Buyers of hardcover books do not garner any rights in the author’s copyright, but may freely sell used copies or give them to friends. Indeed, under the first sale doctrine of the Copyright Act, consumers may sell or otherwise dispose of used books, CDs, DVDs, or other copyrighted goods purchased in the marketplace. But what about copies of mass-market software?
Generally speaking, most software is licensed, not sold, and subject to contractual restrictions that may not necessarily qualify the user as an “owner” of a copy with the implicit rights of resale. Yet despite the “license” label on mass market software, there is no bright-line rule that distinguishes mere licenses from sales. During a dispute, a court may recharacterize a supposed license arrangement as a sale after looking at the incidents of ownership, namely the payment structure of the transaction and the restrictions on use and transfer, among other things.
