One Thing You Can’t Sell on eBay: Software

September 28, 2010

The Ninth Circuit Court of Appeals recently ruled that reselling software on eBay constitutes copyright infringement. In Vernor v. Autodesk, 2010 WL 3516435, the Court vacated summary judgment for the seller and held that the original purchaser of the software was its licensee rather than its owner, and thus was precluded from reselling the software without the manufacturer’s consent. The Court rejected both the “first sale” doctrine and the “essential step” defense.

What is particularly interesting about this case is its summary and discussion of Ninth Circuit case law concerning the owner vs. licensee status of software purchasers, starting on page 5. Examining a series of cases, the court writes:

We read Wise and the MAI trio to prescribe three considerations that we may use to determine whether a software user is a licensee, rather than an owner of a copy. First, we consider whether the copyright owner specifies that a user is granted a license. Second, we consider whether the copyright owner significantly restricts the user’s ability to transfer the software. Finally, we consider whether the copyright owner imposes notable use restrictions.

You can read more about software licensing agreements in Chapter 10 of the treatise Intellectual Property Licensing: Forms and Analysis, available on Westlaw starting at IPLFA § 10.01. You can also see a few sample software licensing agreements at DLICA FORM 06 and TRDSECRT APP C1.

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