Under the first sale doctrine, once a copyright owner sells or gives you a copy of her work, she gives up control of that particular copy. You buy it, you own it. This principle is extraordinarily important for consumers, as it makes it legal for you to resell, lend, or give away the books, CDs, DVDs, and software that you purchase.
Many copyright owners don’t like these limits; they’d rather be able to completely control the market for their products, including any secondary markets. Thus, in an effort to duck the first sale doctrine, companies increasingly claim that they are "licensing" products to consumers, instead of selling them.
That's exactly what's happening in Vernor. Timothy Vernor, an online software reseller, tried to auction four packages of Autodesk's AutoCAD software on eBay, but Autodesk threatened Mr. Vernor with a copyright infringement lawsuit, claiming that its software is only “licensed,” never sold and pointing to the fine print on the agreement it had with the original purchaser from whom Mr. Vernor obtained the software.
The public interest litigators at Public Citizen pitched in to help Mr. Vernor, and they filed suit in Seattle, asking the court to clarify his right to resell the software. The district court agreed with Vernor in 2009, but Autodesk appealed to the 9th U.S. Circuit Court of Appeals. There, justices wrongly held that the first sale doctrine doesn't apply as long as the vendor writes a user agreement that includes restrictions transforming a sale into a license. In other words, if you use the right "magic words," you can turn buyers of your works into renters, who don't have the right to resell, lend, or give away property they thought they owned.
This decision was bad news for consumers. By undermining the crucial balance between copyright owners and users that supports used bookstores, libraries, DVD rentals, and so on, it hurt our ability to save a few dollars and our ability to retain, archive and access older, out-of-print materials. Libraries and second-hand sellers are often the only hope for these materials and the “long tail” community of researchers, historians and hobbyists that value them. And since software is embedded in an extraordinary array of content and devices, from videos to music to goods such as phones, picture frames, book readers, etc., all of which is made available subject to a EULA few consumers read, we worry that the decision may have an even broader impact.
This Ninth Circuit got this one wrong, which is why we asked the Supreme Court to hear this case. A coalition of public interest, consumer, and library groups joined EFF in the amicus brief, including several national library associations, Public Knowledge, the Consumer Federation of America, and U.S. PIRG. We hope that the Court agrees to review the case and treats it as an opportunity to put consumer rights and expectations ahead of the overreaching demands of software vendors.