The decision by the 9th U.S. Circuit Court of Appeal, if it stands, means software makers can prohibit the resale of their wares by inserting clauses in their sales agreements, which many do.

“If that’s right, then not only don’t you own the software you buy, but any copyright owner can simply recite the magic words and effectively outlaw libraries, used bookstores, and DVD rentals, among other things,” the Electronic Frontier Foundation, wrote in a February blog post while awaiting the court’s decision.

Such an outcome was not lost on the San Francisco-based appeals court, saying Congress is free to modify copyright law “if it deems these or other policy considerations to require a different approach.”

The case concerns Autodesk’s AutoCAD Release 14, which was for sale on eBay. Autodesk, invoking the Digital Millennium Copyright Act, demanded eBay remove the item from the site, and it promptly did in 2007.

Timothy Vernor, the seller, who purchased at least four copies of the software from a company that was required to dispose of the software under a licensing agreement, re-posted the sale and his eBay account was terminated after Autodesk complained. Litigation ensued.

The first-sale doctrine of 1909, in its current form, allows the “owner of a particular copy” of a copyrighted work top sell or dispose of his copy without the copyright owner’s authorization. “The first sale doctrine does not apply to a person who possesses a copy of the copyrighted work without owning it, such as a licensee,” the court noted.

Authors: David Kravets

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