Selling software second hand, but also music and movies?

A software license often limits its use to the first "owner" or user. Court procedures in 2012 led to a remarkable modern view by judges. These views may hold for other data, such as music and e-books from download stores, as well. Publishers, do sleep on.

In my post "Save by using old hard- and software. Buying IT second hand" I wrote "Since most machines are, when new, sold including software (operating system and applications) this software will be included second hand as well. [...] Software does not suffer wear and tear and does not need to be refurbished, of course. [...] Not so in the software industry."

In fact most licenses of off-the-shelf applications limit the use of the software to a single person, a single computer or processor or maybe a single company. This does not only mean that only one person may use the software at any time (the broad view) but at every time (the restricted view). The ultimate consequence is that you do not have the right to donate your rights to someone else (as in books and CDs).

Let's get the more complicated situations out of the way: custom-made applications, business to business business (where legal restrictions are supposed to be better understood), embedded software. We will concentrate on software as it is delivered in a shop or downloaded from a web-store or which was pre-installed on your computer.
You do not own your programme, not even your original copy. So you are not free to do what you want with it. You are, according to most licenses, not allowed to sell or rent your software or give it away, not even if you delete any copies. That is how the situation was understood, even if most people are not even aware of this legal issue.

Without getting into the legalistic nitty-gritty the confusion comes in stages. If you go to a software developer like Microsoft (the obvious but certainly not the only one) or to any brick or click store, you are invited to 'buy' the latest version of package or game X. The 'seller' will convince that life is not worth living if you do not 'own' program Y.

In the old days you could get software in a nice box (like most games today) with a shrink wrap license. (BTW: These licenses are not valid for consumers in most of Europe because you cannot read it in full without opening the package before 'buying' it). Today you get a Click-OK license on-screen without which you cannot use or try the programme. The license will tell you, in legalistic terminology, that you have acquired and agreed to a license, with a lot of restrictions. It does not say "you did not buy this software and you are not the owner of this copy". But that is, in the end, what the license implies.

Such is how the world is perceived by the license-provider: "I have all rights to the software and you are allowed by me to make use of this service / product". So, if you are sick of my shoot-m-up game, you are not allowed to put it up for sale on an internet market. If a company goes into bankruptcy, the trustee cannot value the software licenses the bankrupt company keeps. Since software is core for a lot of business, the lack of ownership reduces the value of investments in software.

On 27 April 2012 the High Court of the Netherlands rules, in short, that software can be bought and sold in compliance with civic law. That means in fact a change of ownership, which leaves the acquirer free to act as he/she pleases. Copyright law prevents the making and distribution of copies except as replacement of the original. But selling, lending, renting, even destruction is fully allowed. Provided you do not use a second copy of the software.

In its verdict of 3 July 2012 (case C-128/11) the European High Court ruled along similar lines: "On those grounds, the Court (Grand Chamber) hereby rules:

1. Article 4(2) of Directive 2009/24/EC of the European Parliament and of the Council of 23 April 2009 on the legal protection of computer programs must be interpreted as meaning that the right of distribution of a copy of a computer program is exhausted if the copyright holder who has authorised, even free of charge, the downloading of that copy from the internet onto a data carrier has also conferred, in return for payment of a fee intended to enable him to obtain a remuneration corresponding to the economic value of the copy of the work of which he is the proprietor, a right to use that copy for an unlimited period.
2. Articles 4(2) and 5(1) of Directive 2009/24 must be interpreted as meaning that, in the event of the resale of a user licence entailing the resale of a copy of a computer program downloaded from the copyright holder’s website, that licence having originally been granted by that rightholder to the first acquirer for an unlimited period in return for payment of a fee intended to enable the rightholder to obtain a remuneration corresponding to the economic value of that copy of his work, the second acquirer of the licence, as well as any subsequent acquirer of it, will be able to rely on the exhaustion of the distribution right under Article 4(2) of that directive, and hence be regarded as lawful acquirers of a copy of a computer program within the meaning of Article 5(1) of that directive and benefit from the right of reproduction provided for in that provision".

This last case was about a copyright owner and a software license reseller shop. Yes, you can see a software license as property over which you have rights to resell as long as you do not retain a copy. So, your old laptop does not need to be wiped fully, no, you can provide the original, let's say, Windows XP license with it. And your older copies of Office as well. And any old game. This shatters a legal construct where the copyright owner forbids the license taker to resell the software.

If so, I have a question. Here the infringement procedures were about software, applications. Software is licensed data, protected by copyright en intellectual rights law and by seller specific licenses. However, a short while ago it became known that Apple restricts your rights on data (music, movies) licensed through the iTunes store. In a now famous Daily Mail (UK) article. Apple is accused of restricting the rights of inheritance for any item 'bought' from the iStore: You cannot inherit digital music or movies collected by the deceased.

Since this is about copyright and intellectual property, about licenses and about computer data, I feel that Apple's licenses fall in the same category as above because there is no difference between digital data, data and data. That means conclusively that products 'bought from' and licensed by the Apple iStore have to be considered as having been sold and bought, with all appropriate rights conveyed to the buyer, included resale, inheritance and lending.