So, you saved a bundle of money by buying your computer software on eBay. Got a great deal, right? Maybe, maybe not. (Vernor v. Autodesk, Inc.)
Although the Court’s decision includes a host of tedious details, the essential facts are that Vernor purchased a number of used copies of the Autodesk AutoCAD Release 14 software from one of Autodesk’s direct customers and offered them for sale on eBay. Autodesk sought to block these sales on the grounds that they would constitute an infringement of the software copyright. Vernor argued that, as a purchaser of the subject copies, he had the right – under the “first sale doctrine” – to resell them. He went to court, seeking a declaratory judgment to that effect. The district court agreed. Autodesk appealed.
Reversed. Vernor could not invoke the benefit of the first sale doctrine because he did not “own” the subject copies. “Autodesk distributes Release 14 pursuant to a limited license agreement in which it reserves title to the software copies … Autodesk’s direct customers are licensees of their copies of the software rather than owners …” Since the direct customer did not have title to the software, the transfer to Vernor was not a “sale.” Anyone to whom Vernor subsequently transferred the software would be an infringer of the copyright as well.
THE LESSON TO BE LEARNED: Before buying used software, make sure the “seller” has TITLE to it.