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(Message started by: Nickspc on Feb 13th, 2006, 12:46pm)

Title: Intellectual Property and First Sale Doctrin
Post by Nickspc on Feb 13th, 2006, 12:46pm
Hi folks,

I am in a bit of a confussing spot.  I sell computers and software, and found that Microsoft states that by selling their software to the public, like the OEM versions, I am in violation of their intellectual property rights.

I cannot find any thing in any article, law, ordinance or other wrintg that would indicate I am in violation.

How this is sold:

I purchase the software, genuine Microsoft software I might add, from a supplier.  I then sell this, to the customer.

The software has never been installed or used before.  This has never been registered before.  This is ligitimate software manufacured by them.

They also inform me that i am in violation of a license agreement.  At the time of purchase, i did not see, read, sign or aknoledge any type of a license or license agreement.

Can anyone here help with the facts.  Can I sell what I buy.  Can i sell Microsoft Software that I buy from another source?


Title: Re: Intellectual Property and First Sale Doctrin
Post by Isaac on Feb 13th, 2006, 1:02pm
What does the license associated with the OEM software say?   It's very common to include provisions in the license of such software preventing sale without the sale of an acompanying computer.

In any event, courts have reached different conclusions about whether or not limits on resale are enforceable.  In fact I could point to different district courts in California reaching opposite conclusions on this issue involving very similar facts.   And even if the sale is allowed, if the license does not allow the end user to use the software, there is possibility of an indirect infringement theory being available.

Title: Re: Intellectual Property and First Sale Doctrin
Post by JimIvey on Feb 13th, 2006, 4:27pm
I think Nick raises an interesting point.  Is the shrink-wrap license applicable to a reseller -- someone who never agrees to the shrink-wrap license by opening it?

Suppose, hypothetically, I go to and buy a PS2 mouse that comes bundled with an OEM version Windows Office Basic for $50.  Then, I sell the unopened Windows Office Basic on eBay, keeping the mouse.  Assume I wanted the mouse only and didn't want or need Windows Office Basic.

Perhaps the shrink wrap itself told me that I could either agree to the license and break the seal or return the product for a refund -- but could not re-sell the software.  How am I supposed to see that license if I never open the box?  To maximize resale value, I leave the shrink-wrap on the box and never even look at the shrink-wrap license on the disk(s) inside the box.  Can someone be bound by a contract they've never seen, let alone never took an affirmative act to signify agreement to be bound by the contract?  I don't think so.

I don't think MSFT is on sound legal footing here.  However, as a practical matter, good luck to anyone who wants to duke it out with them in court over this issue.  Since when has what's right ever prevailed over all the money in the world?


Title: Re: Intellectual Property and First Sale Doctrin
Post by Isaac on Feb 13th, 2006, 6:42pm
I'm familiar with a couple of cases in California federal district courts involving Adobe and a reseller. Adobe won one case and lost the other.

When considering first sale, you have to first establish that the person received copies in a way that exhausts the copyright holder's rights. I suspect that MS would argue that they don't release OEM versions of software in ways that allow it to legitimately end up in the hands of resellers.

If a licensed computer hardware vendor forks the software over to a reseller in violation of a MS license, the reseller might not gain a copy for which first sale applies.

Title: Re: Intellectual Property and First Sale Doctrin
Post by patentpilot on May 30th, 2006, 5:21am
My experience with MS, most of it less-than-pleasant, indicates that they grant a "use license" only.  Intel does some of the same thing.  In fact, when one sells (or gives away to a charitable organization) a computer with such code installed, the purchaser or donee does not receive rights to use the software.  This is a bit of a problem for large corporations when they want to donate their used machines to, for example, the local high school.  They must obtain a "special dispensation" from MS to do so.  I believe MS looks at it much as an auto dealer leasing a car.  You pay a one-time, up-front fee and are free to use the car for as long as you wish, but you don't own the car and you can't sell it.  (I suppose this would be called "freedom of contract".)

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