In a recent decision by a Ninth Circuit panel of judges, the resale of packaged software via an online auction site was not protected by the “first sale” doctrine under the Copyright Act because the transaction between the software vendor and the purported reseller was a license not a sale.
The “first sale” doctrine “allows owners of copies of copyrighted works to resell those copies” without incurring liability to the copyright owner.
The panel, relying on the specific terms of the software license agreement at issue, determined that a “software user is a licensee rather than an owner of a copy where the copyright owner: (1) specifies that the user is granted a license; (2) significantly restricts the ability to transfer the software; and (3) imposes notable use restrictions.”
This ruling could prove beneficial to software vendors and developers in the policing of subsequent sales of its software.
The ruling, however, will only be valuable if a software vendor or developer has an artfully drafted software license agreement that meets the test articulated by the panel.
To read the panel’s decision, please see: http://www.ca9.uscourts.gov/datastore/opinions/2010/09/10/09-35969.pdf« Back to news