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Vernor v. AutoDesk - Vacated (first sale) and remanded (copyright misuse)

By Pamela Jones et al.

There is a ruling [PDF] from the US Court of Appeals for the Ninth Circuit in Vernor v. Autodesk, and some of you will hate it. The second-hand copies Timothy Vernor was selling on eBay are not protected by first sale after all. That is the decision by the appeals court:

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 user's ability to transfer the software; and (3) imposes notable use restrictions.

I am sorry that some will feel upset, but I did warn you that the underlying legal tide was flowing this way and that I did expect that the lower court's decision would be reversed. EULAs are generally upheld, from all I know and have seen. Here's the end of the order:

We vacate the district court's grant of summary judgment in Vernor's favor and remand. We hold that because CTA is a licensee, not an owner, the "sale" of its Release 14 copies to Vernor did not convey ownership. Vernor is accordingly not entitled to invoke the first sale doctrine or the essential step defense, on behalf of his customers. We remand for further proceedings consistent with this opinion, including consideration of Vernor's copyright misuse defense.

Morrison & Foerster's Michael A. Jacobs was on the team for AutoDesk, and after reading many of the documents in the lower court and in the appeal, some of which I have for you, I did believe his team was more likely to prevail in the end. It's never prudent to bet against Mr. Jacobs. So, the first sale decision by the lower court in favor of Vernor is vacated and the case is now remanded to look at the issue of whether Vernor has a copyright misuse defense.

Full post as published by Groklaw on September 10, 2010 (boomark / email).