Psystar Loses Big To Apple

from the and-so-it-goes dept

When Psystar first started selling PCs with Apple OS's installed on them, we knew there would be a lawsuit -- though it took a bit more time than we expected. Originally, Psystar tried to claim that Apple was violating antitrust law, which seemed like a wasted path for exploration -- and, indeed, a court rejected that claim. Then Psystar went back to more reasonable defenses... or so we thought.

The court hearing the case didn't seem to think any of Psystar's main lines of defense had any validity at all and granted summary judgment to Apple on all of the major points, saying that a trial wasn't even necessary. The "fair use" claim was already weak, and the judge noted that Psystar didn't even try to discuss any of the four factors generally used in determining fair use. The two (I thought) stronger claims were that (a) the right of first sale applied, and once Psystar purchased OSX legally, it could resell it, provided it was only installed on that one computer, and (b) that Apple went too far in its EULA terms, which demanded that OS X could only work on a Mac. Unfortunately, the judge didn't agree to either one, though I find the judge's reasoning perplexing and hardly convincing.

On the issue of first sale, here's what the ruling said:

The copies at issue here were not lawfully manufactured with the authorization of the copyright owner. As stated, Psystar made an unauthorized copy of Mac OS X from a Mac mini that was placed onto an "imaging station" and then used a "master copy" to make many more unauthorized copies that were installed on individual Psystar computers. The first-sale defense does not apply to those unauthorized copies.

Perhaps I'm missing something here, because earlier reports had suggested that Psystar legally purchased each copy of OS X and then installed the legally purchased copy on the new machine (which it then included with the sold machine). But from the description above, it sounds like part of the problem is that a single "master copy" was used to make multiple installations. Of course, that raises a whole host of separate issues. If Psystar legally purchased a separate license for each one, but still used a single master copy, is that really infringing? After all, the code is identical, and it seems positively ridiculous to say that even though you bought, say, 20 licenses, you can't just use one master copy to install 20 times. It seems like this could use additional clarification. Because, the other way one could interpret this is that there is no right of first sale if the company says a copy is unauthorized -- which would have troubling implications.

On the EULA front, the court again basically just takes Apple's position, and insists it did nothing wrong. I'm not surprised by the outcome at all, but I would have expected at least a more complete response to the First Sale doctrine rights issues. Even ignoring that a "copy" was being made -- with the physical copy, it really is a matter of first sale. The company is selling something it legally purchased.

Psystar will likely appeal, though I still have little faith that will get anywhere.

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Nanda's Alarm Clock Not Only Runs Away From You, It Runs Away From eBay Too

from the wake-up-nanda dept

It looks like more tangible product companies are trying to pretend they can restrict what you do with legally purchased products post-sale (perhaps they're jealous of content companies). Case in point: my brother received the Nanda Clocky as a gift awhile back -- it's a pretty novel alarm clock, when it goes off, its wheels turn on, and it jumps off your dresser, forcing you to climb out of bed to turn it off. Since he already had an alarm clock that worked for him, he decided to sell it on eBay. A few days before his auction was supposed to close, he got a notice that his listing was removed for a "Trademark Violation - Unauthorized Item." Yes, for a legitimately owned product. The email stated:

"Nanda Home Inc. is the owner of the intellectual property rights pertaining to these listings. By listing the 'Clocky' product you are in serious violation of the company's rights. Additionally, Nanda Home does not permit the re-sale of any of their brand product on eBay. There are no authorized Nanda Home re-sellers on eBay. If you continue to list our items, further legal action may be taken."

Clearly, Nanda has a gross misunderstanding of the right of people to re-sell their own property. While it's true that it is against the law to sell counterfeit copies of a product, re-selling your own goods and representing them as "real" is completely within the bounds of the law, and eBay policy. To make matters worse, the condescending tone of the email also suggests that:

"You may need to take a tutorial. The next time you sell, you may be asked to take the tutorial, if it's required. Once you've completed the tutorial successfully, please review your account status for any other possible concerns. If there are no other issues, you should be able to sell again."

Or, perhaps Nanda and eBay should take a tutorial on the right of first sale. In the aforementioned tutorial, eBay clearly understands the right to re-sell (in fact, a huge part of its business relies upon this fact). Yet, to make matters worse under eBay policy it's still a laborious process to get the item relisted -- even with the bogus takedown notice. As a seller of an incorrectly taken down Clocky listing, you have to contact Nanda and have them specifically authorize your product to be re-listed. Yes, even though it's Nanda who issued the incorrect takedown in the first place. So much for frictionless commerce.

The even bigger problem is in the process in which such listing takedowns are handled. Under the guise of rooting out counterfeit products, Nanda is able to unfairly reduce the number of its own secondhand goods in the marketplace. Other manufacturers have tried to do this in the past for everything from shampoo to radar detectors. And, much like the DMCA process, this "guilty until proven innocent" approach ultimately hurts the consumer, who now has unfairly reduced access to many products that were to be sold completely legally.

That said, my brother followed the eBay process to get his Clocky relisted. They sent him an email apologizing for their error and authorizing him to relist, which he did. Guess what? In an effort to punctuate how ridiculous this policy is, one day later, he got an email, "Trademark Violation - Unauthorized Item."

Anyone want to buy a Clocky?

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Can A Radio Station Give Away Tickets To A Football Game? The Eagles Say No...

from the right-of-first-sale dept

We've noted the trend of trying to cut down on scalping by using e-tickets to stop the transfer of tickets, but it appears that the Philadelphia Eagles football team also is trying to stop radio stations from doing promotional giveaways. The team has sued the owner of the radio station, saying that the terms on the back of the ticket forbid the use of the tickets for commercial purposes -- such as contests -- and also that the station is violating the Eagles' trademarks in naming them around the ticket giveaway promotion. This raises a bunch of questions about the right of first sale on a ticket. While the stadium may have the right to forbid entry to anyone, it seems like that would be a dumb move on the team's part. My guess is that the team's main concern is that it only wants partner (i.e., those who paid a ton for broadcast rights) radio stations to give away tickets -- but that doesn't mean there's a legal right there. If the tickets were legitimately bought, why shouldn't the station be able to sell them or give them away? And, considering that the radio station was accurately describing the team when using the name, that shouldn't be a trademark violation.

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Ownership Or License: The Difference Matters

from the quantum-bullshit dept

Those who rely on copyright like to do a neat little trick at times. When it's convenient, they like to claim that what they're offering is no different than a physical good. In such situations, if you make a copy, they claim that you "stole" it, and that it's "no different" that walking into a store and taking something off the shelf without paying for it. Yet, at other times, if you point out the sorts of restrictions that would lead to -- such as no control over the product post-sale -- suddenly they change their tune. You didn't buy the product, you merely "licensed" it, and thus they could post sale restrictions on things. If you buy a chair, and then build a replica yourself, that's perfectly legal. But copyright holders claim that's not the case when it comes to products covered by copyright -- because they insist that it's "licensed" not "owned."

Luckily, the courts have long pushed back on this attempt by copyright holders to extend copyright's power beyond what happens with physical goods. That's why, for example, we have a right to first sale, allowing you to resell a book. The copyright holder cannot claim that you only "licensed" the book, rather than bought it, so you are, in fact, allowed to resell it. But the law isn't entirely clear on all aspects of this, and software "licensing" is one key area where there are some problems.

A few years back, Blizzard sued the maker of a bot, the Glider bot by MDY, claiming that the software violated its copyright. Now, even many who are against abuses of copyright, emotionally started to side with Blizzard here, due to what the bot allowed: it effectively allowed cheating, by automating many repetitive tasks, to let users "level up" more quickly. But, if you get past that element, the case has important implications for copyright law, and whether or not the software you buy is really purchased... or merely licensed.

The district court ruling was incredibly problematic. Nothing the guy actually did with the bot software appears to violate copyright law. Basically, the court just decided that it didn't like what the guy did, and thus it used copyright law to shut him down, though it used rather tortured reasoning. This sets an incredibly bad precedent and seems entirely at odds with the purpose of copyright law itself.

The case is now being appealed, and Public Knowledge has filed an amicus brief while the EFF explains what's at stake:

Ownership matters, because otherwise Blizzard and other software vendors can wipe away important consumer rights with legalese contained in license agreements. For example, in Section 117 of the Copyright Act, Congress gave owners of computer software the right to use their legitimately purchased software without having to rely on permissions in license agreements. Blizzard and other software vendors are arguing that customers are not owners, but mere licensees, in an effort to eliminate our rights under Section 117.

This "owner-versus-licensee" trick is not just an end-run on Section 117, it's inconsistent with the law in other areas--the courts and Congress have long rejected efforts by copyright and patent owners to impose all kinds of post-sale use restrictions on books, patented machines, and compact discs. Why should software be different? Just as with those other copyrighted works, if you bought the disc that the software comes on outright (as opposed to leasing it, for example), you should get the privileges of an owner (i.e., the right to resell and the right to make copies and adaptations as necessary to use software).

In short, Blizzard's legal arguments here are all about using copyright law to take away consumers' rights in the software they purchased.

Hopefully, the Appeals Court recognizes this. Copyright owners shouldn't be able to play a quantum game of calling something "owned" when it suits them or "licensed" at other times when it suits them.

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If You Build A House Based On Copyright Infringing Plans That You Bought In Good Faith... Are You Infringing?

from the maybe-so dept

Michael Scott points us to an interesting -- if a bit technical legally speaking -- discussion over whether or not indemnifications exist for copyrighted materials. The discussion involves a homebuilder, who built some homes based on plans he bought from a third party. It later turned out that the plans were infringing copies, but the builder believed they were legit. So, in any common sense world, the liable party should be the guy who sold the infringing plans. But at least some lawyers and judges seem to believe that there is no indemnification in copyright law, and thus the copyright holder can basically sue whoever he wants up and down the chain. But, of course, not everyone sees it that way, and by the end of the post, it's pretty clear that the court in this particular case got it wrong. Blaming the builder, who had no clue that the plans were infringing, simply makes no sense.

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Psystar Back To A First Sale Defense Against Apple: Software Was Legally Purchased...

from the and-we-can-do-what-we-want-with-it dept

Psystar tried and failed to pin an antitrust case on Apple in its fight over whether or not Psystar can install MacOS on non-Apple hardware. Now, it appears that the company is back to where we thought it would originally focus: on whether or not a software license agreement can preclude the first sale doctrine that allows you to resell software you legally purchased. It's still a long shot -- but a few recent rulings suggest the courts are at least more open to these discussions. Of course, if Psystar wins, it could severely limit the power of end user license agreements (EULAs) that software companies often use to limit uses of software.

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Is Motorola Trying To Ban Reselling Phones?

from the hopefully-not dept

We've seen video game execs freaking out about the second-hand sales market, and apparently that may be expanding to other arenas. The Register has an unnamed source (so make of that what you will) claiming that Motorola is asking people to sign contracts on a new phone that ban the buyer from reselling the phone to anyone, other than back to the manufacturer. Of course, this is an economically dumb argument. The resale market helps add value to the primary market, and allows the company to charge more for its product initially. As Mathew Ingram points out, some are suggesting that this move would violate the first sale doctrine, though that could depend on a variety of factors. I would imagine that the terms could establish the situation as a "lease" of the phone rather than a purchase, but that might be difficult to get the courts to accept. Also, my understanding of first sale doctrine was that it only applied to intellectual property -- not physical goods, so I'm not sure it would really apply here. Either way, it would seem to be dumb, whether or not it's legal. If you want to decrease interest in your product, adding such a clause seems like a reasonable way to do so.

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Australian Artists To Get Paid Multiple Times For Their Artwork

from the wouldn't-that-be-nice dept

We've discussed in the past how various countries have been putting in place a ridiculous resale right for artists, that allow them to collect a royalty every time their artwork is sold. In other words, this removes the important right of first sale, that says when someone buys a piece of artwork, they actually own it. Instead, these "resale rights" let various artists collect a "royalty" every time the art is resold. That would be like saying you need to pay Honda a royalty after you sold your used car. Reader madlep points out that Australia has now gone down the same road and instituted a 5% fee on any resold artwork for the artist.

The Arts Minister who supported this is apparently Peter Garrett, who some of you may recognize as the lead singer of the popular rock band Midnight Oil (who I saw in concert many, many years ago). He claims that: "It's a really, really good day for Australia's artists," but that betrays a rather troubling lack of understanding of basic economics. Adding this resale right, actually serves to significantly depress the market for these artists that he's supposedly trying to protect. Because any buyer now knows that there's an additional tax on any resale, meaning that they're less willing to purchase in the first place (or only interested in purchasing for a lower price). It also makes them a lot less willing to sell the piece, because the selling price now needs to be even higher. On top of this, it will encourage more sales to be to foreign countries, where this "right" does not apply.

Garrett is also confused in saying: "Why should artists not have had the opportunity for some copyright protection of their work, or equivalent rights that writers, for example, have?" There's a very easy answer to that. Copyright protection is designed to deal with the issues of copies, not the original works. When it comes to these artists, they're selling original works. And, when I put my old Midnight Oil tapes and CDs up for sale, I'm certainly hoping that Garrett doesn't expect to get paid again for them. That would just be silly. He already received the money when I purchased them originally -- just as these artists received their money when their artwork was purchased.

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Blizzard Bot Ruling Sets A Dangerous Precedent On Copyright

from the not-a-good-thing dept

Earlier this year, we wrote a couple times about how World of Warcraft maker Blizzard was suing a bot maker. In that case, Blizzard was claiming that the bot maker (which let users automate certain tasks to quickly rise up in experience level) was violating its copyrights first by getting around the copy protection on its own spybot (which tries to prevent such automation) and then by not obeying the terms of the license agreement. As we pointed out in May, if the court ruled in favor of Blizzard on the license agreement question, it would effectively ignore the right of first sale by letting any company simply announce that it wasn't selling its product, but licensing it -- and then create all sorts of rules well beyond what copyright allows.

Unfortunately, the judge has now sided with Blizzard in a summary judgment on this issue. The one bit of good news is that it rejected the DMCA part of the claim, saying that the bot maker did not violate the anti-circumvention clause. However, the rest of the ruling is quite troublesome. Basically, the court ruled that as long as a company selling you a product says it's only licensing you the product (even if every other aspect of the sale appears to be a sale), then it can set pretty much whatever rules it wants -- and if you violate them, charge you with violating copyright. This leads to some really tortured reasoning, because, as William Patry notes, nothing the guy did actually violates copyright. Instead, the court had to spend eight pages trying to piece together two separate parts of the license agreement to make a case that copyright was somehow violated.

This ruling flies in the face of other recent rulings that found that just because a company claims it's only licensing you a product, it doesn't mean that it's true. There was the Autodesk ruling, saying that a software sale is a software sale, and the used promo CD ruling that says record labels don't get to put extra copyright restrictions on promo CDs just because they write something across the cover. Unfortunately, the judge in this case decided otherwise. Not only does this result in bad policy (now anyone just needs to say they're licensing you something rather than selling it, and they can put additional restrictions beyond copyright on it, effectively dismantling copyright) but it's also a misreading of the law itself (despite what the court says). Hopefully, it will be overturned on appeal.

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Court Rules That Selling Promo CDs Is Perfectly Legal

from the huge-win dept

There was a big win for copyright and the concept of the first sale doctrine today, as a court has ruled that record labels cannot stop the sale of a promo CD just because it's stamped with a message that says "not for resale." We had discussed this case last summer, when it was first filed. Universal Music was trying to prevent a guy selling promo CDs on eBay. He had bought them at various music stores. Universal claimed that because the CDs were stamped with that "not for resale" message, they really retained ownership of those CDs and no one could sell them. This would go against the very concept of the first sale doctrine, and, thankfully the court agreed, trashing Universal's weak claim that just by writing a note on any piece of content, it could ignore copyright law and retain ownership of the good forever.

This is a big victory, as a loss would mean that content providers could basically create their own copyright rules for any content they sold, potentially limiting it in much greater ways than copyright already does. This ruling, coming right after the Supreme Court's ruling in the Quanta case, about a similar issue involving patents, hopefully will block companies from trying to pretend they get to retain total control over goods even after they're sold.

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Supreme Court Says Patent Holders Can't Shake Down Entire Supply Chain

from the big-win dept

The Supreme Court continues to bring a bit of common sense back to the patent system. While most of the tech world was sitting around paying attention to whatever Steve Jobs has to say this morning, the really big news in the tech industry may be the Supreme Court's decision that patent holders can't shake down the entire supply chain, by forcing each level of the supply chain to also license the patent (even if they bought a product from someone who had licensed the patent).

This the LG v. Quanta case that the Supreme Court agreed to hear last fall. Basically, LG had some patents that it licensed to Intel. Intel then sold products based on those patents, which its customers used to build other products. LG demanded license fees from those customers as well, even though they bought fully licensed products from Intel. LG insisted that since its contract with Intel said that the license didn't cover any additional products, then the patents had to be relicensed by each player down the supply chain. To some extent, this question of "patent exhaustion" is similar to questions about first sale doctrine when it comes to copyright, in determining if you have a right to actually resell a product that was legally purchased. And, thankfully, the Supreme Court agrees that patent exhaustion is an important concept.

This is yet another very important limitation on patent holders, preventing them from stifling innovation at every step of the product process, and double-, triple- and quadruple-dipping off a product based on a single use of their patented invention. Hopefully this will lead to the quick dismissal of a bunch of cases that were filed last fall against a ton of companies up and down various supply chains. A lot of patent hoarders, fearing this exact decision, tried to just sue everyone at once, hoping for quick settlements before the Supreme Court stepped in. It's great to see the Supreme Court taking such an active interest in rolling back massive abuses of the patent system. Update: The EFF has a good take on the ruling, noting some of the holes in it, suggesting that it's unfortunate the the Supreme Court wasn't as clear as it could/should have been.

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Courts Should Reject Blizzard's Assault on the First Sale Doctrine

from the contract-or-copyright? dept

We've written before about the ongoing fight over the legal status of end-user license agreements. Many software companies have tried to claim that breaking an EULA is copyright infringement, which often carries harsher penalties and stronger remedies than mere breaches of contract. The courts have generally resisted these arguments, holding that a copyright holder cannot expand the scope of copyright simply by attaching a "license" to its products. The Electronic Frontier Foundation points to the latest skirmish in this debate: Blizzard has taken the position that using a piece of software called Glider to cheat in World of Warcraft is not only contrary to the game's license agreement but is copyright infringement as well. Indeed, on Blizzard's theory, any violation of the license agreement would constitute copyright infringement.

Public Knowledge has submitted a brief in the case pointing out the real problems the courts would cause if they accepted Blizzard's argument. For example, among the terms of the World of Warcraft license are rules about what you can name your in-game characters. Blizzard's theory would mean that if you choose a name that violates those rules (such as naming your character after a "popular culture figure, celebrity, or media personality"), you would not only get kicked out of the game, but you would be liable for copyright infringement too! This is plainly not how copyright is supposed to work, and PK rightly urges the court to reject Blizzard's over-reaching argument. Perhaps most troubling, accepting Blizzard's argument would mean that software vendors would have the power to dictate who may make software that interoperates with their products. Outside of the much-reviled DMCA, copyright law has never given software vendors this kind of control, and there's no good reason to start now.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Will Psystar Represent A Key Case Concerning Enforceability Of EULAs?

from the let-the-lawsuits-begin! dept

A few weeks back, a company named Psystar made some news by offering to sell PCs with Mac OS X installed. This raised questions about how legit this offer was. After all, when Steve Jobs returned to Apple years back, he killed off all licensing deals that allowed any kind of Mac clones. However, the company has been showing off the clones it's created. Now, the questions are all about whether or not Psystar's actions are legal. The company (of course) says it is legal, and that it's buying a legal copy of the operating system and installing it on PC hardware. However, the end user license agreement (EULA) includes the following:

"This License allows you to install, use and run one (1) copy of the Apple Software on a single Apple-labeled computer at a time. You agree not to install, use or run the Apple Software on any non-Apple-labeled computer, or to enable others to do so."

That would seem to preclude what Psystar is doing. The News.com article above does an excellent job laying out the legal issues here. While the courts have found various clickthrough EULAs enforceable (even though no one -- including the companies themselves seem to read through them), it's possible that Psystar could attack the EULA from other directions. As the article notes, it could try to use the first sale doctrine (which allows you to resell copyrighted products you've bought) but that likely won't fly. What may be most effective (even if it's still a long shot under the law) is to claim that the EULA illegally "ties" the software to Apple's own hardware. However, making a claim about tying is quite complicated, and it seems unlikely that Psystar would prevail. This seems unfortunate for the market -- as getting some additional competition into the market would only help drive innovation. But, under the current law, it's difficult to see how Psystar can win.

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New RIAA Argument: Throwing A Promo CD In The Garbage = Unauthorized Distribution

from the next-up:-picking-your-nose=distribution dept

Last summer, the EFF sued Universal Music Group, after UMG had eBay takedown the sales of certain CDs. The CDs were promotional CDs, purchased legitimately by a guy going to LA record stores. However, UMG claimed that the CDs, as promotional items, were still the property of Universal Music Group. The EFF charged that UMG was abusing the law, specifically by ignoring the right of first sale, which is enshrined in copyright law allowing you to resell CDs or other works that contain copyrighted material. In response, UMG has now filed a brief that says that throwing out a promotional CD is unauthorized distribution.

Effectively, UMG is saying that merely by putting some fine print on a CD, it can effectively "own" that CD forever. If the court agrees, this would have some rather stunning ramifications, effectively wiping out the first sale doctrine. Record labels could then include similar language on all CDs, not just promo CDs, and then basically create its own copyright rules, preventing any use other than what the record label decided to allow. That would seem to go against much of historical precedent (and basic common sense) surrounding copyright. Courts in the past have noted time and time again that just because you say something is true, it doesn't mean it necessarily is true. Hopefully the court will make that point once again.

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Author Sues Amazon And eBay For Having Used Copies Of His Books For Sale

from the please-google-first-sale-doctrine dept

Eric Goldman alerts us to yet another ridiculous lawsuit that is likely to be tossed out of court incredibly quickly. In the meantime, though, it's worth looking at, just for the amusement factor. An author (who isn't worth naming here) has sued both eBay and Amazon because used copies of his books are for sale on both sites. He claims that this is a violation of his copyright, and claims that this "piracy" is no different than what the music, movie and software industry faces when they see their products downloaded. Apparently, he's never heard of the first sale doctrine, recognized by both the courts and directly within the law, allowing the legal owner of a copyrighted work to transfer that work to someone else. He also seems to be unfamiliar with the various safe harbors that would protect both eBay and Amazon from the actions of its users. But, to make it even more fun, before filing the lawsuit, he sent letters to the companies asking for half a billion dollars to shut him up. After claiming that he would clearly win a lawsuit leading other authors to sue as well, he literally says in his letter to them: "should I be compensated fairly, I will be as quiet as a church mouse.... I think [a] number in the high seven figures will be fair enough for me to suddenly catch amnesia." If his novel writing is as unsubtle as his legal threat letters, one would be hard pressed to believe that his books sold very much either at full price, or in these "used" sales.

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Is Selling A CD You Found In The Trash Copyright Infringement?

from the so-sayeth-the-courts dept

Various courts have held that by putting something in the trash, you are relinquishing your ownership of those goods. However, apparently that might not apply to music. William Patry has the story on an unfortunate decision by our court system, suggesting that if you find a CD in the trash and sell it you may be charged with copyright infringement. The story of the case is as follows: BMG famously offers a CD and DVD "club" that sends out new CDs and DVDs on a regular basis to subscribers. Sometimes those subscribers move and cannot be found or for whatever reason the discs are determined to be "undeliverable." BMG so devalues its own discs that it has told the post office to throw out the undeliverable discs, rather than spend the postage to have them sent back to BMG. The post office dumps the discs in its dumpsters -- at which point a Postal Service employee dumpster dives to rescue them. He then goes and sells those discs to local stores, cashing in to the tune of nearly $80,000. This gets discovered, and he gets charged with mail fraud before settling on charges of copyright infringement.

However, what no one seems to clearly explain is where the infringement is? BMG instructed the CDs to be thrown out. The Post Office threw them out. At that point, the property has been relinquished by BMG and the Post Office, so it would appear that anyone who finds the discs wouldn't be committing any kind of infringement (or, for that matter, fraud) in selling them. A lower court ruling was especially bizarre, in demanding that the guy give up all the money he earned to BMG due to the "lost opportunity" to BMG in selling the music. As we've discussed at length before a "lost opportunity" is not an actual loss and it's not a crime. It's simply a marketing challenge. Otherwise, just about any business could be guilty of creating a "lost opportunity" for any competitor. The pizza shop down the street creates a "lost opportunity" every time I eat there instead of the deli. Hell, just buying one musician's CD rather than another's creates a "lost opportunity." So, it's ridiculous to equate a "lost opportunity" to a crime -- and even worse when that "lost opportunity" was self-created by BMG choosing to throw out the discs.

Luckily, the Appeals Court tossed out the "lost opportunity" part, but as Patry notes, it doesn't appear that anyone questioned how the facts of this case could possibly be considered copyright infringement. Selling used CDs is considered to be perfectly legal and non-infringing. How is selling CDs that have been thrown in the garbage any different?

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UK Politicians Support Having Musicians Paid Multiple Times If Tix Are Resold

from the first-sale-is-for-suckers dept

A month ago, we noted that the managers of some well-known bands were pushing for a rule that would require anyone reselling concert tickets to contribute some of their profits back to the musician. It's difficult to see how this is reasonable. If anything it sounds like double dipping. In a normal transaction, after you've sold something, you no longer have a right to have any say over what the buyer does with his purchase. If he sells it for more money, that's his to keep. That certainly seems fair to everyone. What is clouding this when it comes to ticket sales is that professional ticket resellers have been monopolizing the ticket business, figuring out ways (sometimes using questionable means) to buy up all hot tickets within seconds of them going on sale. They then quickly turn around and resell them, sometimes at greatly inflated prices. This is upsetting many fans for completely understandable reasons -- and so the government is trying to figure out what to do about these "touts" (which in the US we call "scalpers").

The recommended policy starts off well by saying it's not a good idea to ban ticket sales, but then supports requiring any resale to kick back some of the profit to the musician or sports team. That actually seems like the worst of all world's situation. That's unlikely to stop ticket resales and jacked up prices, and it actually rewards the artists for getting the tickets into the hands of resellers. It gives those performers a chance to double dip on much higher ticket sale prices, while allowing them to shrug and say that they really priced them at an affordable level. There are ways to deal with the issues raised by ticket resales, none of which require government intervention -- but it's difficult to see how the proposed solution does anything at all to help, while doing plenty to eat away at the concept of having ownership of a product you actually bought.

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eBay Strikes Back, Sues For Frivolous DMCA Takedowns

from the good-for-them dept

For quite some time we've seen companies try to make bogus intellectual property claims against people reselling their products on eBay. For example, a company making shampoo once claimed that you couldn't resell its bottles online -- even when legally purchased. The companies always claim that only "authorized" resellers are allowed to sell their products, and they must do so at a specific price. Last year, when the Supreme Court changed rules about whether manufacturers could demand retailers abide by a specific price, it kicked off speculation that we'd see more such cases. In fact, that's exactly what happened. In one case, a company named Innovate! Technology claimed that someone selling their products on eBay violated their intellectual property (including patents, trademarks and copyright!). The real complaint, of course, had nothing to do with intellectual property, but that this seller was selling below the company's official pricing. This seemed pretty ridiculous already, but these types of cases are designed to scare off small time sellers who don't have big legal guns to back them up.

However, Innovate appears to have made a huge strategic error that has brought some big legal guns into the case, and they're clearly pointed at shooting Innovate's use of the DMCA down. Greg Beck writes in to note that while the case was directly between Innovate and the eBay seller, Innovate made the mistake of pushing to get eBay involved in the case. Normally, eBay just does what's required of it in DMCA cases and gets out of the way. However, now that eBay is involved, it got involved in a big way. It's fighting back against Innovate, claiming that Innovate has been filing bogus DMCA requests and so now eBay is seeking damages, attorney's fees and an injunction preventing Innovate from filing any more DMCA notices to eBay. In other words, it's trying to make an example of Innovate. Hopefully it works, and others pursuing this same strategy of trying to stop legitimate competition through bogus DMCA notices will think twice before continuing.

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Autodesk Sued By eBay Seller For Pretending Right Of First Sale Doesn't Exist

from the ah,-copyright-law dept

The folks over at Boing Boing are pointing us to a very interesting case where an eBay seller who was kicked off eBay is now suing software maker Autodesk for $10 million. The case raises some important issues that don't get nearly enough attention. In copyright, the right of first sale is designed to allow anyone who buys a copyrighted product the right to resell it without going through the copyright holder -- just as when you buy a chair, you can resell it without the manufacturer's permission. In fact, studies have shown that an active secondary sales market often helps boost the size of the primary market (if you'll be able to resell a product later, you're probably willing to pay more for it initially). However, short-sighted copyright holders don't always see things that way.

In this case, the guy had a legitimately purchased copy of AutoCAD and was trying to sell it on eBay. This should be perfectly legal. He had purchased a good and was trying to resell it. Assuming he had removed all copies on his own computer and wasn't using the software any more, there should be nothing to complain about here. However, instead, Autodesk sent eBay a DMCA takedown notice, claiming that the sale was a copyright violation. This would appear to be an abuse of the DMCA, sending a takedown notice on content that the seller has a legitimate right to put up for sale. Abusing the DMCA with false takedown notices can get you in a lot of legal hot water.

However, once again, the case takes a bit of a twist. Autodesk is claiming that the right of first sale doesn't apply in this case, because the guy did not purchase the software, but merely licensed it, thanks to the shrinkwrap license found inside the box, which the purchaser doesn't get to read until well after he or she has "purchased" the software (which appears like any normal purchase, rather than license). Unfortunately for Autodesk, some courts have already ruled that, despite mind-numbing EULAs that no one reads, if you purchase... er... license software, you still get certain ownership rights, which likely include the right to then sell the software. This case seems to have a little something for everyone interested in software and copyrights, between the questions on first sale doctrine, DMCA abuses and shrink wrap EULAs. It should be worth paying attention to as it moves forward.

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