Monday, October 25, 2010

Ninth Circuit Discusses Software Sale v. License

On September 10, 2010, the Ninth Circuit Court of Appeals issued a much awaited ruling in Vernor v. Autodesk ( addressing whether software purchasers are owners or licensees of the copies of the software in their possession. The court held that “a software user is a licensee rather than an owner of a copy of the software 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.”

The distinction between owner and licensee can be critical to both software publishers and software users because owners have certain rights not afforded to mere licensees under copyright law. If you are a software publisher, do your licenses have the necessary restrictive covenants? If you are a user, do your licenses restrict your ability to sell the software?