Software producer finds court of appeals at her side in case against second hand trade

In the US, a federal court of appeal has sided with the software industry in a case about the trade in second hand software. The last few years, the software and games industries have increased their opposition to the trade in used versions of their wares.

The American court has ruled in favour of Autodesk in a case against a used software salesman. According to the contract that users close with Autodesk, the installation of their software happens under a licence, rather than in full ownership. The salesman, that bought unused Autodesk software from garage sales and office sales, was stated not to respect this contract.

The salesman invoked the ‘first sale’ doctrine that provides the judicial grounds in the US for trade of used goods that are copyrighted. This doctrine has emerged form a Supreme Court ruling of 102 years ago, in which the Court stated that rights holders cannot prevent their works being sold again, as long as no copies were made.

Because the Autodesk software hadn’t been installed yet, the first sale had never been truly completed, ruled the judges. Autodesk only provides the key to the product upon installation. It is only in that moment, the judges found, that the first sale is in fact completed.

This ruling might well hamper companies like Netflix and Gamestop that (partly) base their business models on the trade in used games and movies.

The amount of damage that rights holders suffer from the trade in used goods is not very clear, however. Advocates of a second life for games argue that most of the money that is brought into rotation by this trade, is used to buy new games. The second hand trade primarily ensures that the games spread amongst a greater population, amongst people that may not have the money to buy new games on a regular basis.