Vernor v. Autodesk (or This Car Is Licensed Not Sold)

Vernor v. Autodesk is an interesting case, but it probably won't be as catastrophic as the EFF makes it seem, unless the US Supreme Court somehow makes it worse.

For many years, software publishers have been trying to impose licence terms on unwilling users. A relatively recent wheeze is to include a term stating that the user gives up ownership of the software copy entirely and becomes a mere licensee. The publisher includes this term in the hope of annulling the user's rights as a lawful owner of the copy. Those rights include the right to run the software (the essential step defence) and the right to sell the software (the first sale doctrine).

But how can publishers force users to agree to license terms that take away their rights and give nothing in return? In the US, the judgement in ProCD v. Zeidenberg created a legal rule which says that you automatically agree to the shrink-wrap licence terms whenever you don't attempt to return the copy for a refund. Since that piece of dodgy reasoning is still the law in the US, I recommend attempting to return every piece of software that you buy in the US (after opening it to ensure that the attempt will fail, of course). This is a good time to point out that I am not a lawyer.

The case of Vernor v. Autodesk hinges on the question of whether Autodesk's customer (CTA) was a copy owner or a mere licensee. However, it's completely clear to me that CTA agreed to a licensing term that attempted to deprive CTA of any ownership of the software copies. The US Court of Appeals said that CTA positively agreed to the licence (as part of a settlement with Autodesk), and later agreed to destroy the software copy (as part of a discounted upgrade deal), and that these facts are not in dispute.

So, it seems to me that the Vernor case is distinguishable from the usual shrink-wrap scenario, where you buy the software and then install and run it using your authority as property owner, without agreeing to any licence terms.

But I could be wrong. Somewhat disturbingly, the judgement of the Court of Appeals concerns itself mainly with the criteria for deciding whether a licence successfully denies ownership to the purchaser. This makes it arguable that the real precedent set by the case is validating the publisher's trick of using magic words to revoke the rights of users, if they can only convince those users to actually agree to the license terms.

And so to the car industry. Car manufacturers would love to kill off the second-hand market, for the simple reason that the supply of second-hand cars drives down the price of new cars. If they simply switch to a model where car buyers must enter a restrictive contract before taking possession, then the manufacturers can retain ownership of their cars and rely on the Vernor judgement to prohibit second-hand sales. If it won't work for the cars themselves, then it will work for the software embedded in the cars.

I sincerely hope the car companies try this. It would outrage enough people that Congress might actually legislate to fix the problem.