Autodesk suit could affect secondary software sales

A judge heard arguments in a dispute over software sales that could potentially have repercussions on the secondhand sale of virtually any copyright material.

The suit was filed by Timothy Vernor, a seller on eBay, after Autodesk, citing the Digital Millennium Copyright Act, asked eBay to remove some of its software products that Vernor had listed for sale there, and later to ban him from the site.

Vernor had not illegally copied the software but was selling legitimate CDs of the products secondhand. For that reason, he argued, he was not infringing Autodesk's copyright.

Autodesk countered that because it licenses the software, rather than selling it outright, a licensee does not have the right to resell its products.

“The deal between Autodesk and the licensee is [that] you pay us for the software and you're not going to be able to sell it on the used market,” Michael Jacobs, an attorney with Morrison and Foersters who is representing Autodesk, said in court.

If the court sides with Vernor, the fundamental economics of Autodesk's business will be upset, he said.

While Jacobs acknowledged that this isn't a case where software was illegally copied, he argued that the end result is similar. That's because the original owner of the software can continue to use the software while the original CD is resold to someone else, without Autodesk profiting from the second sale.

In fact, Vernor originally bought the software from someone else, so Autodesk also argued that Vernor had unlawfully acquired it, because the software license did not give the original owner the right to sell it to him.

Vernor's lawyer responded that while Autodesk can call it a licensing arrangement in which it retains title to the software, in reality it is selling a product that an end-user then owns.

“There's no way for Autodesk to control the software once it's in the stream of commerce. The particular copy of software gets full value up front. Autodesk doesn't ask for periodic payments,” said Greg Beck, a lawyer from the consumer advocacy group Public Citizen who is representing Vernor.

He drew a parallel with copyright books. Most books include the line “all rights reserved” in the front. That means someone who buys the book can't make copies of it or read it as a dramatic performance to a crowd. “That's different from saying you don't own the copy of the book you purchased. You do own it because you have the right to keep it or destroy it or burn it or do whatever you want to that copy, even though you don't have the greater rights,” he said. By the same token, someone who buys a piece of software has the right to resell the software CD, he said.