I went to the SCL seminar on the {i}UsedSoft{/i} case at Linklaters on Thursday night (in fact I didn’t have much choice as I was speaking).
Ian Karet gave an excellent summary of the copyright background to {i}UsedSoft {/i}case and explained some of the practices of the CJEU and why the judgment reports themselves sometimes seem to be rather garbled. Julian Heathcote Hobbins provided an entertaining and illuminating viewpoint from the perspective of FAST (although of course it was all his personal views and not those of FAST
I still find the EU copyright issues and analysis in {i}UsedSoft{/i} very difficult to digest. As part of the preparation for my talk, I spent some time looking into the US cases that look into the same issues. As an English lawyer, the US cases are in some ways easier to understand and less “conceptual” than CJEU judgements.
One of the frustrations of the CJEU judgement is the fact that it did not look at any of the case law. The US courts have looked at pretty much the same issue in {i}Vernor v Autodesk{/i} in 2010 but with diametrically different conclusions. In the {i}Autodesk{/i} case, Vernor bought some pre-owned but unused AutoCAD shrink-wrapped package software in a garage sale and attempted to make a profit by selling it on eBay. Autodesk picked this up and requested the removal of the sale from eBay under the Digital Millennium Copyright Act. In fact, Vernor attempted to sell the software four times on eBay. Eventually the issue was adopted by Public Citizen, an advocacy organisation, and Vernor brought an action against Autodesk requesting a declaration that his sale of the Autodesk software was legal under the US “first-sale” doctrine.
At first instance the court found for Vernor but Autodesk appealed to the Ninth Circuit which held that Autodesk retained title to the software and imposed significant transfer restrictions, stating that the license was non-transferable. This meant that the original purchaser was a licensee rather than “the owner of a particular copy” and he was not entitled to resell the Autodesk software to Vernor under the first sale doctrine. Vernor could not then on-sell to others.
So, we now have a situation where a high-level court in the US has made a decision upholding one of the software industry’s main commercial models. The highest European commercial court has made a contrary decision. The CJEU does not appear to have considered the business implications of its decision. Of course, the decision of a US court is entirely irrelevant to the consideration of European copyright questions but there are complex consequences of the CJEU’s contrary decision in a global marketplace, with software vendors operating common business approaches across the world.
A number of US lawyers that I have spoken to on this issue have made remarks such as “they can’t be serious” or “when will it be over-ruled”. In practice, I’m not sure that too many global IT businesses are planning to change their business model as a result of {i}UsedSoft{/i}.
I’m afraid that this is indicative of an increasing “who cares about Europe” phenomenon that is becoming prevalent in global businesses. Europe seems to be busy making business more complicated and difficult for global operators in a number of areas and {i}UsedSoft{/i} is a good example. The net effect is turning international companies away from Europe so that they target business in Asia, the BRICs and Africa. If we aren’t careful could become something of a backwater of restrictive and difficult practices.
