License to Sell: Kirtsaeng v. John Wiley & Sons, Usedsoft v. Oracle, and the Impending Disruption of the International Software Licensing Landscape

Abstract

In March of 2013, the Supreme Court held that the first sale doctrine is applicable to copies of copyrighted material made outside of the United States, so long as those copies are lawfully made in accordance with Title 17 of the United States Code.

In July of 2012, the CJEU held that where a software distributor licenses software to an end-user for an unlimited period, that license is recognized as a sale.

Thus, if consumers who acquire software in the EU are regarded as owners rather than licensees, and the copies those consumers acquire are lawfully made, can those consumers then resell those copies to United States buyers? If so, by what mechanism?

This paper argues that consumers might now use the above-referenced SCOTUS and CJEU holdings, as well as 17 U.S.C. § 117, to effect transfers of software in the secondary market to overcome the licensing fiction software distributors have used for decades to circumvent the first sale doctrine. To curtail growth of an international secondary market for software, software distributors may be wise to shift to a software-as-a-service model.

Keywords: SaaS, Software, Copyright, Licensing, First Sale Doctrine