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Autodesk Wins Appeal: Software Is Licensed, Not Sold

Timothy Vernor ran a store on eBay where he sold secondhand software, including products by Autodesk (ADSK) that he had purchased at yard and office sales. According to the Ninth Circuit Court of Appeals, what Vernor did is illegal. That's because, the court ruled that when the people and companies who sold Vernor the Autodesk products "bought" the software, they actually didn't -- instead, they licensed it. Since they licensed it, they didn't have any right to resell it to Vernor, who also didn't have the right to resell it on eBay.

Vernor's attorneys at Public Citizen say Vernor will ask the whole Ninth Circuit to consider the case because this decision was rendered by a panel. If he loses at that stage, he may take it to the Supreme Court. And if he were to lose there, then a longstanding, commonsense part of copyright law will be destroyed.

Copyright law allows people who bought copyrighted material to resell it as long as no copies are made, under the "First Sale Doctrine." If you own it, you can dispose of it as you wish: sell it, loan it, whatever. It's the principle that allows libraries to loan books.

As Public Citizen notes, since any copyright owner can distribute any "fine print" document with its copyrighted work that it wants, nothing stops music, video, book or other copyright holders from attaching similar license "agreements," which would jeopardize all sorts of resale markets. Even Autodesk's attorney acknowledged that e-book owners might do that, reported Am Law Litigation Daily. As books increasingly shift toward the electronic medium, it's possible to imagine a world in which libraries can't loan out lots of titles. Way to go, Ninth Circuit.

This isn't the first time the Ninth Circuit has undermined the First Sale Doctrine. Public Knowledge and the Electronic Frontier Foundation have both urged the Supreme Court to reverse the Ninth Circuit's holding that the First Sale Doctrine doesn't apply in the context of goods made overseas. In that case the court decided that if the good was made overseas, it wasn't made pursuant to U.S. copyright law, and so the First Sale Doctrine doesn't apply. That decision also affects resellers, whether on eBay or Main Street, because so many goods are made overseas.

Deceptively Profiting at Dead Soldiers' Expense Isn't Necessarily Illegal

Prudential and MetLife have come under fire for the way they handle life insurance proceeds, including those from policies sold to soldiers. Although beneficiaries believe they are getting the full payout at once, and that payout is placed in an FDIC-insured account, they're not. Beneficiaries are given access to all the proceeds, but until they take all the money, it sits in accounts at the insurers that are not FDIC-insured, earning much less interest than Prudential and MetLife make investing the money.

A case challenging the practice was just dismissed in Nevada. The federal judge held that the beneficiary didn't have the special relationship necessary to sue, reports Bloomberg, even though MetLife's account holding the money was "inherently deceptive" because its title suggested the money was FDIC insured.

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IF this is the case, then under law, if i buy "say windows XP OEM" from a store, and install it on one machine, and the licence is MINE, then i should be able to install it on as many machines as i want, one at a time not all together as the licence states. Which at that point it is the same thing, i own the licence so it is Legal, however it is not legal to do this, as they state that the licence is to be installed on one machine, and no other machines ever. This is BS, if you buy it and own the licence, and then uninstall it so it is no longer being used, it should be allowed to be sold. It should also fall into a different scenario when the software is outdated. In other words if i own a computer that is 10+ years old and i want to buy outdated software to run on it, and they no longer sell that software, how else am i supposed to get it, other then used. Take video games, sierra is out of business, but the software is still out there, they dont see it new, but i want to buy it. Where else would you get it? Additionally look at XBOX and PS3 etc games. There are plenty of places that sell used games, the licence is owned by the person who originally purchased it? But then why can i sell it to Gamestop? Realistically if it is only installed on one machine it should not matter who has it.

September 13 2010 at 9:18 AM Report abuse +1 rate up rate down Reply

Prudential and MetLife are scum! Why are there no Congressmen SCREAMING FOUL HERE? A soldier gets killed in action and his widow DOESN'T GET HIS LIFE INSURANCE?? She gets access to the funds like a checking account, makes NO INTEREST and the insurance companies keep the money and invests it and MAKES MILLIONS ON DEAD SERVICEMEN AND WOMEN. WHERE THE HELL IS CONGRESS. I KKNOW, IN THE INSURANCE COMPANIES POCKETS!!!

September 13 2010 at 8:18 AM Report abuse rate up rate down Reply

Ebay will suffer from panic selling..................what a disaster !

September 13 2010 at 12:49 AM Report abuse +1 rate up rate down Reply