June 25, 2012 | By Parker Higgins and Mitch Stoltz

Stand Up for Owners' Rights

If you buy something, you can do with it—and do away with it—as you want. Right? The digital age is challenging this most basic of expectations in a few ways, and EFF and its allies are on the lookout. The Supreme Court will soon review a court decision that, if upheld, could put handcuffs on our ability to sell digital goods, or even physical goods with copyrighted logos or artwork, simply because the goods were manufactured outside the U.S. This case is important, but its also just a small piece of a larger assault on ownership rights. Over the past decade, courts and copyright owners have quietly been creating a world in which digital goods are never truly owned, but only licensed.  And those licenses inevitably contain a plethora of legal restrictions on your ability to fully use the goods you "buy."

EFF has signed on to the Citizens' Petition for Ownership Rights, urging the U.S. government and the courts to protect our basic assumption that if you buy it, you own it, and can dispose of it as you please. You, too, can sign.

The petition was prompted by Kirtsaeng v. John Wiley & Sons, which is on its way to the Supreme Court. As we explained earlier this year, Kirtsaeng is a challenge to the "first sale" doctrine of copyright law. First sale says that once a given copy of a copyrighted work has been sold or given away, the copyright owner has no more legal control over that copy. That means the copyright owner can't ban resale, set a minimum resale price, or prohibit tinkering and modification. First sale is what makes used bookstores, libraries and video rentals possible.

In Kirtsaeng, the U.S. Court of Appeals for the Second Circuit said that first sale doesn't apply to copies made outside the United States, even if they were sold or given away legally and then imported into the U.S. Effectively, copies manufactured abroad—whether books, software, or physical goods with copyrighted labels or logos on them—could never be fully owned in the U.S. You could buy these goods, but you could never sell them or give them away without permission. Strange result, right? First sale is part of our intuitive understanding of what it means to buy and own something. If you've paid good money for a book, or a DVD, or whatever, or received it as a gift, it's fundamentally weird to be told that you can't lend it, or resell it as used, or give it away.

This decision gives copyright owners the ability to shut off markets for used copies, just by moving physical manufacturing abroad. It would also give manufacturers an incentive to move jobs out of the U.S. to create these legally handcuffed, non-resellable goods.

The defendant (and EFF) asked the Supreme Court to review the case, and the Court agreed. Now, we are asking the Obama administration to weigh in and protect the common-sense understanding of what it means to own something.

Kirtsaeng is not the only threat to owners' rights, though. Sellers of digital goods like software, e-books, movies, and music often try to opt out of the first sale doctrine using contracts - the shrink-wrap, clickwrap, and other forms of fine print agreements that we're inevitably presented with (and seldom read) whenever we buy digital goods. Often, those agreements say something like "this digital widget is licensed to you, not sold." The implication is that because the copyright owner hasn't "sold" you a copy, you can't lend it, or resell it, or give it away. Worse yet, you can't tinker with or modify it. Never mind that you paid for a permanent copy and the seller doesn't really expect that you'll ever give it back - the fine print claims to transform a sale into something else.

Unfortunately, several courts have ruled that this trick works.  In Vernor v. Autodesk, Inc., the Ninth Circuit appeals court ruled that software licenses that "significantly restrict the user’s ability to transfer the software" and "impose notable use restrictions" turn what looks and feels like a purchase into something less.

Let's tell the courts and Congress that if it looks like a sale and feels like a sale, it's a sale. Let's sign the Citizens' Petition for Ownership Rights, to tell the Obama administration and the Attorney General to stand up for first sale at the Supreme Court. And beyond that, digital goods providers should not be able to opt out of first sale using magic words in the fine print of user agreements. Watch this space for more info on ownership rights and how you can help defend them!


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