Selling used bits: German database ruling sets ugly music precedent

In scanning my RSS feed this morning (by the way, I now use the Web version of Newsgator to the exclusion of any thick-client solutions), I came across this little interesting tidbit from InfoWorld:

A higher German court has ruled to uphold a decision by a lower court to ban the sale of used software licenses, in a case involving a subsidiary of Oracle....The Appellate Court of Munich ruled on Thursday that the sale of used software licenses is illegal, upholding a decision reached by the District Court of Munich on Jan. 19, which ruled that the sale of software licenses by Soft infringed upon copyrights held by Oracle International.

Interesting. One of the nasty little side affects of Digital Rights Management technology (aka: CRAP -- Cancellation, Restriction, and Punishment; For more about CRAP, see CRAP, The Movie and CRAP, The Sequel) is the way it interferes with something known as the "first sale doctrine" when it comes to copyrighted material like music. A page on the Electronic Frontier Foundation's (EFF) Web site puts first sale into pretty decent layman's terms:

Another limitation to the copyright owner's limited monopoly is the "first sale doctrine." This important consumer right allows the owner of a copy of a recording to sell or otherwise transfer that particular copy, regardless of the wishes of the copyright owner. Under the first sale doctrine, once the copyright holder first sells a recording, that purchaser may then lend, sell, or transfer that copy to another party as long as they do not retain a copy of the recording for themselves. According to the U.S. Supreme Court, "the whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution."

DRM systems are invariably based on a digital representation of your identity that's controlled by some third party. For example, in the case of the DRM technology found in Apple's iTunes and iPods (known as FairPlay, but I like to call it UnFairPlay), buying music from the iTunes Music Store (iTMS) requires an account -- one that's usually tied to a credit card.  To playback the music that's acquired through that account, your iPods and installations of iTunes software on your computers have to be associated with that account.  Music purchased through your account cannot be played back on an iPod that's associated with another account until that iPod is associated with your account (iPods can only be associated with one account at a time).  This architecture prevents you from executing your rights under the first sale doctrine.  If you buy a song through your account, there is no way to resell it, gift it, or will it (when you die) to someone else the way you can easily do that with a CD. 

The question raised by the German court decision, in my mind, is what's the difference between music bits and software bits.  To me, they're the same thing and when you acquire a license (which is essentially what you're acquiring when you buy music) to software, shouldn't the first sale doctrine apply? What about selling a used PC with the original media to someone else? Since most PC's come with Windows and other software installed, does German law prevent you from reselling that PC with its software?  Must you strip the software off the system first?

As a side note, perhaps demonstrating how law is out of lockstep with technology, this flies in the face of how Microsoft's Windows Genuine Advantage (WGA) authenticiation system works. Validating Windows involves a process that marries a specific Windows license to a unique thumbprint of your system based on its hardware configuration.  If you try to move that copy of Windows to another system, WGA will flag it as an illegal copy under the assumption that the legal copy is still running on the original system.