First sale doctrine so far has meant that EA can do nothing about the used game market apart from lock users out of multiplayer and all the rest. However, the recent (as in, like, a week ago) case Vernor vs. Autodesk, Inc. [http://www.ca9.uscourts.gov/datastore/opinions/2010/09/10/09-35969.pdf] mixes things up in a slightly disturbing way. The story: Autodesk sells CAD software protected, as all software is, by an EULA. One customer, CTA, bought copies of the software named in this document as "Release 14" (referring presumably to their software AutoCAD) and eventually sold them on second hand to Vernor (in a garage sale), who then sold them on on eBay. When Autodesk saw the auctions, they DMCA'd Vernor, who believing himself to be in the right (not without cause), counter DMCA'd. Autodesk failed to respond, so eBay reinstated the auction. This happened four times, the fourth time Vernor getting his account temporarily suspended for a month. As a powerseller, this cost him money, so he took Autodesk to court to get them to stop filing DMCA takedown notices.
The court agreed with him, however, the Ninth Circuit Court of Appeals went the opposite direction:
Judge Callahan said:
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.
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we conclude that CTA was a licensee rather than an owner of copies of Release 14 and thus was not entitled to invoke the first sale doctrine or the essential step defense.
Evidently, this opens up anyone selling software protected by an EULA of some description to claims of copyright infringement, as happened to Vernor. I imagine the EFF isn't terribly thrilled about this. But it gets better.
Autodesk retained title to the software and imposed significant transfer restrictions: it stated that the license is nontransferable, the software could not be transferred or leased without Autodesk's written consent
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Thus, because Autodesk reserved title to Release 14 copies and imposed significant transfer and use restrictions, we conclude that its customers are licensees of their copies of Release 14 rather than owners.
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Vernor did not receive title to the copies from CTA and accordingly could not pass ownership on to others. Both CTA's and Vernor's sales infringed Autodesk's exclusive right to distribute copies of its work.
Because Vernor was not an owner, his customers are also not owners of Release 14 copies. Therefore, when they install Release 14 on their computers, the copies of the software that they make during installation infringe Autodesk's exclusive reproduction right because they too are not entitled to the benefit of the essential step defense.
There's a little footnote here which states that you are entitled to first sale rights, if you are the formal owner of the software; but if you're merely a licensee, then all bets are off, no matter how intuitive it may seem to be able to sell something you paid money for.
Vernor cited United States vs. Wise, which basically states that if you transfer something to someone for compensation and cannot reasonably expect them to return it as part of the deal (so rentals don't count) - "indefinite possession" - you have essentially sold it. Unfortunately, the court disagreed with him.
In Wise, we utilized a multi-factor balancing test to distinguish between a first sale and a license of a copyrighted film print. United States v. Wise, 550 F.2d 1180, 1190-92 (9th Cir. 1977). We considered a transferee?s ability to possess a print indefinitely as one factor in our analysis, but we did not treat it as dispositive. If we had, we would not have needed to consider other contractual provisions, such as retention of title, copying prohibitions, and lending restrictions. Id. Moreover, we held in Wise that two agreements were licenses rather than first sales, even though those agreements did not describe any provision requiring the transferee to return the prints to the copyright owners.
Perhaps more directly relevant to the discussion in this thread was Vernor's fourth point. Since Autodesk did not require repeating license payments or impose time limits, they were making a "first sale", although this seems pretty much a rehash of his Wise citation. However, there was a key difference, in that he cited bankruptcy legislation. Needless to say, the court didn't seem terribly impressed.
(In a slightly naughty move by Autodesk, they tried to claim that since Vernor had purchased the software from a licensee, he was bound by the same EULA as CTA - despite never agreeing to it! Thankfully (or should that be mercifully), the court demurred on that point. And people say Microsoft is evil...)
What have we learned from all this? This case pretty much confirmed what many of the "you're buying a license, not a commodity" camp of the "games as property" debate have been saying for a while now. It's just a bit of a shame that it's so sweeping.
