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That’s My Disk To Sell, Or Is It?
- 9/24/2010

A recent decision by the Court of Appeals for the Ninth Circuit may signal the end of the used computer software and used computer game market.

On September 10, 2010, the Ninth Circuit held in Vernor v. Autodesk, Inc. that an owner of authentic, used copies of AutoCAD was not legally entitled to sell the copies on e-Bay under the terms of the AutoCAD license agreement (9th Cir., No. 2:07-cv-01189-RAJ, 9/10/10). The seller, Vernor, argued that the used copies were legally acquired and that the first sale doctrine under established copyright law entitled him to resell the disks. The court reversed the district court, and held that Vernor was not an owner of the copies of the software, per se, but was merely a licensee of the copies. Under the terms of the license, Vernor was expressly precluded from reselling the copies. Therefore, Vernor’s sale of used AutoCAD disks on e-Bay may have constituted copyright infringement.

This decision may represent a departure in copyright jurisprudence. Software producers, like Microsoft, Apple and Adobe can now restrict buyers from reselling their old disks after upgrading to new versions by simply including similar terms in their licenses. If buyers of software are deemed to be licensees of their particular copies, rather than owners, the buyers can be prevented from transferring the software to any third party. Other software producers would be well advised to include such language in their license agreements.

Ostrolenk Faber LLP will monitor this case to see whether Vernor appeals to the United States Supreme Court, and will also monitor the courts to see if other circuits follow the 9th Circuit. Check back for future developments.

Click here to read the entire Ninth Circuit opinion in Vernor v. Autodesk, Inc.