# Is it legal to resell software you have bought?



## nxnw (Dec 22, 2002)

There is a discussion in another thread related to this question. A key issue relates to the fact that the end user licence agreement in the particular software states that the purchaser is not allowed to resell. There are a number of reasons such a restriction is not and should not (in my view) be enforceable. There have, in fact, been restrictions in some EULAs that have been successfully attacked and others are currenltly being challenged in the courts.

I am not aware that the restriction on against reselling software has been tested in a Canadian or US courts. I thought it would be intersting to canvass a few of these to see where some of our dearest vendors have in their EULAs:

Office mac 2004 allows transfer, but only once:


> 11. SOFTWARE TRANSFER...Transfer to Third Party.
> If You are the person who initially licensed the Software Product, You may make a one-time permanent transfer of this EULA, Software Product and Certificate of Authenticity (if applicable) to another end user, provided that You do not
> retain any copies of the Software Product. This transfer must include all of the Software Product (including all component parts, the media and printed materials, any upgrades, this EULA, and, if applicable, the Certificate of
> Authenticity)...


Dantz Retrospect allows transfer:


> 8. Assignment... You may transfer the Software, the Documentation, the License Code, and all rights under this Agreement to a third party only if such third party agrees to accept the terms and conditions of this Agreement.


Quicken deluxe 2000 allows transfer:


> You may transfer your rights in the Software to a third party, or sell the computer on which the Software is installed to a third party, provided you do not keep a copy of the Software for yourself.


 MacSpeech iListen EULA does not allow transfer:


> Transfer Prohibited Recipient may not rent, lease, sell or otherwise transfer the SOFTWARE, whether on the media, if any, or otherwise, nor any copies of the SOFTWARE, or any of the accompanying documentation.


 OS X can be sold once:


> 3. Transfer... You may, however, make a one-time permanent transfer of all of your license rights to the Apple Software (in its original form as provided by Apple) to another party, provided that: (a) the transfer must include all of the Apple Software, including all its component parts, original media, printed materials and this License; (b) you do not retain any copies of the Apple Software, full or partial, including copies stored on a computer or other storage device; and (c) the party receiving the Apple Software reads and agrees to accept the terms and conditions of this License.


 Photoshop allows transfer:


> ... You may, however, transfer all your rights to Use the Software to another person or legal entity provided that: (a) you also transfer (i) this Agreement, (ii) the serial number(s), Software and all other software or hardware bundled, packaged or pre-installed with the Software, including all copies, Updates and prior versions, and (iii) all copies of font software converted into other formats, to such person or entity; (b) you retain no copies, including backups and copies stored on a computer; and (c) the receiving party accepts the terms and conditions of this Agreement and any other terms and conditions upon which you legally purchased a license to the Software.


I tried to find a EULA for Toast online (and also in my manual) without success.

OK, as it turns out, the only one I have found so far that purports to tell you that you can't resell is MacSpeech, which happens to be the company I have a beef with. I have looked for others, and I have excerpted from every EULA I have found so far. I welcome MacSpeech or anyone else to add to my list.


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## guytoronto (Jun 25, 2005)

beef • n. pl. beeves (bvz) or beef
A full-grown steer, bull, ox, or cow, especially one intended for use as meat.
Slang. A complaint.

toast • v. toast·ed, toast·ing, toasts 
To heat and brown (bread, for example) by placing in a toaster or an oven or close to a fire.

mmm....this thread is making me hungry...


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## thejst (Feb 1, 2005)

It seems, and is surprising for a bigshot barrister, that you didn't do your research!


BTW you are looking for precedents that fly in the face of contracts (namely the EULA)
Contracts are King- Even Lionel Hutz knows that they are "unbreakable!...unbreakable!


or did you miss that episode?


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## guytoronto (Jun 25, 2005)

"Unbreakable!"


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## thejst (Feb 1, 2005)

lol


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## Gerbill (Jul 1, 2003)

nxnw said:


> Office mac 2004 allows transfer, but only once:


This is why I didn't bother to register my copy with M$ - I can sell it where and when I like, without any hassles.


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## CanadaRAM (Jul 24, 2005)

Gerbill said:


> This is why I didn't bother to register my copy with M$ - I can sell it where and when I like, without any hassles.


You are bound by the same contract - not registering doesn't change that one bit, it just makes it harder to catch, and hastens the day when all software will have to be "activated" like XP and Office Win.


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## Chealion (Jan 16, 2001)

guytoronto - Is it necessary to troll nxnw's posts?


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## Gerbill (Jul 1, 2003)

CanadaRAM said:


> You are bound by the same contract - not registering doesn't change that one bit, it just makes it harder to catch, and hastens the day when all software will have to be "activated" like XP and Office Win.


There's no law requiring me to register the software. I fail to see how buying the software (legally), not bothering to register it, and subsequently selling it to someone else who can suit himself about registering or not, is any skin off Microsoft's nose or hastens the day of any dreaded consequences. "Harder to catch" is offensive - it suggests that the above is improper or illegal, which it is not!


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## CanadaRAM (Jul 24, 2005)

Gerbill said:


> There's no law requiring me to register the software. I fail to see how buying the software (legally), not bothering to register it, and subsequently selling it to someone else who can suit himself about registering or not, is any skin off Microsoft's nose or hastens the day of any dreaded consequences. "Harder to catch" is offensive - it suggests that the above is improper or illegal, which it is not!


You don't buy software: You buy a license to use the software under the particular terms of your license agreement.

There are many instances where reselling software is forbidden by the terms of the user agreement (either the shrinkwrap one or the one you OK'd past onscreen when you installed the software. Examples would be educational-version software (like Office Student and Teacher), site licensed software, Not for Resale demo versions.
In most of those cases, the software is reduced in price precisely because you (the purchaser) have 'bargained' away some priviledges like right of resale, upgrades or free support.


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## ehMax (Feb 17, 2000)

This thread was back from July, 2005.


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## darkscot (Nov 13, 2003)

nxnw said:


> If You are the person who initially licensed the Software Product, You may make a one-time permanent transfer of this EULA


I fail to understand how the initial user can sell the software more than once anyways. The EULAs generally state that the purchaser can ony resell it once. What about the next guy he sells it to?


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## HowEver (Jan 11, 2005)

ehMax said:


> This thread was back from July, 2005.


It's "_Similar Thread_ Syndrome."

It's catching.


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## gordguide (Jan 13, 2001)

" ... You are bound by the same contract - not registering doesn't change that one bit, it just makes it harder to catch, and hastens the day when all software will have to be "activated" like XP and Office Win. ..."

Click-Thru contracts are so full of holes, legally, that no software vendor even wants to have them tested in court, for fear the whole thing is thrown out forever. The idea contradicts the very basics of contract law, and then goes further.

Adobe did try to test one aspect of the click-thru license in California (often cited as the jurisdiction of record, although again, one party insisting on the jurisdiction without regard to the facts of the transaction is pure science fiction and pure legal fiction).

In any case, what was happening is people were buying Adobe Suites, and selling the individual CDs, each with one full application and documentation, on eBay. It doesn't take a genius to figure out that 5 $800 apps will sell for more than one $1500 suite, and business was quite tidy for a while, till Adobe's lawyers came a'calling.

Adobe claimed the license prevented the purchaser from breaking it up and also they claimed the terms prevented resale of any kind without their express permission. Adobe lost on all counts, including all appeals, and it caused a bit of a stir for a while, before software vendors decided that to keep talking about it just encouraged people to obey the law and not the license, which was unenforceable. The fact is you can do anything you want with anything you buy, and that's an old principle of common law. So, you don't hear anything more about it.

Even more recently Microsoft attempted to prevent a business in the UK from selling used software, including thousands of copies of Office and XP, from a bankrupcty of a huge coorporation. Guess who the courts sided with.

The fact is a license that cannot be read or modified, attached inside a shrinkwrappped product that is non-refundable when opened is silly. Çontracts, even the "invisible" ones inside your next box of software, have to be reasonable and enforceable, whether the vendor likes it or not. And a click is not consent. At a minimum, you need to put an X somewhere, in ink by your own hand; even if that only happens once, when you agree to the click as a legal equivalent to a signature. Remember doing that at the lawyer's one day? I didn't think so.

The law in Canada expressly gives you the right to make a backup copy of any software product, for example. Any provision in any license that says you cannot is automatically null and void, as is every provision that is illegal under the law of the land where the software is sold and used. That doesn't prevent them from putting thousands of unenforceable clauses in there; but it does prevent them from being legally binding.

In other words, just 'cuz they say you can't, doesn't mean you can't, and just 'cuz the software company doesn't like what you do, doesn't mean they can stop you from doing it; even they have to obey the law and the law says you can sell any software you own.

Why do you think Microsoft wants to get businesses to rent software instead of buying it outright? Because a rental contract gets signed by someone, and it has an end date (and usually unlimited free upgrades and support during the relevant period). Not so with software you purchase. The items of value are yours to do with as you please, provided you obey copyright law which expressly allows resale of the original disks and documentation, provided you destroy any other copies you may have made (backup, on the HD when you install, etc).

There is a copyright on software (always has been) and that's the essence of what they use to insure you don't pirate (ie you must transfer the originals and delete any copies, due to copyright laws, not software licenses). Anyone remember people being arrested for violating a license? Didn't think so with that one either. They already have all the protection the law allows with copyright law, and they don't get any more, license or no license.

Aside from that, no one's gone to court because everyone's lawyers know the truth; the licenses are bogus and a judge will say so if you make him answer the question by suing someone.

Software vendors are doing the waiting game; the DMCA prevents defeating of encryption, DVDs can deliver large suites on one disk, online vendors make the user name part of the unlock code (like Graphic Converter), or by insisting the upgrade price is only eligible to a registered user (ie like Adobe), etc. As far as the specific application goes, they can't prevent anyone from reselling, buying or using it.

No-one's going to court over the EULA, because the vendor would lose, exposing the whole charade for what it is; smoke and mirrors.


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## darkscot (Nov 13, 2003)

good read, thanks gordguide!


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## JPL (Jan 21, 2005)

Yes, well summed up, what you say about common law rings true, that being the basis of our law, I hereby declare that all click licenses are hereby null and void!:yawn: 

That brings me to ask the question shouldn't copyright laws be brought into the 21st century? How is it that copyright seemingly goes on forever? I know this varies from country to country. People who invent physical gizmo's take out a patent and have about 20 years to make hay, not unreasonable IMHO, but copyright goes on forever"ish". Same sort of intellectual creation I think however they are not treated equally somehow.


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## nxnw (Dec 22, 2002)

JPL said:


> ...People who invent physical gizmo's take out a patent and have about 20 years to make hay, not unreasonable IMHO, but copyright goes on forever"ish". Same sort of intellectual creation I think however they are not treated equally somehow.


The US recently made a farce of copyright law by extending the term retroactively. It was, literally, Mickey Mouse legislation: Mickey was about to become public domain and Disney lobbied for this change.

If there was a public policy reason to extend the term, there was certainly none to do so retroactively. The public policy behind IP rights is to encourage innovation and creativity by enabling the creator's to profit from his work. The reason for these rights to be limited is to enable others to use the work and build on it.

It just goes to show who decides public policy in the US.


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## MacDoc (Nov 3, 2001)

Excellent post GG - question- could Adobe legally refuse support or upgrade???


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## nxnw (Dec 22, 2002)

MacDoc said:


> Excellent post GG - question- could Adobe legally refuse support or upgrade???


Speaking as a lawyer, "legally" has nothing to do with it. The simple answer is that if they wanted to to this, they would. It is not practicable for an end user to spend tens of thousands of dollars to take Adobe to court over an issue worth a few hundred.

Now, if we are in the US, and we are talking about an issue affecting many thousands of people, a lawyer might be persuaded to bring a class action. I am aware of a proceeding, in California I think, dealing with returning opened shrink wrapped software (the licence said you can't, even though the licence was not available for examination until you opened the package). That was settled and is the reason many publisher now post their licences online and have also made their return policies more liberal.


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## MacDoc (Nov 3, 2001)

I understand that it is a "choice" with some risk associated.

In the case of support or upgrade denial if challenged they would likely lose as the law stands or entirely up to the judge's mood and skill of the parties presenting the case.??


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## CanadaRAM (Jul 24, 2005)

The position, if I understand it correctly then, is that the buyer can knowingly purchase a regularly $400 software package as a $150 version that comes with well-defined restricted rights (according to the manufacturer) , and then tear up the EULA, say "you can't/won't enforce it anyway" and go ahead and sell the software in direct opposition to the restrictions that were known before purchase.

I am basically opposed to this approach; it supposes there is nothing wrong with striking a bargain, and then going back on it later, knowing (or gambling) that the other party doesn't have the means to enforce the original bargain.


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## Oakbridge (Mar 8, 2005)

Most of the arguments saying 'we can do what we want' are missing a big point. We don't 'own' software, we own a license to use software. 

I have to also comment that some of the opinions voiced in this thread bother me. Why is it that so many people will purchase something, knowing that they don't agree with the terms and conditions presented by the vendor/developer? If you don't agree with what their terms and conditions are, just don't buy/use their product. Don't start with the "they can just take me to court" or "there is a case before a court that strikes this down so blah blah blah". 

Why would you spend money on something when you don't agree with the conditions to use it? Every time a lawyer gets involved, it costs money and who do you think ends up paying for those legal bills in the long run? We do.


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## since84 (Jan 9, 2002)

*on The Hour*

I don't know how many of you watch The Hour on CBC Newsworld (you all should - it's great!) but yesterday George Stomboulopolous (sp?) did an interview about U.S. class actions suits against Sony's 'secret' software copying defence, but it goes directly with this thread.
Check this out:
http://www.mtv.com/news/articles/1519871/20060106/index.jhtml?headlines=true


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## guytoronto (Jun 25, 2005)

I don't get it.

I thought everybody pirates software anyway?


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## elmer (Dec 19, 2002)

Oakbridge said:


> If you don't agree with what their terms and conditions are, just don't buy/use their product. Don't start with the "they can just take me to court" or "there is a case before a court that strikes this down so blah blah blah".


I don't see why I shouldn't "start with the "they can just take me to court."" If every company out there had ridiculous terms, we would all buy the software and disregard the terms, just as everyone drives 20km over the speed limit in certain areas. The risk of penalty is insignificant compared to the cumulative reward of daily disobedience. Since the EULA is non-negotiable the choice is simple - obey it or chance the consequences. But it's not a question of ethics. If the package says "by opening this package you are agreeing", one can simply say, "no, I'm not!", and one is keeping one's word. The statement is as ridiculous as a letter to a parolee that says, "by stepping out of jail, you are agreeing to abide by the laws of this country."
All I'm trying to say is, they might as well just put a label on it that says, "we'd appreciate it if you'd do these things...". I generally abide by EULA terms, but not because I think it's a contract; I do it because I respect the authors.


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## gordguide (Jan 13, 2001)

" ... We don't 'own' software, we own a license to use software. ..."

Maybe, or maybe not. The courts might decide for you, if you asked them. However, that's not the question here.

The parent post asks whether you can sell it or not, and I guarantee you without any doubt whatsoever the law says you can and that any restriction in the EULA, even if the EULA is found to be otherwise completely binding, that the confilicting clause is null and void if it restricts you common-law right to sell the software. And that's precisely the issue Adobe lost in the courts in California.

Just writing something down tends to create validation in people's minds, but don't assume that anything is binding on you. Half the clauses in the member agreements we sign in ink at the video store wouldn't stand up in court (assuming you believe BlockBuster Canada's legal counsel, where that statement comes from), let alone an EULA you don't sign and can't read before you try to use the product.

I'm not advocating widespread abuse of an EULA; we all know the difference between right and wrong. But, don't expect me to roll over just because of a few words on a screen; by itself the act of writing an EULA with the click-through acceptance doesn't make it binding or enforceable.

If the EULA is so enforceable, why do we charge people with piracy (essentially, commercial counterfeiting) instead of under tort (contract) law? Why do we need laws that prohibit defeating encryption if ignoring an EULA, which most certainly has very strong worded clauses that often include "voluntary" penalties, is binding? I'll give you a clue: does your application's EULA prevent you from clicking through if you're under 18?

MacDoc asks: "... could Adobe legally refuse support or upgrade??? ..."

Well, I don't think I'm qulified to answer. I've bought old applications and used them for upgrades, no problem. FileMaker even had to issue me a special serial number soley to get the FM6 upgrade to run, since I couldn't install FileMakerPro 2 from floppies on my QuickSilver, but they did so happily over the phone (my second call to them; the first is when they confirmed a used, opened, second hand copy of FM2 I bought for $ 40 was perfectly eligible for an upgrade).

I also used a shrikwrapped, never installed copy of PhotoShop5 ($ 50) as the basis for buying PS-CS retail box-upgrade version; all it asked was the PS5 S/N and away it went. Adobe happily accepted my registration for both copies, and again after confirming any previously unregistered full version copy of PS was fine, as are used copies where the original owner bothered to download and fill out the license transfer agreement.

Adobe SW runs fine whether you register it with them or not; the only benifit is beign able to retrieve your S/N from them which is handy from time to time. Apple, VueScan, etc all offer that handy feature if you bother to register in the first place; but many vendors can't even be troubled to do that. To many, registration offers no benifit at all to the user, except maybe more junk mail (Intuit, anyone?) which brings up a rather obvious "why bother".

In my experience most software developers encourage license transfers, so I'm not sure where MacSpeech is coming from, but I'll bet it's dark up there.


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## Oakbridge (Mar 8, 2005)

Does anyone else wonder if all of the challenges to the EULA cost us money in the long run? It costs money for a developer to hire lawyers to review their EULA's. The more challenges, the more lawyers involved, the more costs involved that are eventually passed along to those who purchase the software.

I go back to what I said in my earlier post. Don't purchase something if you don't agree with the terms and conditions of the purchase.


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## gordguide (Jan 13, 2001)

" ... It costs money for a developer to hire lawyers to review their EULA's. The more challenges, the more lawyers involved, the more costs involved that are eventually passed along to those who purchase the software. ..."

Have you read many? ** Aside from large companies who may as well give the lawyers <i>something</i> to do every once in a while, most EULA's either are boilerplate or else are so rediculous it's obvious no lawyer has been within a hundred feet of it when it was written.

And I don't know about challenges. I know of very few anywhere and I've never heard of one in Canada. Let's face it, <i>no-one</i>, including most sofware vendors themseslves, takes EULA's seriously because there's nothing to take seriously in them. 99% of what's enforceable exists in law whether there is an EULA or not; the rest can be discarded as wishful thinking, or more relistically, a simple statement of company policy.

Company Policy is just that, and is also perfectly fine provided consumers can read it somewhere (including a sign on the wall) and provided it's not conflicting with the law, which it frequently does. [I think, in a roundabout way, that also references the Doc's question about upgrade policy].

** For example, McAffee prohibits reviews of it's software without permission, including communicating in print or verbally anything whatsoever about the software, the title, it's performance, even the installation procedure, in it's EULA. They tried to sue the State of New York because a recommendation of software practice for the State Government included an asssement of a McAfee product. (Once again, we can guess who won; nothing new here. Note that the EULA specifically commanded anyone who intended to review the software to cease and click "I disagree" at the point of installation). They're hardly the worst or the most rediculous.

I think a proper resolution of the thread might be best done by everyone quoting their favorite EULA clauses. Ought to be good for a laugh.

To paraphrase Hunter Thompson:
I hate to advocate good judgement, obeying the copyright laws, wearing a "Sue Me" T-shirt and forgetting about the rest; but it's worked for me.


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## CanadaRAM (Jul 24, 2005)

gordguide said:


> Well, I don't think I'm qulified to answer. I've bought old applications and used them for upgrades, no problem. FileMaker even had to issue me a special serial number soley to get the FM6 upgrade to run, since I couldn't install FileMakerPro 2 from floppies on my QuickSilver, but they did so happily over the phone (my second call to them; the first is when they confirmed a used, opened, second hand copy of FM2 I bought for $ 40 was perfectly eligible for an upgrade).
> 
> I also used a shrikwrapped, never installed copy of PhotoShop5 ($ 50) as the basis for buying PS-CS retail box-upgrade version; all it asked was the PS5 S/N and away it went. Adobe happily accepted my registration for both copies, and again after confirming any previously unregistered full version copy of PS was fine, as are used copies where the original owner bothered to download and fill out the license transfer agreement.
> ...
> In my experience most software developers encourage license transfers, so I'm not sure where MacSpeech is coming from, but I'll bet it's dark up there.


You examples prove my point, though. Nobody is saying you can't sell software period. The debate is whether software that is discounted from full retail BECAUSE it comes with restricted rights of resale, can be sold in opposition to the agreement made whsn it was bought at a discount.

If those apps of yours were full retail versions, and not used by the former oweners to upgrade, and had been sold to you with transfer of license, then that's exactly how it should work.

If they were OEM, Educational, NFR, or site license software, then you wouldn't have been able to upgrade.

IME, most companies use different serial numbers for restricted rights software and those serials are automatically excluded from upgrading.


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## elmer (Dec 19, 2002)

CanadaRAM said:


> The debate is whether software that is discounted from full retail BECAUSE it comes with restricted rights of resale, can be sold in opposition to the agreement made whsn it was bought at a discount.


The deal is not usually advertised as such ... "Buy Office with no resale rights for 50% off!".

No, it's "Buy Office with a Mac for 50% off!"

Weird. I could take the deal and sell the Mac to my friend. But my friend could not take the deal and sell me Office with the same final result.

How come we always get to own the hardware, but not the software?

How come there's no EULA for the firmware? 
What makes the firmware so special, or the programming of the FPGAs?

Are you comfortable with the idea of all your appliances being owned by the companies that made them?:yikes: I'm not. And I also don't like being bombarded by all these long legal statements everywhere and being expected to agree to and abide by them without legal consultation. Smacks of the kind of scum Erin Brockovich was fighting against, minus the threat to health. Personally I only read them scanning for statements such as I once saw on a Creative Soundblaster driver, similar to the Sony rootkit stuff.​


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## Oakbridge (Mar 8, 2005)

gordguide said:


> " ... It costs money for a developer to hire lawyers to review their EULA's. The more challenges, the more lawyers involved, the more costs involved that are eventually passed along to those who purchase the software. ..."
> 
> Have you read many? ** Aside from large companies who may as well give the lawyers <i>something</i> to do every once in a while, most EULA's either are boilerplate or else are so rediculous it's obvious no lawyer has been within a hundred feet of it when it was written.


Have you ever worked for a software developer? I have worked for a number of them, most of them were less than 100 employees. Almost every one that I have worked for has ALWAYS given their lawyer a copy of their EULA before it goes out to the public. And whenever there is a change in the application, or if there is a question if 'this is covered' or 'that is covered' a call is placed to the lawyer to ask for their opinion. 

I've been Product Manager for a software developer and every agreement, license, contract, etc. went to the lawyer for their approval. I'm currently doing contract work for a software developer and their lawyer's receive copies of all of their license agreements for their final approval.

So yes, every challenge DOES cost legal fees for most companies, who of course pass those costs along to their customers.


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## gordguide (Jan 13, 2001)

Well, Steve, a little hyperbole here and there never hurt. I thought you would have caught on with the "hundred feet" line. Certainly any lawyer can craft a clause that hasn't any hope of being upheld, though. In fact, they are paid to do exactly that. How about these clauses:

BitKeeper, a revision-control application (used by software developers, mostly)
You are prohibited from using the software if you or your employer produce, sell, or resell any product that tracks revisions or operates in a similar manner; or in the sole opinion of BitKeeper, competes in any way with the software.

DirectRevenue, a stealth install adware application, says in the EULA that you cannot sue them for anything, but instead agree to arbitration on any matter. This, mind you, even though as a stealth install, users never see the EULA. The application meets what some are proposing as a legal definition of spyware.

Attorney Eric Goldman, is a professor of Law at Marquette University, specializing in Cyberlaw, Intellectual Property, Copyrights, Contracts, Software Licensing and Professional Responsibility. He is a former General Counsel for Epinions.com and an attorney for Cooley Godward LLP, a Silicon Valley firm specializing in the same areas as his teaching disciplines. He has taught at UC Berkley, Santa Clara and Uof San Francisco law schools. He is a board member of the Journal of the Copyright Society of the USA, of Business Law Today, and the American Bar Association Business Law Publication Board.

It is his opinion and the opinion of many judgments handed down in the US that any EULA that is not fully disclosed prior to purchase (ie a shrinkwrapped EULA) must include a clause offering a full cash refund to anyone who does not accept the terms; without which it is invalid. Did your company offer refunds on open-box software, or post the EULA on the outside of the box?

It is also his opinion that EULAs suffer from what he calls "a crisis of contract" : that "... a EULA may have all of the legal niceties required to form a contract, but we still don't believe the user's consent to the EULA accurately reflects the user's true preferences. ..." [From a legal opinion on lawsuits brought against SONY for it's rootkit fiasco].

He does hold (and cites precedent in US law) that a click-through license (and only a click-through license) is enforceable; but insists that any clause be tested for validity as well, and that for the most part, many EULAs contain unenforceable clauses.

Your firm and others send them to lawyers for validity on the mundane things (properly worded, etc) but leave the bizzare clauses intact; no lawyer would suggest weakening your position when strengthening it is an option, even if it may later be diluted or disallowed by the courts. In other words, "our lawyers approved it" means they covered their legal asses, not that it's legal itself.

<b>Back on topic</b>, in the US Microsoft vs Zamos case, a student purchased discounted academic versions of Windows XP and Microsoft Office from the Kent State bookstore; decided he didn't want them after opening the boxes and installing, then removing, the software, and put them up for sale on eBay. Microsoft, who monitor eBay closely, contacted David Zamos, asking him if the disks contained the label "not for retail or OEM distribution". He agreed they did, but that he was not doing either of those things. Microsoft sued.

Acting as his own attorney, Zamos countersued alleging (this is good stuff here) :
<b>“ ... Microsoft purposely established and maintained a sales and distribution system whereby rightful rejection and return of merchandise that is substantially non-conforming is either impossible or practically impossible due to the ineptness of its employees, unconscionable policies, malicious intent, and deceptive practices. ..."</b>

Microsoft, seeing victory fall away, tried to drop the case but Zamos refused, demanding an apology and a cash payment. As we've been saying all along in this post, Microsoft agreed to his terms provided the countersuit was dropped. In other words, no software company wants to test this stuff in court, because their lawyers know damn well they will lose, and set a precedent to boot.

Go ahead and resell your software.


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## gordguide (Jan 13, 2001)

Sample Bogus EULA clauses (they violate one law or another):

McAffee AntiVirus for Windows:
"The customer shall not disclose the results of any benchmark test to any third party without Network Associates' prior written approval."

The EULA also includes an "automatic subscription renewal" clause authorizing Network Associates to simply charge to your credit card to renew when your AV subscription runs out.

Microsoft SQL Server, MS XML:
"... you may not without Microsoft's prior written approval disclose to any third party the results of any benchmark test."

VMWare:
" ... "You may not disclose the results of any benchmark test of the Software to any third party without VMware's prior written approval. ..."

Microsoft Windows XP Home Edition, where you agree to allow Microsoft to download and install to your computer:
" ...If the DRM Software's security has been compromised, owners of Secure Content ("Secure Content Owners") may request that Microsoft revoke the DRM Software's right to copy, display and/or play Secure Content. Revocation does not alter the DRM Software's ability to play unprotected content. A list of revoked DRM Software is sent to your computer whenever you download a license for Secure Content from the Internet. You therefore agree that Microsoft may, in conjunction with such license, also download revocation lists onto your computer on behalf of Secure Content Owners."

Pinnacle Studio:
" ... You acknowledge and agree that in order to protect the integrity of certain third party content, Pinnacle and/or its licensors may provide for Software security related updates that will be automatically downloaded and installed on your computer. Such security related updates may impair the Software (and any other software on your computer which specifically depends on the Software) ..."

"Do not reverse engineer this product" clauses are specifically in violation of US copyright law. **
Some examples:
Intel: "You may not reverse engineer, decompile, or disassemble the Software."
Napster: " "[you cannot] modify, alter, decompile, disassemble, reverse engineer or emulate the functionality, reverse compile or otherwise reduce to human readable form, or create derivative works of the Software without the prior written consent of Napster or its licensors, as applicable."

Microsoft does a trick in the XP EULA that both acknowledges the law but still attempts to convince you you can't do it; and it's an illustrative example of an EULA clause that you should watch for, since it's a rather broad clue the clause is illegal:
"LIMITATIONS ON REVERSE ENGINEERING, DECOMPILATION, AND DISASSEMBLY. You may not reverse engineer, decompile, or disassemble the Software, except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation."

** Sega Enterprises, Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992); also Atari Games Corp. v. Nintendo of America, Inc., 975 F.2d 832.


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