Court decision clamps down on our rights to software that we 'own'

A recent decision by the 9th Circuit Court may have a chilling effect on the ability to use the software we "buy" in the US. Will the general public finally notice the legal benefits of open source software?

There was a time, not too long ago, that we could talk about "buying" software without any irony. We would go to the store or some website and pay money, and we would get installation CDs or downloads that we would say we "owned." Even with the proliferation of end user license agreements, we could still buy some software installer CD, take it home, install it on one computer, then on another when we replaced the first, then sell the CD to someone else when we did not need to use the software any longer. For a lot of us, it goes against the grain to think of paying for an installer -- especially an installer on physical media like a CD -- and still think of the installer as belonging to someone else. You bought it; it's yours. Right?

Over time, of course, we have all had to get used to the changing realities of software copyrights. Luckily, as long as we did not distribute copies, we were generally in the clear. In the United States, the legal doctrine of fair use allowed us to do things like make backup copies and reinstall on new hardware. The doctrine of first sale allowed us to resell the original installation media when we were not using the software any longer. Even as we became increasingly aware of the restrictions of copyright law and EULAs, we could treat an installation CD as if we owned it, much of the time.

Of course, the efforts of copyright industry organizations like the RIAA, MPAA, and BSA have whittled away some of the protections of the doctrine of fair use, narrowing what we are allowed to do with what we "buy" more and more as time goes by. The DMCA is probably the most famous piece of legislation to put more power into the hands of commercial copyright holders and take it out of the hands of their customers. In many cases the DMCA has had a devastating effect not only on the doctrine of fair use in practice, but also on certain types of computer science research and some software markets.

We have gotten more bad news, recently. On Friday, 10 September, three judges in the 9th Circuit Court of Appeals, covering the nine western states of the US, handed down a decision that effectively means the end of the doctrine of first sale for commercial software. Speaking of the limited monopoly power granted by copyright law to a copyright holder, the 9th Circuit decision reads:

The exclusive distribution right is limited by the first sale doctrine, an affirmative defense to copyright infringement that allows owners of copies of copyrighted works to resell those copies. The exclusive reproduction right is limited within the software context by the essential step defense, another affirmative defense to copyright infringement that is discussed further infra. Both of these affirmative defenses are unavailable to those who are only licensed to use their copies of copyrighted works.

A fair bit of a fuss is being made over the restrictions imposed by this interpretation of the applicability of the first sale doctrine. Wired offers an article that focuses quite a bit of attention on the subject: Guess What, You Don't Own That Software You Bought.

By contrast, however, the damage done to the essential step defense -- which goes well beyond simply prohibiting software "licensees" from making backup copies -- seems to get very little attention at all. The Wired article does not even mention it in passing, for instance. Perhaps the language of the law, and of this court decision, is too abstract for many reporters to immediately recognize the implications. Perhaps even technology journalists are simply not familiar enough with the way software works to recognize the effects of this ruling.

The explanation given in the 9th Circuit decision for the essential step defense reads:

Congress enacted the essential step defense to codify that a software user who is the "owner of a copy" of a copyrighted software program does not infringe by making a copy of the computer program, if the new copy is "created as an essential step in the utilization of the computer program in conjunction with a machine and . . . is used in no other manner."

In short, what this part of the ruling says is that when you pay for a piece of software that comes with a license agreement you do not even have the right to use the software if that right is not expressly provided in the license, or by implication of some other provision of the license, as long as making a copy of the copyrighted work is part of using it. In short, if this non-lawyer has read the law and the 9th Circuit Court decision properly, this would in effect mean that for some licenses, if you actually install and use the software, you could be subject to a lawsuit.

As software developers and computer scientists should be well aware, if you consider a digital copy to count as a "copy" -- and it is clear that the law regards that as a copy just as much as physical storage media or a printout counts as a copy -- this means you probably cannot legally install the software (making a copy on your hard drive) or run it (making a copy in memory) at all, without explicit permission from the copyright holder. All you can do is admire the installation CD. The time has come that users really need to start reading those license agreements with a discriminating eye. At this point, we might even need to have lawyers read the more complex EULAs for us before we start using the software, to ensure that just by installing and using it we do not subject ourselves to legal liability.

The obvious answer to this, for many people, would be to use more open source software and less proprietary, closed source software. Even there, we need to be careful, however. This ruling might have some frightening effects on nominally open source software licenses as well. Some of these licenses are so complex that there may be nooks and crannies with unintended legal effects in the terms that could be abused to sue end users.

While most open source software licensors surely would not want to do something like this, an open source license developed by a company for its own software could conceivably be intentionally designed with a legal trojan horse in it, for possible later use by the legal department, simply by being a little to specific in its provision for the right to copy the software. A license that allows the licensee to distribute copies without allowing the licensee to make those copies could constitute such a legal trojan horse. In addition, even more generally accepted licenses that might only accidentally contain such gotchas could be abused by a corporation that acquires an open source codebase -- such as Oracle's acquisition of the MySQL and codebases.

The likelihood of a license such as the GPL being abused this way seems quite remote, of course. If such an unintentional implication of these highly complex open source licenses is discovered, a modified version is sure to be distributed very quickly, and projects distributed under their terms are sure to be moved to the new version, or to another license altogether, very quickly as well. Those of us who try to stick to simpler licenses, such as the majority of copyfree licenses, would be justified in feeling especially secure about license choice, however.

The defense attorney in the 9th Circuit copyright infringement case -- Vernor v. Autodesk, Inc. -- announced his intention to seek a new hearing at the 9th Circuit Court of Appeals with a full panel of eleven judges. Even if that fails, it may be appealed further, as far as the Supreme Court. The last word may not have been spoken on this issue in court, yet. For now, though, software users and especially resellers should consider treading very carefully. If you have not read the license agreements attached to the software you use, now would be a very good time to do so.

If nothing else positive comes of this, though, at least it might serve as a good argument in favor of open source software.