Court Finds That “Buy” Means to Buy

Posted on May 23, 2008
Filed Under Enterprise Software |

The consequences of this ruling are indeed significant, imagine a world where all those unused enterprise software licenses actually have residual value in a secondary market.

Let’s say you didn’t use 30,000 Oracle database seats or 15,000 SAP CRM seats and now you can go out and sell them to another company at a discount. That would certainly put a wrinkle in the business models of major enterprise software companies, as well as create an entirely new class of brokers who comprise this new market.

If Jones’s ruling is upheld on appeal, it will have important consequences for the software industry, where the legal fiction that software is merely licensed is widely employed. In addition to discouraging the market for used software, software firms have also attempted to use the “licensed, not sold” theory to enforce restrictions on reverse engineering that would otherwise be fair use under copyright law. If software is sold, rather than licensed, then no license is required to install and use the software, and the terms of shrink-wrap licenses may not be legally binding.

[From Court smacks Autodesk, affirms right to sell used software]

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