Do you own or "license" software? - important case tests industry model | Hacker News Reader

Do you own or "license" software? - important case tests industry model

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55 pointsgrellas31 comments

The autodesk case is linked with both MDY vs Blizzard and UMG vs Augusto.

Cliffnotes:

Autodesk case is about this guy, vernor, who went around buying legit copies of autocad at tag sales and the like and reselling them on ebay. The autodesk license says you cant resell it. They sued vernor and lost, now its on appeal.

UMG vs augusto is about how they sent out "promo" CD's that said "not for resale". Augusto did it anyways.

MDY vs Blizzard is about how MDY made cheats for WoW. Blizzards TOS for WoW says that cheats are not allowed. WoW charges xx$ /month and is a continuing service, despite having a initial software.

Anyways.

I think its likely we will see the first sale doctrine applied for both autodesk and UMG. We will get a clear ruling that a EULA can not upset the rights of buying a product. If I buy a Ford Taurus, I can do whatever I want to that car and add any modification I want to it. Turbo chargers or extra wide tires. I can even throw a Ferrari logo on it.

With that fact in mind, I think that the first 2 rulings will be for vernor and augusto.

In regards to MDY- I believe the result will go to Blizzard. WoW users have to continue paying to use WoW and its evident they dont own it, but license it.

The basics of this is :

If it smells like you dont own the software, you likely dont. (ie- paying monthly or a primarily online service)

If it smells like you DO own the software (IE- buying a copy of autodesk which you never have to pay for again and provides free updates (or no updates) then regardless of what the license says, you do own it.

I agree with the concept of your breakdown for own vs. license. However in order for it to be legalized you would need to set the conditions for when a software "smells like you don't own" it. This is inherently large to do and leads to 10s of pages of legalese attempting to describe a simple idea.

I think its simpler than you would assume.

If the product depends on a persistent relationship (ie- a subscription to WoW or even in the case of something like steam- You dont pay anything to continue using it, but the service depends on your continuing relationship) Then I think a EULA is binding- You are actually licensing something- The fact that the service is free isnt a issue.

However, the practice of licensing what should actually be sold will end. If you go to best buy and buy a copy of Tetris, for all intensive purposes that is a sale. There isnt any online environment thats needed. There isnt a subscription to it. Its just a purchase.

Anyways, to answer your question. I think the defining method of what will make something "eula capable" will be if it requires a continuing relationship. In the case of software, it might be simpler to say "Does this software require the internet to work" - If the answer is no, then its most definitely a sale and not a license.

Ugh. I agree with your reasoning, but that seems like it will inevitably lead to companies implementing the kind of DRM nobody wants where the software has to phone home every time it starts up, just so they can enforce their license terms.

But then we have a good argument for a DMCA exemption. If the DRM exists solely to circumvent a federal court ruling and the well-defined first sale doctrine, then it should be easy to get the copyright office to allow an exemption.

Or you could just break the DRM in a country other than the US.

My printer requires me to have a continuing relationship with the manufacturer to get replacement cartridges, is it just licensed? IMO your WOW analogy is specious, the freely provided service is a separate entity to the software product I buy in the shop - I still have the software to use (as much as that is or isn't possible) regardless of whether the company continue to supply their free online services.

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Aside:

>for all intensive purposes

"intents and purposes"

I don't normally complain, but as you're into word definitions in your post it seemed apt.

"My printer requires me to have a continuing relationship with the manufacturer to get replacement cartridges."

I don't think this meets the standard of a continuing relationship. Couldn't you have them refilled at Wal-Green's? Or buy a lifetime supply?

Your analogy has the benefit of not being specious; it's just completely missing the point. Support from your printer manufacturer is an ongoing relationship, but the only thing tying you to them is your desire to overpay for ink. You could easily get ink from other places.

With WoW, how many other vendors are able to continue providing an Azeroth for you to craft your wars?

The software you buy for WoW is clearly marked that it has no functionality outside of online play. It's client software that connects to the WoW "service" on Blizzard "servers." You are paying for the service, since you can download the same client software for free on Blizzard's website. I'm guessing that, like Eve Online, any retail purchase equals the equivalent game time.

The ongoing relationship is only relevant to the extent that mutual agreement must be maintained to keep the relationship alive; the conditions that the parties agree to are terms of service, not a license agreement, and apply to the relationship itself.

Blizzard may be entirely within their rights to suspend your World of Warcraft account if you connect to their servers with a hacked client. But they still wouldn't have any legal right to control what you do with the bits on your own hard drive.

The pro-EULA argument is that they could claim that right either way.

"I can even throw a Ferrari logo on it."

Ford couldn't stop you from doing that, but Ferrari could.

No I think neither can, but both can stop you from selling the result.

You own a copy of the software, and when you install it, you are presented with limitations which, if you agree to them, are binding only in the context of using the software. Outside those boundaries, any limitations do not apply. You can restrict your users by making them agree that your software cannot be used for commercial purposes, for example, but you can't make them agree to terms that apply when they are not using the software, such as a restriction from reselling the installation discs after they have stopped using it. It's when they use the software after having resold the discs that they might be said to be infringing a usage contract.

A contract of adhesion, though: http://en.wikipedia.org/wiki/Standard_form_contract

Compelling reason to do SaaS #4972...

That was my first thought.

Compelling reason to avoid SaaS #1.

This doesn't make sense. With SaaS, you don't possess any software, so how can you argue that you should have the ability to transfer it. What would you transfer?

SaaS is also different because you rarely pay the large amounts which make it feel like you own software. You are merely renting it.

You may as well argue that it bugs you to rent a house, since you can't sell it. Of course you can't sell it, you never bought it.

The problem is that the terms of use can change at any time. If I'm choosing infrastructure for my business, for example, I can't be sure I've got a handle on costs if I'm dependent on the availability of a bunch of SaaS services that can change their terms or go out of business at any time. If I use locally-controlled software instead, I can be assured that it will keep running as long as my server keeps running. The goal is to avoid points of failure that can bring your whole infrastructure down.

Sure, there are lots of reasons to avoid SaaS, that just wasn't one of them.

In my mind cases like this (even this case) represent the most important issue we need to fix (before any attempt is made on copyright/software patents) - or at least get drummed out of boundaries as "something we could sue for"

I'm confident it will come out right, but sometimes you never can tell with these things :)

Seems to me that as long as the number of users per license/copy stays the same AutoDesk shouldn't have a case. The person taking the loss is whoever sold the copy for less than it's worth. Where I work expensive software like EE/CAD tools are either on a license server, node-locked or have a dongle. That makes things clean.

The point about the academic discounts is a good one, though. Seems reasonable that those copies should not be resellable.

On the last point, is there a reason it should be different for software than books? Publishers can't put resale restrictions even on specially discounted books (e.g. professor-only copies of textbooks or something).

Only in so far that academically discounted copies of AutoCAD or PhotoShop are valued much higher by the general public than college textbooks.

Probably the best solution would be to not allow any resale restrictions and change the academic software model to one where you can get a temporary license that expires after a year or something similar.

The Academic Copies of AutoCad print watermarks when the drawings are plotted. If entities created in an academic version are brought into the database of an existing drawing, the watermark also prints. In otherwords, the market value of academic versions is limited (though this was not the case 20 years ago). In addition, Autodesk typically sells subscriptions to its academic software, not licenses.

Their arguement, does not reflect the facts as one might say.

No - but they could issue you a copy of a book with a negotiated agreement between the two of you that you would not copy and/or resell the book, and that it was for your use only - say to proofread a copy, or keep something secret.

That can't happen simply by printing "not for resale" inside the book - but it can certainly happen during binding contract negotiation.

Right, but in most of those cases wouldn't they be limited in only seeking a remedy with the party that violated the agreement?

A Canadian exception to this was when a retail store sold some Harry Potter books ahead of the worldwide release time.

Non-transferable licenses should be made illegal.

If they're "established" through contracts of adhesion (http://en.wikipedia.org/wiki/Standard_form_contract) absolutely, and we're expecting/hoping the 9th will uphold the district's summary judgment, at least in principle (if they get into some of the "where do you draw the line" stuff, they might remand it to the district court for a finding of fact, they're only supposed to make findings of law).

However, let's say I spend a month with an Oracle salesman and we cut a negotiated $$$ deal that's expressed in a normal contract; that's a very different thing from the sale of a shrink-rapped package like these AutoDesk copies. I don't find those unconscionable (http://en.wikipedia.org/wiki/Unconscionability).

Indeed! The importance of this distinction is too often ignored in press articles.

One complication is whether it is a shrink-wrap license bought in a store (therefore with reasonable opportunity to read the terms) or a shrink-wrap license bought by title/SKU# and delivered by mail. The former would appear to be more enforceable.

In my experience, it's usually been the other way around. When I order online, I often get to read the license on the web site, whereas when I buy in a brick-and-mortar store, I cannot see the license terms without opening the package, which I am not allowed to do before buying it (hence the term "shrink-wrap license").

Like many controversial debates, there is no obviously right answer here. Ultimately it will be however we as a society decide how to treat it. (Well, indirectly through Congress and the Courts, and of course distorted through the lens of wealthy special interests and their lackeys.)

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