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First Sale Doctrine Gets Multiple Views in Ninth Circuit

BY Stan Soocher
February 28, 2011

The first sale doctrine generally gives “the owner of a particular copy or phonorecord lawfully made under [the Copyright Act], or any person authorized by such owner” the right “without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” See, 17 U.S.C. '109(a). Recently, there has been a spate of Ninth Circuit rulings on the doctrine ' all of which have implications for the entertainment industry ' from application of '109(a) to computer software buyers, to imported goods, and to promotional CDs that record companies send to disc jockeys and music critics.

Software Buyer Is Licensee

In Vernor v. Autodesk Inc., 621 F.3d 1102 (9th Cir. 2010), the Ninth Circuit ruled that, for purposes of the first sale doctrine, a computer software buyer was a licensee, rather than an owner, of the software copies. Autodesk produces computer software for architects and engineers. Timothy Vernor purchased several used copies of Autodesk's AutoCAD Release 14 that had been initially acquired by an authorized buyer. Vernor filed suit in the U.S. District Court for the Western District of Washington for a declaratory ruling that his resale of the used copies on eBay was non-infringing. The district court ruled in Vernor's favor. Vacating and remanding, the Ninth Circuit noted that “a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user's ability to transfer the software; and (3) imposes notable use restrictions.”

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