Federal Court "Software Makers Can Forbid Transfer Or Resale of their Wares"

A federal appeals court said that software makers can use "shrink-wrap" and "click-wrap" licenses to forbid the transfer or resale of their wares, an apparent gutting of the so-called "first-sale doctrine" — an affirmative defense to copyright infringement that allows legitimate owners of copies of copyrighted works to resell those copies. That defense, the court […]

A federal appeals court said that software makers can use "shrink-wrap" and "click-wrap" licenses to forbid the transfer or resale of their wares, an apparent gutting of the so-called "first-sale doctrine" — an affirmative defense to copyright infringement that allows legitimate owners of copies of copyrighted works to resell those copies. That defense, the court said, is "unavailable to those who're only licensed to use their copies of copyrighted works." The 3-0 decision by the 9th U.S. Circuit Court of Appeal, if it stands, means copyright owners may prohibit the resale of their wares by inserting clauses in their sales agreements.

The Software & Information Industry Association, whose members include Google, Adobe, McAfee, Oracle and dozens of others, urged the court to rule as it did. The Motion Picture Association of America also sided with Autodesk.

The case concerns Autodesk's AutoCAD Release 14, which was for sale on eBay. Autodesk, invoking Digital Millennium Copyright Act, demanded eBay remove the item from the site, and it promptly did in 2007. Thus, American Library Association and eBay argued against the outcome.

Reference: 3-0 decision

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