Bad news for the first sale doctrine as it applies to software: the Supreme Court has declined to hear an appeal in the case of Vernor v Autodesk, in which a software dealer named Vernor picked up some brand new shrinkwrapped copies of Autodesk in an office liquidation sale and tried to sell them on eBay.

The company Autodesk had the sales shut down and Vernor sued, contending that he had the right under the first sale doctrine to resell that software. Autodesk stated that its software was only licensed, even when it was physically sold in a box, and as such could not legally be resold even if the box hadn’t been opened.

A lower court found for Vernor, but it was reversed on appeal, the appeals court finding the licensing argument persuasive. The declined appeal means the appeals court’s decision stands, though it only establishes precedent in the 9th Circuit. It’s remotely possible another circuit could make the opposite decision in some future case, causing SCOTUS to need to straighten out the contradiction, but I wouldn’t hold my breath.

This doesn’t have as many implications for e-books as it might, given that e-books are almost never sold on physical media the way software has commonly been, so it’s understood they’re “licensed” from the beginning since there’s no solid “thing” to sell. Still, it’s a bit worrisome to see first sale’s power dwindle still further—especially since this means that people can be bound by licensing agreements they’ve never agreed to or even had the chance to read (due to being shrinkwrapped inside the software).

(Found via TechDirt.)


  1. Chris, Vernor never should have gotten those boxes… the office that liquidated is at fault for offering them through liquidation instead of returning them to Autodesk or destroying them. If Vernor hadn’t gotten the boxes, there would be no issue of adhering to “licensing agreements they’ve never agreed to.” They were sold a leased car, and the car maker came forward. Fault goes to the original lessee.

    Not that this isn’t an issue, but let’s put blame where it belongs.

  2. I said “the office that liquidated,” not the liquidation company itself.

    If I was a company, and I went bust, it would be my responsibility to properly dispose of the software I bought. If I stupidly left it behind, my assets were liquidated by another party, someone else ended up with the software, and the software company later identified the software as “should have been turned in or destroyed,” responsibility for financial compensation to anyone due to the mistake would be mine. (Mind you, if I as a company went belly-up, good luck recovering any money in compensation from me…)

    A liquidation company should have the sense to ask, if they come across a product like that… but couldn’t be blamed for not having accurate information given to them.

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