RE: Resale of Software

From: Bryan Taylor <bryan_w_taylor[_at_]yahoo.com>
Date: Fri, 21 Dec 2001 16:31:56 -0800 (PST)

My opinion is that the typical single licence EULA *is* rendered unenforcable even if a shrinkwrap licence can create an enforcable contract. Assuming for the sake of argument this very debateable point, you would have to look at the context of the negotiation to identify whether the elements of a contract are present. When the transfer of ownership is a first sale, I believe the garden variety EULA would fail the consideration test because such a licence generally does not offer anything that is not a recognized right of ownership per 17 USC 117. Specifically, the right to make an adaptation of the program for use in a machine is a right the owner already possesses and typically a EULA does nothing other than provide this.

However, and this is important, when the licence in question purports to offer rights to install on multiple machines, then it DOES provide something that is not provided by first sale to the media owner. I believe that the Microsoft v. Harmony case actually pertains to OEM style multiple installation licencing, and is often misinterpreted by the "software is licenced" advocates.

The sad thing about all of this is that if software publishers had simply written their licences as "family" licences or "one home, one work installation" as actually reflects what people do and want, then they could have a very sound footing for their licence restrictions.

• "Baron, Robert (Phila)" <Baron[_at_]ballardspahr.com> wrote:
  > Be careful not to overstate the Court's holding, or gloss over the two key
  > factual findings underpinning the Court's decision to deny Adobe's motion
  > for preliminary injunction on the copyright infringement claim. The Court
  > held, inter alia: (1) the First Sale Doctrine applied because, based on the
  > evidence of the economic reality of the transaction before the Court, "the
  > substance of the transaction at issue here is a sale and not a license"
  > (emphasis added); and (2) Softman was not subject to the terms of the End
  > User License Agreement because it did not assent to it, as assent to the
  > EULA was available only when the software was installed, and Softman never
  > installed the software (rather, it merely purchased a suite of Adobe
  > software, and separately resold the individual programs that made up the
  > suite). Indeed, the Court stated specifically that it "finds it unnecessary
  > to reach the question of the general validity of shrink-wrap licenses at
  > this stage because the Court has determined that Softman is not bound by the
  > EULA because there was no assent to its terms." (emphasis added).
  

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