|
A declaratory judgment plaintiff's sale of authentic, used copies of AutoCAD software over eBay was not infringing, because the copyright owner's distribution rights in those particular copies were exhausted under the first sale doctrine, the U.S. District Court for the Western District of Washington ruled May 20. Vernor v. Autodesk, Inc., [WD Wash, 2008].
"Taking direction solely from Wise, the court concludes that the transfer of AutoCAD packages from Autodesk to CTA was a sale," the court said, supporting that determination as follows:
Like the Redgrave Contract, the [AutoCAD Agreement and License with CTA] allowed CTA to retain possession of the software copies in exchange for a single up-front payment. Like the Redgrave Contract, the [ ] Agreement and License imposed onerous restrictions on transfer of the AutoCAD copies. Similar to the salvage transactions in Wise, the License required CTA to destroy the software in the event that it purchased a software upgrade. . . . Under Wise, . . . this is a "sale with restrictions on use," and is a sufficient basis to invoke the first sale doctrine.
In a footnote, the court also rejected Autodesk's assertion that the terms of the software license compelled CTA to destroy its copies of AutoCAD after they ceased to be used. Although CTA's failure to destroy the software may create "fodder for a breach of contract claim against CTA," it had no effect on whether the transactions in this case were sales, Jones emphasized.
Section 117 permits "the owner of a copy of a computer program," to make a limited copy or adaptation of that computer program.
• In MAI Systems Corp. v. Peak Computer, Inc., 1 ILR (P&F) 71, 991 F2d 511, 26 USPQ2d 1458 (9th Cir 1993), the Ninth Circuit concluded that unlicensed third-party use of the plaintiff's software violated the plaintiff's copyright. "In a single footnote, without analysis or explanation, the court declared that '[S]ince MAI licensed its software, [its] customers do not qualify as 'owners' of the software and are not eligible for protection under §117,' " Jones said.
• Similarly, in Triad Systems Corp. v. Southeastern Express Co., 64 F3d 1330, 36 USPQ2d 1028 (9th Cir 1995), the court "tacitly assumed" that licensees could not invoke Section 117 without engaging in any analysis of the license terms at issue.
• Finally, in Wall Data, Inc. v. Los Angeles County Sheriff's Dep't, 20 ILR (P&F) 278, 447 F3d 769, 78 USPQ2d 1728 (9th Cir 2006), the court determined that the license in that case imposed restrictions "sufficient to classify the transaction as a grant of license . . . and not a sale."
In each of the "MAI trio" cases, Jones noted, the Ninth Circuit did not refer back to the earlier case of Wise. "Th[is] court has carefully considered the tension between Wise and the MAI trio, and finds the decisions in irreconcilable conflict as applied to the critical issue in this case."
nally, while the court acknowledged the "tsunami of technological change" that occurred between the decisions in Wise and MAI—motion picture film prints in Wise, compared to computer software in the MAI trio cases—the change provided no basis to avoid the underlying conflict. Jones said:
[A]lthough technology has changed, the question at the core of this case is not technological. Mr. Vernor does not seek to take advantage of new technology to ease copying, he seeks to sell a package of physical objects which contain copies of copyrighted material.
"Where opinions of three-judge Ninth Circuit panels conflict," Jones summed up, "the court must rely on the earliest opinion." With that, the court, adopting the decision in Wise, held that Autodesk's transfer of the AutoCAD package to CTA was a sale, and that Vernor, as the subsequent purchaser, could invoke the first sale doctrine to support his subsequent resale.
Accordingly, the court denied Autodesk's requested relief, and also agreed to let Vernor proceed with his state unfair competition claim against Autodesk.
|
