a sale and not a license.

~~~
pbhjpbhj
My printer requires me to have a continuing relationship with the manufacturer
to get replacement cartridges, is it just licensed? IMO your WOW analogy is
specious, the freely provided service is a separate entity to the software
product I buy in the shop - I still have the software to use (as much as that
is or isn't possible) regardless of whether the company continue to supply
their free online services.

\---

Aside:

> _for all intensive purposes_

"intents and purposes"

I don't normally complain, but as you're into word definitions in your post it
seemed apt.

~~~
pixelbath
Your analogy has the benefit of not being specious; it's just completely
missing the point. Support from your printer manufacturer is an ongoing
relationship, but the only thing tying you to them is your desire to overpay
for ink. You could easily get ink from other places.

With WoW, how many other vendors are able to continue providing an Azeroth for
you to craft your wars?

The software you buy for WoW is clearly marked that it has no functionality
outside of online play. It's client software that connects to the WoW
"service" on Blizzard "servers." You are paying for the service, since you can
download the same client software for free on Blizzard's website. I'm guessing
that, like Eve Online, any retail purchase equals the equivalent game time.

------
WiseWeasel
You own a copy of the software, and when you install it, you are presented
with limitations which, if you agree to them, are binding only in the context
of using the software. Outside those boundaries, any limitations do not apply.
You can restrict your users by making them agree that your software cannot be
used for commercial purposes, for example, but you can't make them agree to
terms that apply when they are not using the software, such as a restriction
from reselling the installation discs after they have stopped using it. It's
when they use the software after having resold the discs that they might be
said to be infringing a usage contract.

~~~
hga
A contract of adhesion, though:
<http://en.wikipedia.org/wiki/Standard_form_contract>

------
patio11
Compelling reason to do SaaS #4972...

~~~
WiseWeasel
Compelling reason to avoid SaaS #1.

~~~
pbiggar
This doesn't make sense. With SaaS, you don't possess any software, so how can
you argue that you should have the ability to transfer it. What would you
transfer?

SaaS is also different because you rarely pay the large amounts which make it
feel like you own software. You are merely renting it.

You may as well argue that it bugs you to rent a house, since you can't sell
it. Of course you can't sell it, you never bought it.

~~~
WiseWeasel
The problem is that the terms of use can change at any time. If I'm choosing
infrastructure for my business, for example, I can't be sure I've got a handle
on costs if I'm dependent on the availability of a bunch of SaaS services that
can change their terms or go out of business at any time. If I use locally-
controlled software instead, I can be assured that it will keep running as
long as my server keeps running. The goal is to avoid points of failure that
can bring your whole infrastructure down.

~~~
pbiggar
Sure, there are lots of reasons to avoid SaaS, that just wasn't one of them.

------
ErrantX
In my mind cases like this (even this case) represent _the_ most important
issue we need to fix (before any attempt is made on copyright/software
patents) - or at least get drummed out of boundaries as "something we could
sue for"

I'm confident it will come out right, but sometimes you never can tell with
these things :)

------
zwieback
Seems to me that as long as the number of users per license/copy stays the
same AutoDesk shouldn't have a case. The person taking the loss is whoever
sold the copy for less than it's worth. Where I work expensive software like
EE/CAD tools are either on a license server, node-locked or have a dongle.
That makes things clean.

The point about the academic discounts is a good one, though. Seems reasonable
that those copies should not be resellable.

~~~
_delirium
On the last point, is there a reason it should be different for software than
books? Publishers can't put resale restrictions even on specially discounted
books (e.g. professor-only copies of textbooks or something).

~~~
dedward
No - but they could issue you a copy of a book with a negotiated agreement
between the two of you that you would not copy and/or resell the book, and
that it was for your use only - say to proofread a copy, or keep something
secret.

That can't happen simply by printing "not for resale" inside the book - but it
can certainly happen during binding contract negotiation.

~~~
hga
Right, but in most of those cases wouldn't they be limited in only seeking a
remedy with the party that violated the agreement?

A Canadian exception to this was when a retail store sold some Harry Potter
books ahead of the worldwide release time.

------
DannoHung
Non-transferable licenses should be made illegal.

~~~
hga
If they're "established" through contracts of adhesion
(<http://en.wikipedia.org/wiki/Standard_form_contract>) absolutely, and we're
expecting/hoping the 9th will uphold the district's summary judgment, at least
in principle (if they get into some of the "where do you draw the line" stuff,
they might remand it to the district court for a finding of fact, they're only
supposed to make findings of law).

However, let's say I spend a month with an Oracle salesman and we cut a
negotiated $$$ deal that's expressed in a normal contract; that's a very
different thing from the sale of a shrink-rapped package like these AutoDesk
copies. I don't find those unconscionable
(<http://en.wikipedia.org/wiki/Unconscionability>).

~~~
Daniel_Newby
Indeed! The importance of this distinction is too often ignored in press
articles.

One complication is whether it is a shrink-wrap license bought in a store
(therefore with reasonable opportunity to read the terms) or a shrink-wrap
license bought by title/SKU# and delivered by mail. The former would appear to
be more enforceable.

~~~
dhume
_One complication is whether it is a shrink-wrap license bought in a store
(therefore with reasonable opportunity to read the terms) or a shrink-wrap
license bought by title/SKU# and delivered by mail. The former would appear to
be more enforceable._

In my experience, it's usually been the other way around. When I order online,
I often get to read the license on the web site, whereas when I buy in a
brick-and-mortar store, I cannot see the license terms without opening the
package, which I am not allowed to do before buying it (hence the term
"shrink-wrap license").

------
mkramlich
Like many controversial debates, there is no obviously right answer here.
Ultimately it will be however we as a society decide how to treat it. (Well,
indirectly through Congress and the Courts, and of course distorted through
the lens of wealthy special interests and their lackeys.)

