Re: no more free UO

Gerry Quinn <gerryq@xxxxxxxxxxxxxxxxxxx> wrote:
> Like it or not, it's a license you are buying. Try to define your use
> of the word "software" and you'll realise there's no other way to
> define it.

You repeatedly make this claim, and in so doing, you repeatedly ignore a
significant body of case law on the issue.


See, for example, Softman v. Adobe:

[begin quoted text]
A number of courts have held that the sale of software is the sale of a
good within the meaning of Uniform Commercial Code. Advent Sys. Ltd. v.
Unisys Corp., 925 F.2d 670, 676 (3d Cir. 1991); Step-Saver, 929 F.2d at
99-100; Downriver Internists v. Harris Corp., 929 F.2d 1147, 1150 (6th
Cir. 1991). It is well-settled that in determining whether a transaction
is a sale, a lease, or a license, courts look to the economic realities of
the exchange. Microsoft Corp. v. DAK Indus., 66 F.3d 1091 (9th Cir. 1995);
United States v. Wise, 550 F.2d 1180 (9th Cir. 1977). In DAK, Microsoft
and DAK entered into a license agreement granting DAK certain nonexclusive
license rights to Microsoft's computer software. The agreement provided
that DAK would pay a royalty rate per copy of computer software that it
distributed. Subsequently, DAK filed a petition for bankruptcy, and failed
to pay the final two out of a total of five installments. Microsoft filed
a motion for the payment of an administrative expense, claiming that it
should be compensated for DAK's post-bankruptcy petition use of the
license agreement. On appeal, the Ninth Circuit held that the economic
realities of the agreement indicated that it was a sale, not a license to
use. Thus, Microsoft simply held an unsecured claim and not an
administrative expense. The court found that the agreement was best
characterized as a lump sum sale of software units to DAK, rather than a
grant of permission to use an intellectual property. The court in DAK
noted:

Because we look to the economic realities of the agreement, the fact
that the agreement labels itself a "license" and calls the payments
"royalties," both terms that arguably imply periodic payment for the use
rather than sale of technology, does not control our analysis.

DAK, GG F.3d at 1095, n.2. Other courts have reached the same conclusion:
software is sold and not licensed. See, e.g., RRX Indus., Inc. v. Lab-Con
Inc., 772 F.2d 543, 546 (9th Cir. 1985); Applied Info. Mgmt., Inc, v.
Icart, 976 Supp. 149, 155 (E.D.N.Y. 1997) finding that whether a
transaction denominated a "license" was in act a sale conveying ownership
was a disputed question of fact); Novell, Inc. v. CPU Distrib., Inc., 2000
U.S. Dist. Lexis 9975 (S.D. Tex. 2000). In Novell, a software manufacturer
was pursuing a discount retailer for copyright infringement. Like Adobe,
CPU argued that it purchased the software from an authorized source, and
was entitled to resell it under the first sale doctrine. Novell claimed
that it did not sell software but merely licensed it to distribution
partners. The court held that these transactions constituted sales and not
a license, and therefore that the first sale doctrine applied. 2000 U.S.
Dist. Lexis 9975 at *18.

Adobe frames the issue as a dispute about the ownership of intellectual
property. In fact, it is a dispute about the ownership of individual
pieces of Adobe software. Section 202 of the Copyright Act recognizes a
distinction between tangible property rights in copies of the work and
intangible property rights in the creation itself.11 In this case, no
claim is made that transfer of the copy involves transfer of the ownership
of the intellectual property within. (See SoftMan's Suppl. Brief at 9-10)
("Adobe has ownership rights in the copyright of [its] software.").) What
is at stake here is the right of the purchaser to dispose of that
purchaser's particular copy of the software.


The Court finds that the circumstances surrounding the transaction
strongly suggests that the transaction is in fact a sale rather than a
license. For example, the purchaser commonly obtains a single copy of the
software, with documentation, for a single price, which the purchaser pays
at the time of the transaction, and which constitutes the entire payment
for the "license." The license runs for an indefinite term without
provisions for renewal. In light of these indicia, many courts and
commentators conclude that a "shrinkwrap license" transaction is a sale of
goods rather than a license.12

[...]

The Court understands fully why licensing has many advantages for software
publishers. However, this preference does not alter the Court's analysis
that the substance of the transaction at issue here is a sale and not a
license.

[end quoted text]

Q: If you call a tail a leg, how many legs does a dog have?
A: 4. Calling something a leg doesn't make it a leg.

Similarly, simply calling something a license, rather than a sale, doesn't
make it one.
.

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