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End User Licensing Agreement ("EULA")

So, what do all of these comapnies have in common?

Last Updated - May 2, 2010

They ALL use EULA's with the software they market. Like hundreds of other software companies. These names happened to come up first in a search using AltaVista on Decenber 5, 2007. Like most of the others, these companies have clauses in their EULA that specifically states that their software is licensed not sold. BullShit Alert! They are ALL lying to you. Why do they do it? Because a lot of people believe what they say.

Unlike the lying corporate lawyers who represent the many lying software companies, we will support our statements with court decisions and legal opinions that back what we are claiming. The lying corporate lawyers who represent the many lying software companies cannot do the same. The main problem is that courts are generally not allowed to go outside the arguments presented to them. When someone is sued by a software manufacturer it usually for violating the EULA. And that is how most defendants present their cases; they defend against the charges brought instead of seeking alternative defenses. One reason for this approach is that like doctors, there are a lot of incompetent lawyers out there who should not be practising law.

Instead of defending the lawsuits and attacking the EULAs, the sucessful defenses attack the notion that software is licensed, not sold. Since software is copyrighted, and the copies sold come under copyright law, the first sale doctrine comes into play. Software manufacturers hate that idea because it limits their sales of new copies if the old copies can be resold. While courts are often inclined to accept the terms of the EULA as a contract, copyright law trumps contract law which makes those EULA restrictions on resale invalid.

Historical Context

When these form licenses were first developed for software, it was, in large part, to avoid the federal copyright law first sale doctrine" thus the intent of EULAs after 1990 were to preempt federal statutes using contract law and that they serve no purpose besides attempts to preempt consumer rights in other statutes. (Source: 3rd Circuit Court of Appeals, Step-Saver Data Systems, Inc. v. Wise Technology)

Court Cases

  • Bobbs-Merrill Co v. Straus (1908) US Supreme Court- No license required to use copyrighted material. License "claimed" by copyright holder cannot extend holder's rights beyond statute defined by Congress.
  • Advent Sys. Ltd. v. Unisys Corp (1991) held that the sale of software is the sale of a good within the meaning of Uniform Commercial Code.
  • Downriver Internists v. Harris Corp (1991) held that the sale of software is the sale of a good within the meaning of Uniform Commercial Code.
  • Step-Saver Data Systems, Inc. v. Wise Technology (1991) the court concluded that subsequent changes to the Copyright Act had rendered the need to characterize the transaction as a license to use software "largely anachronistic.".
  • Applied Info. Mgmt., Inc, v. Icart (1997) held that the sale of software is the sale of a good.
  • Novell, Inc. v. CPU Distrib., Inc. (2000) The first-sale doctrine applies to software.
  • Softman v. Adobe (2001) The first-sale doctrine applies to software and can not be waived or taken away through an EULA.
  • Krause v. Titleserve (2002 2nd Cir Appl) Titleserve owned the software; Krause was confusing ownership of a copyright with ownership of a copy of the copyrighted material.
  • Timothy Vernor v. Autodesk (2008 9th Cir W. Wash) Order by District Judge stating that Autodesk's software was SOLD NOT LICENSED and that the Plaintiff, Timothy Vernor was entitled to use the First Sale Doctrine as a defense to alleged copyright infringement.
  • Timothy Vernor v. Autodesk (2008 9th Cir W. Wash) Second Order by District Judge stating that Autodesk's software was SOLD NOT LICENSED and that the Plaintiff, Timothy Vernor was entitled to use the First Sale Doctrine as a defense to alleged copyright infringement, AGAIN. This case is now before the 9th Circuit Court of Appeals.

Articles

O.K., so what do these companies have to support their contentions? Nada, nothing, zilch. Even the Ninth Circus has slapped down the software companies on this issue. So why do they continue to proclaim what the rest of the world recognizes as a lie? Because that's what corporate lawyes do; they lie. And they lie. And they lie. Then they bill their clients for all of those lies. It's a fraternity of lies. Comapny A lies about their rights and threatenens Company B with a lawsuit. Their respective corporate lawyers throw their various isipid lies at each other, with both sides racking up the billable hours. Does anyone care? Company A and Cpmpany B are happy because they can show they fought the tough (but exxpensive) fight. The law firms buy another partnership. So, you ask, why does Tabberone care?

Because while these foolish fops are playing their corporate "trolling for dollars", they spill over into the legitimate secondary market and deliberately harm the lawful resellers of their products. Take Autodesk, Inc, for example, and their clueless lawyer, Andrew S MacKay, of Donahue Gallagher Woods LLP.

In 2007, Clueless MacKay shut down a number of eBay auctions of Autodesk Software, foolishly and falsely claiming the Autodesk Software is licensed, not sold. Clueless MacKay is our example of a lying corporate lawyer. Above we show you case after case where federal courts have rejected this idea. So, what is the basis of his actions and his claims? Maybe his yacht (we assume he has one; he's a partner), his expensive home, his sports car, etc; certainly not the facts of the issue.

As long as corporate lawyers like Clueless MacKay get away with lying, the abuses will continue. Until there are civil penalties for IP Owners and their lawyers abusing the federal statutes, these simple-minded "officers of the court" will continue harming those for whom they have little or no regard.

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