Software Purchases - Sale or Lease

One of the basic premises many software companies use to define their releationship with their users is the idea that users are not really buying their software, but merely leasing or licensing it. This premise allows the software companies certain protections. What it also does is prevent the resale of the software. However with high priced items like Adobe's suite and Autocad, this can be a sticky issue. A recent case where Timothy Vernor and Autodesk have locked legal horns over whether or not he had the right to sell used copies of Autodesk's software, has the potential to overturn this whole premise. Timothy Vernor and his legal reps used the First Sale Doctrine as a basis for fighting Autodesk in court and won.

An article over at Ars Technica discusses this issue in depth, in discussing First Sale Doctrine, the article states:

ensures the right to re-sell used copies of copyrighted works. It is the principle that makes libraries and used book stores possible. The First Sale Doctrine was first articulated by the Supreme Court in 1908 and has since been codified into statute.

Autocad aggresively pursued Timothy Vernor on ebay when he started selling used copies of their software on the Site. They started filing DCMA notices which ended up in the suspension of Vernors account preventing him from carrying out his business. Vernor makes a living from selling items he buys at auctions, flea markets, garage and office sales.

The judge in the case, Richard A. Jones, determined that the sales as such were protected under First Sale Doctrine due to the circumstances under which the software is sold. If this case is appealed and the judge's decision is upheld, this will have far reaching consequences for the industry. This will allow purchasers of software to resell the products they buy but don't use, but it will also mean that software firms might have to start looking at how they licence their products. If they are smart the larger firms will look at opportunities this will offer like selling transfer fees for support and upgrades to new users of old software. It will also create problems such as updating user registries and veryfying transfers with previous or existing users.

This will be a case to watch as it will have a lot of repercussions for us all, user and creator and reseller alike.