New Year, New Look
The year is drawing to a close, but before we say goodbye to 2010, we here at Evergreen Events and the LOGIN Conference want to announce and preview our “new look” newsletter and welcome aboard a new editorial staff.
LOGIN 2011 Dates and Location Announced
As you begin making your plans for 2011, make sure to reserve space on your calendars for LOGIN 2011, being held May 16-18, 2011. For the fifth annual conference, we’ve chosen a new site for the event: the beautiful Meydenbauer Center in vibrant downtown Bellevue, Wash.
The LOGIN Conference is an annual game industry event created specifically for the leading voices and minds in the online game industry around the world, brought together in an intimate setting that maximizes networking and superior presentation content. The online game industry is evolving to include massively multiplayer games, virtual worlds and social games across consoles, PCs, browsers and mobile platforms, and LOGIN captures these industrywide changes in its multiple thread presentation format, with all tracks open to all attendees. The 2011 LOGIN Conference will feature a networking expo area, conference party, welcome reception, speed networking breakfasts and keynote lunches, among many other activities, including our first-ever LOGIN Charity Event.
LOGIN 2011 Call for Speakers
Stay tuned for the LOGIN Call for Speakers, which will open Dec. 1. We’re looking to expand even further the breadth and depth of speakers from all facets of the online game business, and we’re always open to new suggestions for topic, panels and formats. The true success of LOGIN is in the hands of the great creative minds that drive this industry, and we’re positive LOGIN 2011 will showcase the latest innovations.
Welcome Aboard, LOGIN Newsletter Editorial Staff
Colette Christiansen joins us as LOGIN director of Charity Events and LOGIN Beat co-editor, with Sarah Woody as editor. Colette attended her first LOGIN Conference last year and served as one of our volunteers and captured many of the great photos you’ve seen of last year’s conference. Colette brings years of experience to the newsletter and as charity director from her background in behavioral sciences and organizational and social management and from positions in government and private industry as a lead grant/proposal writer for a number of technology companies, including entrepreneurial space companies. You think breaking into the cyberspace business is tough, try working with real rocket scientists!
“I couldn’t imagine not being part of such a wonderful group!” Colette said. “Within the first few breaths of last year’s conference, I knew I wanted to be more involved. The commitment of LOGIN and the electric experience one walks away with cannot be matched. LOGIN is not only a remarkable and conversant conference; you’ll feel like they are family.”
Sarah Woody joins us as executive assistant to Evergreen Events and as editor of LOGIN Beat. Sarah did an outstanding job wearing the captain’s hat for volunteers at last year’s LOGIN. Sarah brings years of experience to the newsletter and as newly appointed executive assistant from her background in journalism, as well as her experiences as managing and copy editing in print and online publications, her project management skills and her keen eye for detail.
“This will be my third year at LOGIN,” Sarah said. “Working with Evergreen Events and networking with everyone at the conference have been great experiences for me, and I hope to continue doing so in the future. I can’t wait for another year of LOGIN.”
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Colette Christiansen Director of Charity Events and LOGIN Beat Co-Editor LOGIN Conference |
'Come out of That GameStop Store With Your Hands Up!'
Is This Life After Vernor v. Autodesk?
The used software market was dealt a critical blow on September 10, 2010, with the release of the Ninth Circuit Court of Appeals decision in Vernor v. Autodesk. In reversing the lower court ruling that an eBay vendor could sell used copies of AutoCAD under the Copyright law's First Sale doctrine, the court concluded that the original buyers of the AutoCAD software were licensees, not owners of the copies. If this case stands, and software publishers follow the court's guidance, the market for used software could quickly dry up and sellers of used software could face the types of lawsuits peer-to-peer music swappers face from the Recording Industry of America (RIA).
We begin, to paraphrase Dragnet's Joe Friday, with "just the facts, ma'am." Timothy Vernor (we'll call him "Vernor the Vendor" because it has a nice ring to it), was your typical eBay purveyor of goods. Buy stuff from one source, sell it on eBay. Part of his listings included used software that he would acquire and then resell. It is undisputed that he bought four copies of AutoCAD 14 at an office sale from an architecture firm. These were in shrink-wrapped boxes with the license key numbers written on the outside. When he put them up for sale on eBay, Autodesk, the software's publisher, executed a DMCA take-down notice claiming copyright infringement. eBay took down the listings, after which Vernor the Vendor executed a counter-take down notice claiming that they were legit copies. After this happened enough times, and eBay threatened to shut down Vernor the Vendor's account, Vernor sued Autodesk.
The District Court in the state of Washington sided with Vernor the Vendor, finding that the First Sale doctrine applied. The First Sale doctrine states that once a copy of a copyrighted work is sold, the owner of the copyright can't prohibit the further sale of that copy (and that physical copy only; it is clear copyright infringement to make another copy and sell that while retaining the original copy). The District Court further concluded that buyers of Vernor the Vendor's wares were protected from a copyright infringement claim from Autodesk under the Essential Step doctrine, which states that it is not a copyright infringement to install a legitimate copy of software onto a machine.
The Ninth Circuit disagreed and overturned the decision. They concluded that the architectural firm never owned those four copies of AutoCAD 14 at all. Instead, they were merely licensees of the software, which came with a Software Licensing Agreement (SLA), specifying that the software was licensed and restricted the use or further sale of the software. Since the four copies were not sold, the First Sale doctrine didn't apply to Vernor the Vendor, and since the copies were not legitimately sold, end users weren't protected by the Essential Step doctrine.
In reaching this conclusion, the Ninth Circuit did what most users never do, the Court actually dug into the SLA (readers are probably more accustomed these days to End User License Agreements or EULAs), to see whether it looked more like a license or an outright sale of the copy of software. They found that the SLA specified that it was a license, made clear that Autodesk retained title in the software, and imposed significant transfer restrictions on the software:
"[The SLA] stated that the license is nontransferable, the software could not be transferred or leased without Autodesk's written consent, and the software could not be transferred outside the Western Hemisphere. The SLA also imposed use restrictions against the use of the software outside the Western Hemisphere and against modifying, translating, or reverse-engineering the software, removing any proprietary marks from the software or documentation, or defeating any copy protection device. Furthermore, the SLA provided for termination of the license upon the licensee's unauthorized copying or failure to comply with other license restrictions. Thus, because Autodesk reserved title to Release 14 copies and imposed significant transfer and use restrictions, we conclude that its customers are licensees of their copies of Release 14 rather than owners."
The Ninth Circuit Court put forth the following test to determine whether software has been licensed or sold: "We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user's ability to transfer the software; and (3) imposes notable use restrictions." So there you have it. If the software you "bought" at the store or downloaded online comes with a software license meeting those requirements, you don't own a thing other than a license to use the software limited by whatever the publisher puts into the license agreement.
What will be the long term impact of this case?
First, it's not over yet. The Ninth Circuit is only one of 13 Federal courts of appeal. While the Ninth Circuit (West Coast) is considered one of the most influential circuits, technically its decisions apply only within its jurisdiction. Other circuits are free to either adopt or reject the reasoning of the case, and if rejected, this becomes what is known as a "split in the circuits" making the subsequent case(s) ripe for appeal to the Supreme Court.
Second, since this case deals with Federal copyright law, Vernor the Vendor can file a writ of certiorari (a non-automatic appeal), and the Supreme Court could grant it and hear the case. Given the magnitude of this case, my guess is that the Supreme Court will hear the case. The profound impact on the market for used copyrighted works (including books, music and movies), makes this case too important not to have the Supreme Court weigh in on.
Third, interestingly, the case itself is not over. The Court remanded it to the District Court to hear arguments on Vernor the Vendor's claim that Autodesk is guilty of "copyright misuse," an equitable defense that might get him off the hook. Even if he wins that argument, and copyright misuse is very difficult to prove, it is unclear whether that would also insulate Vernor the Vendor's buyers.
Fourth, the Ninth Circuit practically invited Congress to rewrite the Copyright Act to protect future Vernor the Vendors. "Congress is free, of course, to modify the First Sale doctrine and the Essential Step defense if it deems these or other policy considerations to require a different approach."
Fifth, software lawyers like myself, will be pouring over the SLA's and EULA's we've written for clients over the years to conform them as closely as possible to the three-prong test set forth by the Ninth Circuit. Don't be surprised if you log into your favorite online MMO only to find a notice that a new EULA is now available and in order to continue playing the game, you must click the "I ACCEPT" button. In doing so, you'll be agreeing that, all along, you never owned the copy of the software you loaded up to play the game.
Sixth, as to existing software that is on the street (or inside your local GameStop store as used software), a lot of people are going to have to spend a lot of time trying to figure out whether those games were sold or licensed.
Finally, I predict that future courts are going to become highly skeptical of software sales that pretend to be licenses. The recent trend in software cases has been for judges to conclude that EULA's are valid and enforceable, even though they are free to reject them as "contracts of adhesion," if patently unfair or contain unconscionable terms. I could easily see judges ruling that a EULA which purports to be a limited license, is unconscionable and unenforceable, rather than sticking a reseller of the software (or even worse, the innocent purchaser of used software) with copyright infringement.
So, caveat emptor (buyer beware) and exigo emptor (seller beware). Everyone grab a double espresso and start wading through all the 6-point font EULA's you've got sitting around to see whether you actually own all those shelves of software you've accumulated. But be careful, you may not emerge from your basement until Fall has faded and the first snows of Winter are accumulating on your doorstep.
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James E. Dunstan Mobius Legal Group |
