Technically Legal

Technology and the law. Done right.

Episode 69: Exhausted Patents

T-Mobile blocks third-party text messages, Apple butts heads with patent exhaustion, Likelihood on Confusion over Paper Towels

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T-Mobile Blocks Third-Party Text Messages

T-Mobile Sued Over Blockade of Text Messages
The Complaint
T-Mobile Issues Statement On SMS Lawsuit, Says EZ Texting Didn’t Follow The Rules
EZ Texting Responds To T-Mobile Statement Over SMS Lawsuit

Apple Butts Heads with Patent Exhaustion

Apple’s MagSafe lawsuit tests limits of first-sale doctrine
The Complaint

Paper Towels

Georgia Pacific’s Effort to Control Towel Dispenser Refills Fails in 8th Circuit–Georgia Pacific v. Myers Supply
Selling Replacement Supplies Could Constitute Contributory Trademark Infringement–Georgia Pacific v. Von Drehle

Comments Off on Episode 69: Exhausted Patents Posted in: Podcast on September 27, 2010

Episode 68: Mr. Fox Builds The Skyhook

Skyhook sues Google, RCN Gets Go-Ahead to Throttle P2P Traffic, and Cybersquatters Get Into Election Politics

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Skyhook Sues Google

Skyhook sues Google for business interference and patent infringement

RCN Gets Go-Ahead to Throttle P2P Traffic

RCN P2P settlement: ISP can throttle away starting November 1

Cybersquatters Get Into Election Politics

Clicking, Landing at

And by 38, we meant 68.  Someone fell asleep at the wheel on Monday.

Comments Off on Episode 68: Mr. Fox Builds The Skyhook Posted in: Podcast on September 20, 2010

Podcast 67: Do You Really Want to Hurd Me

First Sale v. EULAs, HP Sues Mark Hurd, and Apple Revises App Store Guidelines.

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First Sale: Vernor v. AutoDesk

Vernor v. AutoDesk – Vacated (first sale) and remanded (copyright misuse)

Impenatrable EULAs and the Dying First Sale Doctrine: Vernor v. Autodesk
The Opinion

HP Sues Mark Hurd

HP Confirms It Is Suing Mark Hurd For Potential Leakage Of Trade Secrets To Oracle

Apple Revises App Store Guidelines

Statement by Apple on App Store Review Guidelines
A Taste of What’s New in the Updated App Store License Agreement and New Review Guidelines

Comments Off on Podcast 67: Do You Really Want to Hurd Me Posted in: Podcast on September 13, 2010

Impenatrable EULAs and the Dying First Sale Doctrine: Vernor v. Autodesk

Today, the Ninth Circuit issued its opinion in Vernor v. Autodesk, reversing the district court’s ruling which held a sale of software transferred ownership of the copy to a customer and not a mere license.

This case hits on a number of fascinating legal topics (first sale, UCC, licensing rights, statutory interpretations of copyright act, copyright misuse, etc) that are not easily explained in a simple blog post.  Hopefully we can pick this one up for discussion on this week’s podcast and give it some more thought.  In the meantime, here’s a quick rundown of facts/holdings and some quick observations:

Copies of AutoCAD are normally sold from Autodesk (the developer/marketer) with a software license agreement (a/k/a a EULA).  Although there are a few different versions of the license, all of them clearly state that Autodesk retains title to all copies and the customer is receiving a non-exclusive, non-transferable license to use the software.  Also, these agreements state the license terminates upon non-compliance and, if the software is an “upgrade,” the customer “must destroy [any AutoCAD software] previously licensed” to them,  “including [hard and soft] copies, within 60 days of purchas[ing] the upgrade.”

A person named Vernor bought several copies of used AutoCAD, from a few different sources — includes at least a garage sale and an office sale (think “going out-of-business” sale) from a company named “CTA.” Each copy was apparently in a product box, which had already been opened (no shrink wrap on the outside), contained the necessary optical media, and activation code. Vernor never installed any of the copies on his computer — and instead listed them for sale on eBay.

Autodesk, threatened to sue for copyright infringement and sent takedown notices each time they found an eBay listing. Vernor counter noticed each time and sold a bunch of copies.

Eventually, after nearly losing his eBay account, Vernor wrote to Autodesk and argued that he had the right to sell copies of the software under the first sale doctrine (which limits a copyright holder’s ability to collect royalties following the first sale of a hard copy, see 17 USC § 109) since he bought it used.  Vernor also argued that the license agreement did not apply to him, because he never agreed to it or installed the software (no “I agree” click-through UI splash).

Autodesk disagreed. Then, Vernor sued Autodesk seeking a declaratory judgment (asking the judge to declare he was not infringing) and alleged copyright misuse. The District court (see MTD and MSJ orders) held Vernor’s sales were not copyright infringements based on the first sale doctrine but never resolved the misuse of copyright claims. Autodesk appealed to the Ninth Circuit.

Interesting questions posed and the ninth circuit’s (paraphrased) answers:

(1) Were the original copies sold or licensed by Autodesk, despite what the license said?

Ninth cir: The AutoCAD EULA is a license, because Autodesk called the EULA a license, restricted the customer’s ability to transfer a copy of the software upon sale, and had a series of additional restrictions on use.

(2) Since the Autodesk EULA allowed “indefinite” possession of the software in perpetuity, can it still be a license?

Ninth Cir: Yes, it’s still a license. The ability to hold rights in perpetuity is a factor in analysis, but not dispositive by itself.

Result: The right to use software is distinct from the right to own it, at least in this case.

Why is this opinion important? There are a lot of journal articles that devote hundreds of pages to this topic and argue both sides fervently on the merits – instrument drafting and UCC Art. II sale/license distinctions, software policy. They are all worth reading — I love thinking about these things as a lawyer.

But, as a consumer, I’m bummed by what I perceive to be the death throes of the first sale doctrine. I wonder if it’s only a matter of time before (possibly not even within my own lifetime) that all (or at least most) media will only be available in these restrictive formats, with licenses or DRM, the concept of a secondary media market is lost, and the first sale doctrine will be as dusty and forgotten as the 3d Amendment.

1 Comment Posted in: Analysis, Commentary on September 10, 2010

Juror Ordered To Write Essay Due to Facebook Posts

A judge ordered a juror to write an essay about the Constitutional right to a fair trial, because the juror posted the verdict on Facebook before it was announced in court.

The juror was out of line in posting that information on Facebook. Jury deliberations are secret, and the jurors are told that they aren’t to discuss the case with anyone until it is complete. It’s fairly clear that you wouldn’t be allowed to post about it on Facebook or other social networking site.

The reason I’m posting this is that the judge was out of line in requiring the juror to write an essay. It’s just as unconstitutional to make someone say something, as it is to prevent them from saying it. The judge should have had to show that the essay was narrowly tailored to some compelling state interest.

I’m sure that ensuring a fair trial is a compelling state interest, but the essay is not narrowly tailored to that interest. The violation had already taken place, and there are other, less intrusive ways to get the point across.

Comments Off on Juror Ordered To Write Essay Due to Facebook Posts Posted in: Analysis on September 8, 2010

Episode 66: Private Eyes

Apple files for patent on biometric security, Google Trims Privacy Policy, Craigslist Pulls Adult Services.

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Apple Filed Patent for Biometric Security

Steve Jobs Is Watching You: Apple Seeking to Patent Spyware
The Patent Application

Google Trims Privacy Policy

Trimming our privacy policies

Craigslist Pulls Adult Services

Craigslist unexpectedly pulls adult services listings

Comments Off on Episode 66: Private Eyes Posted in: Podcast on September 6, 2010

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