Recent Cases Should Make Software Licensors Review Their Distribution Methods And License Terms (And They May Even Make Us Look At Open Source Licenses In A Different Way)

Three recent copyright cases from the Ninth Circuit Court of Appeals, Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010), UMG Recordings Inc. v. Augusto, 628 F.3d 1175 (9th Cir. 2010) and MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928 (9th Cir. 2011), underscore how methods of distribution and license terms can be mutually reinforcing or, alternatively, mutually destructive. Software licensors should re-examine their methods for distributing their software and the terms of their licenses in light of these three important cases.

First Sale and Licenses. Let us take the first sale cases first. As a general rule, someone who becomes an owner of a copy of a copyrighted work may distribute that copy without infringing the copyright owner's distribution rights under the Copyright Act; owners of copies of computer programs have certain additional "first sale" rights, including the right to make copies essential to use. The owner of the copyright