Posted by : Amanda Stein Wednesday, September 19, 2012




International property rights and transfer of ownership is always a complicated issue, especially where it intersects with digital files. Most of us grew up with the idea that when you buy a book, for example, you can then sell that book to a second-hand bookshop, the same way as if you buy some American racing headers, you can sell them on to a Mustang parts and accessories shop.

However, try to do the same thing with an ebook file and you will be in a little bit of trouble. The reason for this difference has to do with a concept known as the first-sale doctrine.

What is the First Sale Doctrine?

When a copyright holder sells a copy of their work, they cannot then dictate what you do with that copy one purchased, as long as you are not making duplicates and selling them. So, photocopying a book and selling the copies is not okay, but selling the original copy when you have finished reading it is fine.

One area where this doctrine does not apply is when you are leasing or renting the piece of property instead of purchasing it outright. Hence, the proliferation of EULAs (End User Licensing Agreements) with software and games. When you download a game from Steam or buy a piece of software from a computer shop, you are licensing it rather than buying it, so the company can prevent you from selling that game or software to someone else.

What has Changed?

In general terms, courts do not simply look at the exact text of an agreement or contract – they also look at the actual effects and real meaning of it. This helps avoid unscrupulous companies getting around the purpose and intention of the law.

Recently, the European Court of Justice looked at one such agreement. The case was between Oracle, a software company, and UsedSoft, which resold previously used Oracle software licenses. The ECJ found that the first sale doctrine held, and that the software could be resold as long as it was removed from the computer of the first purchaser. This is because the court decided that, as a whole, a free download of the software from Oracle's website along with the purchase of a license key counted as a sale, rather than a simple license of use.

What Does It Mean?

This is a very recent judgment, and the ramifications are still unclear. As a European Union ruling, this only applies within the EUs borders, so US consumers of US company products are not currently affected. Oracle also had a specific business model, where anyone could download the software whenever they wanted, but the license key made the software usable.

So, it’s not clear if other distribution methods are required to change in order to allow resale. It will be very interesting to see what changes are implemented by software companies.


Post by guest blogger Carl, a writer who enjoys blogging about everything from American racing headers to software.

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