Vendors Don't Want You to Sell Used Software

SAN MATEO (04/03/2000) - DO YOU HAVE THE RIGHT to resell a copy of a software program you legally acquired? With a book or a video, the publisher would have no objections, but software publishers have long been reluctant to acknowledge that users have such a right. And now some are actively taking steps to prevent users from exercising it.

A reader who had purchased Caere Pagekeeper Pro 3 decided after installing it that the product did not meet his expectations. Unfortunately for him, he didn't see the 30-day money-back guarantee printed on Pagekeeper's package until it was too late. He therefore decided to remove Pagekeeper from his system and auction it off -- complete with the original CD, manual, and box -- on eBay. But before the auction was complete, he received a notice from eBay that his auction had been cancelled at Caere's request.

"Evidently Caere feels that I'm stuck with it for life and can never resell it," the reader wrote to me shortly after receiving eBay's notice. "They quote a copyright law that if interpreted their way would mean the closing of all used book stores, used CD stores, used software stores, and probably public libraries."

I've talked about cancelled eBay auctions here before, but in each of those cases the software publisher said it had reason to believe the copy being auctioned was pirated. In this situation, however, both eBay and Caere seemed to be telling the reader he was breaking laws even if he had legally acquired the copy of Pagekeeper. When the reader protested the closure of the auction, eBay informed him that "per the Digital Millennium Copyright Act, we are required to remove such auctions" as his when asked to do so by a member of eBay's VERO (VErified Rights Owner) program, which Caere is.

Caere went even further, informing the reader that "According to the U.S.

Copyright Act, it is illegal to distribute copyright material (which includes software) without specific authorization from the copyright owner."

Pagekeeper's shrink-wrap license, like many others, has a provision that prohibits all transfers of any kind. Caere's policy statement (posted on eBay's Web site at members.ebay.com/aboutme/legal@caere.com) states that only authorized Caere resellers can auction off Caere software on eBay.

Now you could find several intellectual property attorneys who would take exception to Caere's interpretation of copyright law. In fact, many would say it flies in the face of some of the law's most basic principles, such as the "fair use" and "first sale" doctrines. Because UCITA (Uniform Computer Information Transactions Act) isn't yet law, a term in a post-sale shrink-wrap license prohibiting transfers isn't likely to carry as much weight as those well-established principles.

And we soon saw evidence that Caere knew its argument wouldn't really hold water. With my encouragement, our reader refused to accept the cancellation of his auction and filed a legal counter-notice form under eBay's appeal process.

Caere backed off, and eBay allowed the reader to relist his copy of Pagekeeper, although not without a warning that Caere still believed he was infringing on its license and that the door was still open to future action.

But although Caere's interpretation of copyright law is dubious, I'm not so sure the same can be said for eBay's interpretation of the Digital Millennium Copyright Act. In fact, eBay's belief that it has no choice but to halt an auction when a copyright holder claims its rights are being infringed upon seems to accurately reflect the law. That worries me.

How many consumers are going to persist as our reader did in the face of two big companies telling them that they're breaking the law? What would have happened if Caere had cared enough not to buckle under in this case? In spite of weakness in its legal position, a determined company with lots of lawyer power would have almost surely prevailed eventually, because our reader would have thrown in the towel long before the case got to court.

If you think about it, it's easy to see how the ultimate effect of the Digital Millennium Copyright Act might be that real judgements in such disputes get made by legal counsels of Web portals and ISPs caught in the middle. Their judgement won't be based on what's right or fair as much as what approach carries the least risk of getting sued.

Sure, one eBay auction is no big deal, and in this case a certain form of justice prevailed. But our reader was right to believe that what Caere was saying threatens everything from used books sales to public libraries. If we don't have the right to resell a copy of a software program, I fear we will lose a lot of other rights as well.

Got a complaint about how a vendor is treating you? Write to Ed Foster, InfoWorld's reader advocate, at gripe@infoworld.com.

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