Don't Judge a Sale by its License: New Perspectives on Software Transfers Under the First Sale Doctrine in the United States and Europe
University of San Francisco Law Review, Vol. 36, pp. 1-107, 2001
107 Pages Posted: 6 Aug 2009
Date Written: 2001
Section 109(a) of the Copyright Act, known as the First Sale Doctrine, protects the lawful owner of a copy of a copyrighted work from infringing the copyright in that work by reselling the copy. The First Sale Doctrine constitutes a well established principle of United States and European intellectual property law. Nearly every commercial transfer of a copy of software is accompanied by an explicit license agreement which seeks to impose restraints on the use and resale of the software. Thus, the applicability vel non of the First Sale Doctrine affects virtually every software transaction. The consequences of this legal doctrine penetrate the very core of public policy on competition and consumer protection in the software market.
This Article reviews the origins and functions of the First Sale Doctrine as it applies to software and attempts to clarify the circumstances under which a software transfer constitutes a 'first sale.' This Article revisits the concepts of sales and ownership in order to avoid the common misconception that by labeling a transaction a 'license grant,' the final word has been spoken on whether a sale of a software copy has in fact occurred. By eschewing the common judicial dichotomization of a 'license' of software and a 'sale' of software, this Article shows that the form of the license is almost uniformly epiphenomenal. A software transfer must always involve a license in some form. This Article also examines the application of the First Sale Doctrine to software licensing agreements in the European Community.
Keywords: first sale doctrine, license, software
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