Congratulations on purchasing your new computer software! Please ignore the paragraph of legal jargon and click the “I accept” button to prevent you from ever reselling this software. Do not worry ifyou have not even opened the box or never intend on using the software-the button is just for show.
In today’s evolving world of computer software and software licensing, complex copyright laws often conflict with the average consumer’s understanding of everyday commercial transactions. What may appear to be a simple outright sale of software might turn out to be a complicated license, subject to myriad limitations and restrictions. This tension in copyright law is at the core of the Ninth Circuit’s decision in Vernor v. Autodesk.1 From the Copyright Act itself to the interpretations by the courts in U.S. v. Wise and the MAI Trio, the protections afforded to purchasers of copyrighted property are in a state of confusion.2 By analyzing the Court of Appeals’ recent decision in Vernor, this Note will show that the Court of Appeals’ attempt to combine the standards of Wise and the MAI Trio did not accord with prior precedent and caused two problems in this area of the law. First, a change of this type disrupts the ability of businesses and consumers to adjust their practices in response to the law. Without clear explanations as to how and why the law has changed, manufacturers and consumers are left stumbling in the dark. Second, this move by the court only serves to further distance the balancing tests from the subjective experience of consumers and as a result may not adequately preserve the consumer protections inherent in the first sale doctrine. Only by capturing the consumer perspective can the law reflect the bargain struck at the time of purchase. By ignoring this bargain, the law would allow hidden legal jargon to rob consumers of the value of their purchases. This Note will explore the Ninth Circuit’s approach to the first sale doctrine and the case law concerning the dividing line between licenses and sales. Section I will discuss the background of the Vernor case. Section II will discuss the core of the first sale doctrine, the precedent relied upon in Vernor and the debate concerning the definition of an “owner.” The discussion of ownership will address whether a consumer is protected by the first sale doctrine through an outright sale, or if the purchaser is merely a licensee who is unable to resell the copyrighted item without permission from the copyright holder. Sections III and IV will compare the conclusions of the Vernor District Court opinion and the Vernor Court of Appeals opinion to assess their differing interpretations of the case law. Lastly, Section V will address the first sale doctrine’s consumer protection rationale, the lack of legal guidance given to manufacturers and consumers, and the glaring absence of the consumer perspective from the Court of Appeals’ test.