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This information is taken directly from the court opinion. It is not taken out of context nor is it altered. Relevant footnotes are included at the bottom.

From Softman Products v Adobe Systems, 171 F. Supp. 2d 1075 (C.D. Cal. 2001)

Historically, the purpose of "licensing" computer program copy use was to employ contract terms to augment trade secret protection in order to protect against unauthorized copying at a time when, first, the existence of a copyright in computer programs was doubtful, and, later, when the extent to which copyright provided protection was uncertain. (See Rice Decl. ¶ 6.) Computer program copy use "licensing" continued after federal courts interpreted the Copyright Act to provide substantial protection for computer programs as literary works. (Id. at ¶ 7.) In Step-Saver Data Systets, Inc. v. Wise Technology, the Third Circuit examined the historical development of the use of licensing in the software industry and concluded that subsequent changes to the Copyright Act had rendered the need to characterize the transaction as a license "largely anachronistic." 939 F.2d 91, 96 n.7 (3d Cir. 1991).10


Footnote 10 - The court in Step-Saver explained: "When these form licenses were first developed for software, it was, in large part, to avoid the federal copyright law first sale doctrine . . . . Under this doctrine, one could purchase a copy of a computer program, and then 'Lease it or lend it to another without infringing the copyright on the program. . . . Consumers, instead of purchasing their own copy of the program, would simply rent a copy of the program, and duplicate it . . . . [S]oftware producers wanted to sue the companies that were renting the copies of the program to individual consumers, rather than the individual consumers. The first sale doctrine, though, stood as a substantial barrier to successful suit against these software rental companies, even under a theory of contributory infringement. By characterizing the original transaction between the software producer and the software rental company as a license, rather than a sale, and by making the license personal and non-transferable, software producers hoped to avoid the reach of the first sale doctrine and to establish a basis in state contract law for suing the software rental companies directly. Questions remained, however, as to whether the use of state contract law to avoid the first sale doctrine would be preempted either by the federal copyright statute (statutory preemption) or by the exclusive constitutional grant of authority over copyright issues to the federal government (constitutional preemption). [Citations.] Congress recognized the problem, and, in 1990, amended the first sale doctrine as it applies to computer programs and phonorecords. [Citations.] As amended, the first sale doctrine permits only non-profit libraries and educational institutions to lend or lease copies of software and phonorecords. [citations.] (Under the amended statute, a purchaser of a copy of a copyrighted computer program may still sell his copy to another without the consent of the copyright holder.)." 939 F.2d at 96, n.7.

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