Why Should Software be Licensed?
By Harlan YuThursday, March 24th, 2005 at 11:54 pm (last modified 3/25 at 3:00 am)
The evolution of software distribution has been a unique one. Unlike the purchase and subsequent ownership of a book, purchasing software only grants one a license to use the product while the title of the software remains with the creators. In this environment, software users are not only subject to the restrictions (and protections) of federal copyright law but also to the arbitrary contractual terms of the end user license agreement (EULA). Users almost always blindly click through these EULAs and agree to a long and complicated set of terms without first reading it, tilting the copyright balance in favor of the copyright holders.
This is the landscape today, but should there really be a qualitative difference between the purchase of a book versus software? In the past, the courts have rejected licensing schemes attempting to expand the copyright protection for books and phonographic recordings. Why do the courts now acknowledge the legitimacy of software contracts and enforce their provisions? One reason seems to stem from the inapplicability of the first sale doctrine in digital contexts. In Davidson v. Internet Gateway (aka “bnetd,” 2004), the Court holds that
Under the first sale doctrine, “a sale of a lawfully made copy terminates a copyright holder’s authority to interfere with subsequent sales or distribution of that particular copy.” Adobe Sys. Inc., 84 F.Supp.2d at 1089 (citations omitted). “The first sale doctrine is only triggered by an actual sale.”
The Court found that since software is never sold, the first sale doctrine is inapplicable to licensed software. In the past, it was relatively easy to define each “particular copy” as a tangible object and regulate the transfer of the single object. Now, digital products are much more difficult to regulate, so software creators probably shifted toward a licensing scheme to place an additional layer of restrictions on their copyrighted works. Normatively, it seems that without licensing, the software copyright holders could be short-changed since licensees could effortlessly sell a copy of their software without deleting the original. But is the current licensing scheme the best way to re-balance copyright for software?
Software licensing swings the copyright balance too far back into the creators’ court. The creators have a strong incentive to construct their EULAs in an unnecessarily broad manner. As discussed earlier by ‘MRK’, though it is true that creators need to protect themselves from frivolous lawsuits and other liabilities, there is no deterrent constraining them from including wildly excessive terms. Given that most people blindly click through the EULAs, software creators are able to first obtain over-broad contractual agreements and later pick and choose what violations to litigate.
A standard contract also requires “a meeting of the minds”– a measure that can rarely be attributed to EULAs. Excessive EULAs are written in such convoluted legalese that their meaning can only be fully grasped by an extremely small population of legally and technically minded experts, if ever. For example, the Blizzard EULA stipulates that a licensee may not “in whole or in part, copy, photocopy, reproduce, [or] translate… the Program.” What exactly does this mean and what specific rights would one be signing away? A standard interpretation would disallow a licensee from giving a friend a burned copy of the software CD. But, a loose translation of copying and translating can also mean that it is illegal to even run the program, since the computer would be copying pieces of the software to RAM. This ambiguity of language seems to blur the “meeting of the minds.”
This is not to advocate even longer and more technically and legally obscure EULAs, but I am skeptical that software licensing on top of federal copyright law is the right solution to re-balance copyrights in the digital domain. The conflicts between contract and copyright leaves no bright line standard for what rights are granted to software users. Further questions are raised when we consider hybrid products such as E-books– is this a book or a piece of software? Perhaps we can update the first sale doctrine to embrace new digital technologies and protect software creators without utilizing licenses, but that will be a subject for another time.
March 25th, 2005 at 10:10 am
> licensees could effortlessly sell a copy of their software without deleting the original
How’s that, exactly? The first sale doctrine prevents interference with distribution of the sold copy. It doesn’t grant purchasers a license to make new copies.
March 27th, 2005 at 5:05 pm
To clarify, the first sale doctrine makes sense when we talk about analog products. It would take substantial effort for me to photocopy an entire book before re-selling the original copy to someone else. Moreover, once I sell the original, I am no longer in possession of it and unable to sell it again.
In contrast, not often do we hear about someone buying software, using it for a while, then “selling” it second-hand to someone else. The first sale doctrine protects the distribution of the sold copy, but what exactly does this mean when we talk about software? Can I use the purchased CD to install the software on all of my friends’ computers? Can I install the software on my computer and, without deleting my installed version, re-sell the purchased CD?
I’m guessing that software manufacturers felt a need to enforce more stringent regulations on the sold copy than what was afforded to them by a weak application of the first sale doctrine– thus, we have EULAs. Even still, as I argued later in the article, the EULAs themselves are still quite ambiguous as to what rights are restricted.
March 30th, 2005 at 1:45 am
The first sale doctrine does not permit you to make a photocopy of a book you purchased. It lets you mutilate or scribble on the copy you purchased, or resell it directly. It does not permit you to duplicate that copyrighted work.
Also, I hear about people selling second-hand software all the time: it happens every time someone transfers an old computer with the original OS intact. That’s a digital copy, distributed under the first-sale doctrine. But let’s say instead that you have purchased boxed software, and have installation CDs. The first sale doctrine lets you resell those CDs, but it doesn’t let you make copies for yourself. You *are* permitted to make those copies necessary to run the program, presumably including installing it on your own machine. It is an interesting question what happens to those copies when you sell the original copy. My guess is that you no longer have the right to make a copy from the disk into memory, so they’re useless to you.