Vernor Wins; Customers Win

A judge decided today that Tim Vernor did not contravene the USA Copyright Act, when he resold AutoCAD software he apparently picked up at garage sales. The judge told Autodesk to back off harassing him.

From Owen Wengerd's CAD/court:

"The court declares that Plaintiff's [Vernor's] sales of Defendant's [Autodesk's] copyrighted AutoCAD software do not violate the Copyright Act to the extent Plaintiff [Vernor] acquired them in the manner described in the order. Defendant [Autodesk] is hereby enjoined from asserting its rights under the Copyright Act as a basis for preventing or otherwise hindering Plaintiff's [Vernor] sales of AutoCAD software."

(The back story: With the assistance of the EFF Public Citizen, Vernor had taken on Autodesk, to stop the billionaire corporation interfering with his used AutoCAD sales on eBay. Autodesk had gotten eBay to block Vernor's sales.)

The court agrees that customers can resell software like a book, but in this one specific situation (as I understand it): that you buy the software and then resell it, without reading the license agreement -- which is what Vernor had done. (He is not a CAD user, but a guy who makes an income from finding used software and then reselling it.)

Vernor (and me) figure software should be no different than any other consumer good: buy it, use it, resell it, or toss it. Software companies blanche at the thought of a second-hand software market, which would cut into their sales.

(The most extreme license terms require you to physically return the discs to the software vendor after a certain number of years!)

I am guessing this will go to another level of court, as Autodesk desperately tries to keep its finger in the dike on behalf of all large software corporations against the freeing up of the marketplace. Software resales may become inevitable, however, given today's popularity of reselling used software games, and selling used computers with Windows licenses glued on.

Comments

[Owen Wengerd]

Just a small correction: Vernor is represented by Public Citizen (http://www.citizen.org).

[Curt Moreno]

I don't think that it is fair to villainies Autodesk as the bad guy "billionaire corporation" in this matter. This is just one example of the rift growing between media developers and consumers.

In years past we have seen organizations like the RIAA and MPAA do everything they can to stem the tide of piracy and secondary markets. This is very much akin to what the Writer's Guild attempted in the 80's by trying to sue several second hand book stores.

To assume that a purchase of a consumer product has anything to do with the physical product is errant at best. When a user purchases AutoCAD, Microstation, any software application, song, or movie they have not purchased a "copy" of the product to "buy it, use it, resell it, or toss it". They have purchased a license and entered into an agreement with that media developer to use that piece of IP. As such they are subject the Digital Millennium Copyright Act.

There is no doubt that waters are muddied in a way that the creators of copyright and trademark never intended. The DMCA is a bear of a matter for consumers, developers and middleware developers. Just look at what happened to the Real Corporation with their RealDVD backup solution.
There is also little doubt that Autodesk will appeal the decision.

In the end I would like to side on the side of consumers (and very often common sense) because I happen to be a consumer (with a little common sense). But our court systems are set on a concept of legal procedure and currently that procedure weighs against a good bit of common since.

One thing is certain, copyright and trademark as institutions must change radically and rapidly in order to keep pace with modern media, developers and increasingly tech-savvy consumers.

- Curt Moreno -
The Kung Fu Drafter

[Joe]

The losers are the clone CAD products. They will compete with AutoCAD, AutoCAD LT, and all prior versions of AutoCAD that will become available at deep discounts on eBay.

Allowing secondary sales could also screw the "Autodesk is a monopoly" claim as the total market value of CAD will be much larger than Autodesk's reported revenue. Versions of AutoCAD might be the total market but Autodesk will not have monopoly control as they cannot control secondary product sales.

Autodesk fought to keep secondary sales out of the market. I don't believe the can be punished if secondary sales crush the AutoCAD clone market.

[Adam]

This poses another question, how do you register and activate a license that has already been registered and activated by another company/individual?

If you are not aware of the original purchaser (choosing words carefully here) of the software, Autodesk will not allow another activation code. Secondly if the license has been upgraded and this is an 'upgraded' product, you will be unable to gain an activation code for it. So buyers of 2nd hand Autodesk software would need to be very careful to know the possible problems that would arise from the purchase and how easily they could be duped of their hard earned cash.

Some may say, just transfer the license. Well, has anybody tried to transfer a license of Autodesk software? I can tell you that there are very limited ways in which this will be approved by Autodesk.

So even though this seems to be a win for the consumer, I don't think that it really is as there are many downstream issues that will arise from this.

[Sid]

one more step to making software a typical commodity.

If I can resell a car or a t-shirt, a laptop or a mouse, then why not the software as well?

plus I simply cant understand the issue companies have with this. atleast now there software will be used by somebody...

[Nick Ballard]

Whilst many jump on the anti-big corporation bandwaggon, let us consider what this means. There seems no guarantee that the software has NOT been loaded onto a computer already, and is still fully activated and in use. In which case, Autodesk do have a point since the breaking of the seal on the product implies acceptance of their terms and conditions - or dowe all want to work in a socialist paradise where software is free....? I don't think so!

[R. Paul Waddington]

The comments surrounding Autodesk's original action - against Vernon - and this latest event are often confused by peoples belief in facts that are simply not correct.

For one "breaking the seal" on software does not 'automatically' mean a purchaser has entered into any enforceable agreement or contract with the developer. At best it can be said if you think you are bound then you should behave accordingly. However, very few purchasers of software are actually legally bound to the developer; they are simply trapped by their own misinformed belief in the enforceability of a set of guidelines outlined by the developer, in the EULA, detailing how s/he wants you, the customer, to behave.

Vernon was not a user therefore what would 'normally' apply to a user does not; the court has made that distinction and a sensible ruling.

But Vernon's case had a very important component attached to it, relating directly to the EULAs enforceability and Autodesk avoided that decision being made. THIS WAS THE WIN FOR CUSTOMERS!

Why was that avoidance a win for consumers? Answer, if a decision had been handed down that quashed the EULA the entire 'click thru EULA' software industry would have been affected and that 'had' to be avoided. The software guys want to fight this on their ground not ours.

Sadly that small advantage, 'the win', handed users will be lost due to user apathy and laziness. There is a belief that it's the courts job to sort these issues (the developers preferred ground) but the reality is users have the power both as individuals and collectively to entirely change the way EULA are viewed, understood, used and or enforced. But that can only happen if users choose to make it happen by confronting the issues and taking them directly to the developers.

One course of action can be seen in http://miletter.blogspot.com . What I have done is not my preferred solution. There are a number of reasons I took this route but what all users can now see is that they are NOT powerless when it comes to defining under what conditions they deal with their suppliers; no need to use a court! Users do not like what they see in some EULA (if they read them) nor what they perceive a EULA represents but I am yet to find more than a single individual, or company, prepared to stand up (with me) for their own rights and or what is right for the industry as a whole.

If users keep sitting on their hands, continuing to believe 'they can do nothing' or wait for a court decision, then we will all pay for that stupidity, big time. Vendors and EULA will be empowered by users apathy and inaction and the software guys will use EULA to entrenched actions you WILL regret.

I don't, personally, consider it is important, in this issue, whether you can sell/re-sell software or any other object. All of us can make and sell 'anything' to any person and we have the right to define what happens to that object 'later on' when it is no longer wanted/needed etc. The trick is how the transaction is completed in the first place. e.g. I could be a producer of cars and if at the point of sale the purchaser contractually AGREES not to re-sell the vehicle then he will have no right to do so. Not how cars are 'normally sold' but if is done correctly it is enforceable - this is the link with Vernon and the decision made by the court.

What (sale) may happen at a later date is a direct result of what happens/ed 'before the sale' - herein lays the problem/challenge for software vendors; many EULA are not enforceable as a direct result of the vendors actions. This is neither difficult to solve; nor is it necessary either the vendor or the user be disadvantaged in the solution. There exists a neat, achievable middle road and the only reason it is not trod is because (some) vendors choose to have their users remain trapped in a web of vendor spun miss-information.

[MJ]

Currently when an Autodesk product goes end of life, you have two choices.

1: Upgrade
2: Don't upgrade

If you select No. 2, then thats it, you are stuck with that version for ever, unless you go buy a full new version. That then means in effect you own 2 copies of the same software, just different versions.

By allowing the sale of 2nd hand copies, you will no longer be pushed into upgrading when Autodesk decide to end of life a product. You can wait as long as you want, sell on your exisiting and use that money against the cost of the new copy.

I know plenty or Architects and Engineers who do not need the functionality of Autocad 2010 and are quite happy using Autocad 2004. It does what they need it to do and as small firms, do not see the plus points in upgrading every few years.

Autocad 2010 has plenty of great great features, but not everyone needs them and not everyone wants them. If this ruling sticks, then it means that they can continue using their current software as long as they want to knowing that it is an asset they can sell on when they need want to upgrade.

Anyway, thats just my thoughts...

[ralphg]

Autodesk in Russia recognizes the value in two-year-old versions of the software by selling them for just US$1000. -Ed.