The last time I clearly remember buying software was sometime in the 1980s. Oh, I still go to stores and pay for software, over and over – and so do you, but if you read the EULAs closely, you’ll find that the makers would have it that you are not purchasing anything at all.
You might think you bought it, but as far as they’re concerned, you’re making a contract, not buying a product.
That contract involves you providing money, and getting some permission to install and use some software. That software is thoughtfully provided in the box, though a close read of the license may point out that as far as they’re concerned, even the disk and manuals do not belong to you.
This is one of the tricky issues of software, and has been for around 30 years now. On one hand, you know you made a purchase, paid your money and got your product. The law supports your position. A sale has definitely taken place, under law.
On the other hand, the maker knows you made an agreement, and you purchased nothing, but they’re providing you with the box, manuals and software for the duration of that agreement. The law supports their position. A sale has definitely not taken place, under law.
And for three decades this state of tension between two simultaneous but mutually exclusive states has persisted. It’s kind of like what you’d have gotten if Erwin Schrödinger used the Uniform Commercial Code as an example instead of a cat for his thought experiment on quantum physics.
Why is this an issue? Well, for a couple of reasons, not the least of which is that it’s confusing to have two mutually exclusive sets of laws apply to the same thing at the same time.
The other is a matter of rights.
When you purchase a product you are automatically granted a bundle of rights under law. There’s a whole bundle of property rights defined in every legal jurisdiction.
On the other hand, if the EULAs that come with most software stand as written, then you made no purchase, and obtained none of the rights associated with a purchase or with property.
This is an issue that courts generally avoid. Court rulings on the EULA vs sale issue tend to be worded to specifically restrict themselves to a very tight set of circumstances so as to avoid setting a precedent.
Whichever judge actually goes ahead and rules that these software sales are sales, will set fire to an entire industry based around withholding rights from purchasers. On the other hand, if they rule for EULAs, then in theory, the entire notion of property law for consumers (whether for software or any tangible goods) risks being annulled.
Your local fair-trading authority will usually treat software sales as sales, insofar as we’re only talking about relatively tiny amounts of money – at which point they generally switch to looking at them as user-licensing agreements, and punt the matter to a court.
On the whole, though, the issue of sale vs license, and the rights that go with that, are something that really need to be established solidly for our respective courts and legislatures to actually move on to some of the subtler and trickier aspects that a highly interconnected economy brings.
| The last time I clearly remember buying software was sometime in the 1980s. Oh, I still go to stores and pay for software, over and over – and so do you, but if you read the EULAs closely, you’ll find that the makers would have it that you are not purchasing anything at all.
You might think you bought it, but as far as they’re concerned, you’re making a contract, not buying a product.
That contract involves you providing money, and getting some permission to install and use some software. That software is thoughtfully provided in the box, though a close read of the license may point out that as far as they’re concerned, even the disk and manuals do not belong to you.
This is one of the tricky issues of software, and has been for around 30 years now. On one hand, you know you made a purchase, paid your money and got your product. The law supports your position. A sale has definitely taken place, under law.
On the other hand, the maker knows you made an agreement, and you purchased nothing, but they’re providing you with the box, manuals and software for the duration of that agreement. The law supports their position. A sale has definitely not taken place, under law.
And for three decades this state of tension between two simultaneous but mutually exclusive states has persisted. It’s kind of like what you’d have gotten if Erwin Schrödinger used the Uniform Commercial Code as an example instead of a cat for his thought experiment on quantum physics.
Why is this an issue? Well, for a couple of reasons, not the least of which is that it’s confusing to have two mutually exclusive sets of laws apply to the same thing at the same time.
The other is a matter of rights.
When you purchase a product you are automatically granted a bundle of rights under law. There’s a whole bundle of property rights defined in every legal jurisdiction.
On the other hand, if the EULAs that come with most software stand as written, then you made no purchase, and obtained none of the rights associated with a purchase or with property.
This is an issue that courts generally avoid. Court rulings on the EULA vs sale issue tend to be worded to specifically restrict themselves to a very tight set of circumstances so as to avoid setting a precedent.
Whichever judge actually goes ahead and rules that these software sales are sales, will set fire to an entire industry based around withholding rights from purchasers. On the other hand, if they rule for EULAs, then in theory, the entire notion of property law for consumers (whether for software or any tangible goods) risks being annulled.
Your local fair-trading authority will usually treat software sales as sales, insofar as we’re only talking about relatively tiny amounts of money – at which point they generally switch to looking at them as user-licensing agreements, and punt the matter to a court.
On the whole, though, the issue of sale vs license, and the rights that go with that, are something that really need to be established solidly for our respective courts and legislatures to actually move on to some of the subtler and trickier aspects that a highly interconnected economy brings. | |  | |
This entry was posted
on Sunday, 22nd November, 2009.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Possibly related posts
Apple’s app store becoming a hostile environment for virtual marketplaces, and third-party shopping, The property dichotomy, Why I like Imprudence, Learn the words, How to tell if you actually own something
You should have seen the look on my face when I broke the seal on my Windows 7 Ultimate box to find a 32-Bit version DVD inside the case. I started frantically looking for outside labeling indicating if I got the 32-Bit or 64-Bit version until I found it in tiny print on the bottom rear of the box. (>_<)
I was still afraid to pull the disk off the stem and was in an actual cold-sweat when I did so…. Only to find the 64-Bit disk right behind it on a stack-able stem. (=_=)
Oh, what has our market become? (._.)
This creates interesting conundrums. For months I’ve been following a fellow who has been designing an application for novel writing on the iphone and ipod touch – an incredibly ambitious project which he has tackled with much innovation. He submitted this app to apple in the hope of getting it out for the nanowrimo month…. but their approval was a bit late.
When the fellow finally got his app approved by apple and launched on the store I purchased it in support of his project, thinking i’d tinker with it while out and about during nano. Apple took the money yet failed to deliver the application. I now have a license, but no software, and this problem has persisted for all of his customers for 19 days now. http://auteureist.posterous.com/day-19-no-fix
The developer has responded with good humor, even running a competition for an ipod nano for whoever guesses when apple will resolve the issue. Still we’re faced with a conundrum. The developer has delivered, even producing updates and refinements during this period in response to user desires, yet apple, despite taking our cash is yet to deliver. Nanowrimo is almost over.
Now I have a conundrum. Do I ask for my money back, punishing the developer, who _has_ delivered? Apple, the merchant who has screwed up delivery is only minimally invested and would lose a small commission. The developer, who has done exactly what they said they would, is the one who would be punished for apples lapses – both in their tardy approval process, and more so in their tardy response to fixing the delivery of the app.
More confusing still – legally, given the confusing legal status of software sales – what exactly has taken place here? Do I now own it? Who has sold it to me? Who is responsible for the current situation… etc.
What do you think of this post at Wired Magazine’s GadgetLab blog: http://www.wired.com/gadgetlab/2009/11/psystar-guilty-copyright/
Oh Pystar’s case is definitely cut and dry. It boils down to Apple saying “You are installing our software on machines we didn’t make, which is explicitly against our license. Please stop.” Apple has been fairly hands-off when individuals do this, but when someone tries to make money off it they’re well within their rights to either technically block it.
This has been the case with companies that make their phones sync to iTunes by explicitly spoofing apple hardware without a license) or companies like Pystar who sell machines with OSX installed when the license that accompanies the OS they buy explicitly forbids this. They’d get the same treatment from Microsoft for selling OEM versions outside of license, or other such companies.
There are plenty of arguments that perhaps Apple’s approach is anti-competetive in this instance, but it’s perfectly legitimate business – in fact it is the norm. I’ve found Apples licensing compliance fairly light in comparison… you don’t even need to enter a key to install the OS from memory. Microsoft is somewhat different – every time I need to reinstall XP or Vista I need to call an indian call center and convince someone I actually own it.
On the lighter side of the Pystar case, the apple license forbids “installing on a non apple labelled computer.” Helpfully OSX comes with two little apple stickers in the box, so by sticking one to your hackintosh you could argue that it is actually “apple labelled”. This didn’t go down so well in court mind you
Actually (in the U.S.) that precedent already has been made – under the “first sale” doctrine:
“On Tuesday, Judge Richard Jones of the U.S. District Court in Seattle handed down an opinion in Timothy Vernor v. Autodesk, Inc., handing Vernor victory in an important exposition of the first sale doctrine. (H.T. and congrats to Greg Beck). The case also illustrates why notice and notice is a better system for safe harbor regimes than the U.S. notice and take down approach USTR is trying to force on other countries.”
This is from an article that was posted in May 2008:
http://williampatry.blogspot.com/2008/05/first-sale-victory-in-vernor.html
First sale doctrine requires a “lawful copy”. It is fairly easy to argue that installation on unlicensed hardware (if that is part of the purchase agreement) would revoke that licence. First sale protects your right to re-sell only legitimately licensed content.
That is true, Pavig. However, the Apple, Inc. versus Pystar: Apple is in the right because the license explicitly allows the software only to be installed and operated on “Apple-branded” hardware.
Practically all other software (such as where you buy software as an individual item – boxed) – does not have such specification in their licenses. Which is why Autodesk lost their lawsuit and the license was fond to have not been breeched.
Even after I install Apple’s OS-X on Apple hardware, it becomes a sale, not a license as first sale doctrine still prevails as long as if I sell it, I ensure the buyer abides by the license.
Which brings-up the next legal battle: I agreed to and oneyed the license. If I sell OS-X DVD to you, does that meed you have made an agreement to Apple, Inc. with regard to the license when you are purchasing from *me* and not Apple, Inc.?
LOL Gotta love legal BS, hey?