Many users might be surprised to learn that the software running on their computers is “licensed,” not “sold,” and subject to contractual restrictions that may not necessarily qualify a particular user as an “owner” of a copy of the software with the implicit rights of resale under the Copyright Act’s first sale doctrine. Generally speaking, the first sale doctrine allows owners of copies of copyrighted works (e.g., used books, CDs, DVDs) to resell their copies without restriction, and it is this distinction between sales and licenses that has made the licensing model the preferred method for software transactions. Federal court decisions over the last several years have offered some clarity and highlighted the limitations of the doctrine as applied to hard copies of licensed software, leaving open questions about how the doctrine would apply to downloaded software. However, a recent significant EU decision about the user rights in downloaded software has sparked debate on the issue and has prompted software companies to examine their policies regarding European distribution of their products.
This article will discuss the first sale doctrine generally under U.S. law, the recent European UsedSoft court decision involving the interplay of the first sale doctrine and downloaded software, and some implications going forward.
