Could Oracle ruling lead to used e-book, music sales?

Could Oracle ruling lead to used e-book, music sales?

Summary: When the Court of Justice of the European Union ruled that Oracle couldn't block the sale of used software over the Internet, did it open the door to sales of used e-books, digital music, and video?

TOPICS: Legal, E-Commerce, Oracle

Oracle is on a legal losing streak. First, it lost to Google in its attack on Android. And, now the Court of Justice of the European Union (CJEU), the EU's equivalent of the U.S. Supreme Court, has ruled against Oracle in a software copyright case.  Specifcally, the CJEU ruled that "Where the copyright holder makes available to his customer a copy—tangible or intangible—and at the same time concludes, in return [for] payment of a fee, a license agreement granting the customer the right to use that copy for an unlimited period, that rightholder sells the copy to the customer and thus exhausts his exclusive distribution right.” In short, you can and buy sell downloaded used software in the EU... and that suggests that you might be able to resell used  e-books, digital music, and video as well.

As Benoît Keane, a solicitor in England and Wales and a specialist in EU law  put it in a recent blog post, “The rationale of this judgment could have major implications for other digitally available products, such as e-books and music, which are increasingly purchased through internet sites rather than in tangible formats.” The Recording Industry Association of America (RIAA) considers any attempt to resell digital music as willful copyright infringement (PDF Link). We can be certain that the  Motion Picture Association of America (MPAA) would take a similarly dim view at attempts to resell used TV episodes and movies.

Some people also argue that there is no such thing as used software, but that argument doesn't hold much water in the US or the EU.

One law school professor told me  “It's just the doctrine which under US copyright law is called the right of first sale. The European court gets the usual US answer by a slightly different route. The point is that you can resell your licensed copy, that is, stop using it yourself and transfer it to someone else. Like a book. Oracle tried to argue that this would be the rule if you were first sold the software in a physical form: a CD or DVD, but not if it was always just pure bits. That was a silly argument even under European law, and it was predictably rejected.”

But, could, in the EU anyway, people actually get a legal right to sell their “used” e-books or videos as well as their software?

It's up in the air for now. Someone will have to try it, wait for the lawsuit, and then take it from there.

Andrew 'Andy' Updegrove, a founding partner of Gesmer Updegrove, a top technology intellectual property law firm said, “If you think about it, the entire concept of a "license" for software, as compared to a sale, is very unusual to begin with. A modern car, for example, includes far more types, and far more discrete examples, of intellectual property than a piece of software, when you add everything up. And it would be ridiculous for (say) General Motors to try and tell you that you couldn't resell it - or loan it - rent it - or remove parts
from it and install them in another car. So why has software been permitted to be treated so differently?”

Updegrove continued, “Even if you were to say that copyright law should apply to a car, you could still loan it, or rent it, or sell it - you just couldn't 'copy' it. So why do we allow one set of rules to apply in the case of a creative work that is intangible but restrict protection to other expressions of innovation to patent protection, to the extent available?”

So while “copyright law is based upon an original concept that was very clear and concise: you can't make an exact replica of something and sell it without compensating the owner. I think that's still plenty of protection for an author, artist, etc.” Therefore, “I personally think that ebooks (for example) should have no greater protection physical books. And this European court would appear to agree.”

Of course, software companies, publishers, and media companies do have another trick up their sleeves.  Rich Santalesa, senior counsel at Information Law Group commented, “I think all software companies may need to do is not utilize a 'perpetual' license... simply state a 99 years or some other long period that doesn't, depending on the applicable country law, violate the rule of perpetuities or whatever analog exists to stretch this metaphor into the real property transfer arena.  By the time that date rolls around we'll all be dead, the software obsolete, what have you, but for legal purposes there's not been a license for an 'unlimited period.'"

That's a worry for another day. For now, though, in Europe at least,  you can legally sell used software and there's a crack in the door for legal sales of used ebooks, music and video.

Related Stories:

The knock on effect of the EU decision on reselling software

Oracle cannot block the resale of its software in Europe

It's the end of books as you knew them: E-books out-sell hardbound for the 1st time

Topics: Legal, E-Commerce, Oracle

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  • I'm wondering if a lot of software vendors,

    ebook, music, etc, basically anyone selling "digital" data as opposed to "physical"
    formats might decide to put some sort of "use bomb" in the downloaded media.
    For example, you find a book you like, download it...but the vendor decides that
    since they can no longer prevent you from reselling this downloaded book, that
    you get like maybe 3 or 4 "views", then it self-destructs! Sort of like "Mission
    Impossible"...this tape will self-destruct in 10 seconds.
  • Not quite the same ...?

    Unless steps are taken to ensure the software, etc. are actually removed from the original owner's device.

    Then, yes, you should be able to re-sell it.
  • Unwanted baggage

    You can bet that if it comes to that, you'll see maximally invasive DRM being used to insure that illegal copies are not being left behind. I don't imagine the law states anywhere that reselling such thing has to be an easy thing to do.
  • Used

    If you sell a used book it will have wear and tear from being used. A digital copy will be an exact replica and should be sold as new.
    • What difference does that make??

      The same can be said of diamonds.
    • The terminology might be archaic but..

      Chances are, transactions being made in the secondary market are for less than can be found in the primary market. The product might be in every way identical, but there is still some risk involved when dealing with an entity that is not a top-tier vendor.

      One thing I wonder though is how bundled services would work. Amazon, for example, offers free cloud storage for items bought from them. They should not have to incur any transactional costs pertaining to a secondary sale which they are not part of; yet they will at the very least need to ensure the sold product no longer is accessible on the first purchaser's account. Or perhaps they would impose a "license transfer fee" to move the benefit to the new owner? Or maybe this will mean the end of such perks; again gimping technology from realizing its full potential.
  • I wonder if MS are worried?

    What about Enterprise Agreements where you never own the software but are basically buying a licences to use it for a period of time? Or OEM licenses which are supposedly tied to the piece of hardware? I wonder if any of these are affected.