FIRST-SALE DOCTRINE THROWN OUT

In a stunning unanimous 3-0 ruling the 9th US Circuit Court of Appeals has thrown out the first-sale doctrine.  The first-sale doctrine stated that once you purchase an item, you have the right to resell that item.  Software manufacturers have stated the first-sale doctrine does not apply to them since users are not purchasing the software, but only licensing it.  They state the licensing agreement in legal terms in EULAs and shrink wrap agreements (this is an agreement that says as soon as you open the shrink wrap you have agreed to the agreement, which the terms are often found inside the packaging).

"The terms of the software license in the case are not very different from the terms of most software licensing. So I think it's safe to say that most people don't own their software," said Greg Beck, the defense attorney in the case who represented an eBay seller sued by Autodesk. "The other ramification, there is no reason a similar license could not be put into the cover of a book. It wouldn't be difficult for everybody to implement this."  Beck will ask the full 11 members of the Appeals Court to rehear the case.

The appeals court reversed a lower court judge that said the first-sale doctrine applied whenever the consumer is entitled to keep the copy of the work, entitling consumers to resell their purchased software at will.
The case concerns Autodesk's AutoCAD Release 14, which was for sale on eBay. Autodesk, invoking the Digital Millennium Copyright Act, demanded eBay remove the item from the site, and it promptly did in 2007.

Timothy Vernor, the seller, who purchased at least four copies of the software from a company that was required to dispose of the software under a licensing agreement, re-posted the sale and his eBay account was terminated after Autodesk complained. Litigation ensued.

Autodesk, of San Rafael, California, imposed a significant number of transfer restrictions: it stated that the software could not be transferred or leased without Autodesk's written consent, and the software could not be transferred outside the Western Hemisphere. [Gizmodo]