Ninth Circuit Finds First Sale Does Not Apply to Used Software Programs

by Janette Spencer-Davis, Legal Editor, CCH Copyright Law Reports   

The U.S. Court of Appeals for the Ninth Circuit has sided with the computer software industry and ruled that the first-sale doctrine does not apply to used software programs. Accordingly, the appeals court overturned the federal district court decision that allowed an online software reseller to resell second-hand software programs he purchased at garage and office sales without copyright liability (Vernor v. Autodesk, Inc., 2010 Copyright Law Decisions ¶29,873). On appeal, the developer of the software programs argued that the first-sale doctrine did not apply because the software was "licensed" rather than "sold." The licensee was not an "owner" of the particular copies of the software and could not sell the copies to the reseller. Because the reseller did not "own" the software programs, he did not have a first-sale right. The appeals court agreed, reasoning that without a definitive sale, the first-sale doctrine is moot. Accordingly, the summary judgment to the reseller was vacated (Vernor v. Autodesk, Inc., 9thCir, No. 35969, to be reported).