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Last updated February 22, 2010
|What Is A License?|
|According to the 9th Circuit Court of Appeals:|
We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the userís ability to transfer the software; and (3) imposes notable use restrictions.
The 9th Circuit Court of Appeals is called the 9th Circus for a reason: they are a bunch of clowns. The 9th Circuit Court of Appeals is
overturned by the Supreme Court twice as often as any other Circuit. This reasoning by the 9th Circuit Court of Appeals grants the copyright owner
sweeping powers not given by Copyright Law.
a. The Licensing Language on the Promo CDs Does Not Create a License.
Each of the Promo CDs bore a label with words that purportedly "license" use of that Promo CD to the music industry insider receiving it. (Kossowicz Decl. Ex. 11.) UMG argues that these words create a license between UMG and any recipient who accepts the Promo CD and that under this license UMG retains title to the Promo CD. Augusto argues that these words do not create a license and that UMG's distribution of the Promo CDs qualifies as a gift or sale. In determining whether a transaction is a sale or a license, courts must analyze the "economic realities" of the transaction. Microsoft Corp. v. DAK Indus., 66 F.3d 1091, 1095 (9th Cir. 1995). "[T]he fact that the agreement labels itself a 'license' . . . does not control our analysis." Id. at 1095 n2.i. One Hallmark of a License Is the Owner's Intent to Regain Possession.The right to perpetual possession is a critical incident of ownership. See Krause v. Titleserv, Inc., 402 F.3d 119, 123 (2d Cir. 2005) (describing a person's "degree of ownership of a copy" as "complete" when "he may lawfully use it and keep it forever, or if so disposed, throw it in the trash"). Accordingly, the distributor of a copyrighted product's intent to regain possession is strong evidence that the product was licensed, not sold, to the recipient. The absence of this intent is strong evidence that the product was sold.ii. The Absence of a Recurring Benefit to UMG Suggests the Transfer to Music Industry Insiders Is a Gift or Sale
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