Today the European Court of Justice ruled that software is like a book. Once you buy it, you can lend it, you can resell it, you can light it on fire, you can lose it, you can laugh when it crashes your computer, and you can transfer it electronically. Although the Court was far too recondite to articulate the true implication of their ruling, the upshot really is that – at least in the EU – if you buy software, you “own” it.
What does this mean for practical purposes?
It means you (the European you, anyway) can now resell not only your CDs, DVDs, Sims Games, WoW, and other trifles on eBay, you can also sell: (a) your old version of Adobe Reader Pro; (b) your installation disk for Snow Leopard; (c) the 5-disk Rosetta Stone package you bought when you thought you would learn French; (d) that novel writing program you got for Christmas but could never really get into; (e) your iPod downloads; (f) your e-books; and (f) all the other software whose “clickwrap” licenses forbade you from ever even thinking about transferring it to someone else once you got bored, tired, irritated, or simply upgraded to a system which was no longer compatible with the product.
For those of you who thought you could blithely sell these things anyway (i.e., prior to this ruling), please take note of the fact that you could not. If you did, you did so at your peril.
The current rule in the United States is contrary to the European rule, with the vast majority of the courts to have considered the issue holding that software is something that is “licensed” rather than “owned,” and that the First Sale Doctrine – which provides that copyright holders may only control and impose limits on the “first sale” of their goods – does not apply to software. (See, e.g., Vernor v. Autodesk).
What does the new law mean for intellectual property, apart from the obvious fact that the goal of having uniform copyright laws remains elusive? Well, it could mean that it is now legal for a United States citizen to buy or resell used software in the EU, or that it is legal to download it from an EU server.
Will Oracle sue a U.S. citizen for doing so? Probably.
Will the United States government take the position that the EU rule does not apply to products shipped to the U.S. or downloaded to any U.S. server? Maybe. The federales have been known to get fairly aggressive with offshore companies which may or may not abide by United States copyright laws and may or may not incur liability as a result (see, e.g., Rojadirecta.org and/or Megaupload).
The only sure bet is that the ruling — whether you like it, hate it, agree or disagree — is going to create turmoil in the market for years to come. So prepare yourself. As the Chinese are wont to say, in chaos lies opportunity.
I am a commercial litigator and intellectual property lawyer in Orange County. Although my practice encompasses a wide variety of business disputes, I have a particular fondness for, and am prone to wax philosophical on, the subjects of copyright and trademark infringement in music, literature, art, and film.