Re: Consideration in a Shrinkwrap Contract

At 10:07 AM -0400 9/27/00, David Hale wrote:
> But the question
>that must be answered to persuade me is this: what exactly is it that the
>"most people" whom we are both conjuring believe they are purchasing?
>
>I believe there are three possibilities:
>1. Absolute ownership of the software contained on the CD, including the
>right to redistribute at will and prevent others from redistributing.
>This is obviously contrary to copyright law, since assignments of this
>complete set of rights must be in writing.
>2. The right to use the program they have purchased in strict compliance
>with the copyright law, no more, no less, and certainly without any regard
>for UCITA.
>If so, they have purchased a shiny piece of plastic, because the program
>cannot function without making a copy. Let's not even start suggesting an
>implied license, because that leads directly into the third possibility...

You have to look at sec. 117. The "owner" of a "copy" can make another copy "as an essential step in the utilization of the computer program..." The shrinkwrap debate really goes to whether the license can enforceably impose restrictions on the use of the program or disposition of the copy in ways that expand the author's rights under 106 or constrict fair use/first sale rights.

For example, can a license restrict use to a single user on a stand-alone machine, or does the "essential step in utilization" include installation on server connected to 20 terminals, or even on a website connected to 200 million terminals (Zeidenberg). Or can a license enforceably protect trade secrets by forbidding de-compilation notwithstanding that it is arguably, in some circumstances at least, protected as a fair use. Or, at the furthest edge of the debate, can the license withhold "owner"-ship of the copy to prevent resale.

There are two issues: 1) can a licensor contract "around" the Copyright Act because the Copyright Act only sets up default rules; and 2) if and to the extent you can contract around the Copyright Act, does a shrinkwrap license suffice. With respect to the first issue, you have to distinguish between a) licenses which purport to alter express restrictions on the author's exclusive rights, such as fair use and first sale; and b) licenses which impose controls on the use of the software which are beyond the author's expressly exclusive rights, such as a single user limitation.

John Noble Received on Thu Sep 28 2000 - 16:54:25 GMT