Court ruling could cripple second-hand software business

The US 9th Circuit of Appeals has ruled on a legal case over the right to resell software in a judgement that could shut down large sections of the software resale market.

The case concerned online merchant Timothy Vernor, who was using eBay to sell unopened copies of Autodesk software which he had bought in office closure and garage sales.

The US Supreme Court ruled in 1908 that copyright owners cannot prevent the resale of products they had sold, the so-called 'first sale doctrine'.

However, the court found unanimously that the software had not been sold by Autodesk, but licensed, and was not therefore covered by this legal principle.

"Autodesk retained title to the software and imposed significant transfer restrictions," the judgement (PDF) reads.

"It stated that the licence is non-transferable, that the software could not be transferred or leased without Autodesk's written consent, and could not be transferred outside the western hemisphere."

The decision could cause major problems in the software reseller market if it upheld on appeal.

"For too long, software companies have tried to strip consumers of their rights as owners of software by pretending that all software is licensed, rather than sold," said Fred von Lohmann, senior staff attorney at the Electronic Frontier Foundation.

"But if software companies can strip us of our rights with a licence agreement, there's nothing to stop book publishers, record labels and movie studios using the same trick to shut down libraries, archives, used bookstores and online auctions.

"For more than a century, the 'first sale doctrine' in copyright law has stood for the principle that if you bought it you own it, and you can resell it or give it away."