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Court rules (again) that Vernor can sell Autodesk software

Case and Court:

  • Vernor v. Autodesk, Inc. (W.D. Wash.).

In this blog’s previous coverage of the “Copy Ownership Cases,” I attempted to briefly summarize three important cases where ownership of copies is critical and so did not delve into a detail relevant to this update.

The decision in Vernor v. Autodesk from May of 2008 was a decision on Autodesk’s motion to dismiss the case. Motions to dismiss are among the first motions one might file in a federal case and occur prior to the exchange of documents or the deposition of witnesses that occurs during the discovery process. Typically once that discovery process is complete, the parties may bring motions for summary judgment in which a party will argue that, based on the undisputed facts, and resolving any disputed fact in favor of the other party, the court can simply apply the law to those facts and rule in their favor. In a grand demonstration of the ability of opposing lawyers to take on diametrically opposed world views, parties often both file such summary judgment motions, which are called “cross-motions” for summary judgment.

Such cross-motions for summary judgment were filed in Vernor v. Autodesk and the court held oral argument on the motions on Tuesday, Sep. 29, 2009. A few news outlets covered the oral argument: PC World, Zeropaid, Slashdot.

With somewhat dizzying speed, the court issued its opinion on the cross-motions for summary judgment the next day, Sep. 30, 2009. Having seventeen months to consider any new developments, the court was obviously not persuaded that anything important had changed as it reached the same conclusions for the same reasons, and directed the clerk to enter final judgment for Vernor.

The court’s opinion is, like its earlier opinion, careful, methodical, well-researched, and thorough. So many courts addressing the issue of copy ownership have dispensed with the question just by noting that software distributors claim to merely “license” and not to sell their software. The Vernor court finally cuts through this misleading way of framing the question by noting that “the use of software copies can be licensed while the copies themselves are sold.”

The court explains again why the Ninth Circuit precedent that it is bound to follow, United States v. Wise, requires the result that Vernor is the owner of the copies of the software. “Wise requires the court to look at a transaction holistically, and the court finds no basis for the conclusion that an agreement to permit perpetual possession of property can be construed as reserving ownership.” This is the key factor in copy ownership cases: perpetual possession. When a transaction results in an individual being entitled to perpetual possession of the copy, as was the case for Vernor, then courts should find that such individuals are owners of their copies, entitled to a “first sale” right to resell the copy if they so choose.

Autodesk now has to decide whether to appeal this ruling and has to do so without the benefit of Ninth Circuit guidance in UMG Recordings, Inc, v. Augusto, which has all the briefs filed but has not yet had oral argument and MDY Industries LLC v. Blizzard Entertainment, Inc., in which the briefing on appeal is still ongoing. Decisions in either of these cases could greatly clarify how things will go for Vernor and Autodesk, but the Ninth Circuit’s decisions in these cases are likely over a year away. However, the Vernor court has now, twice, provided a valuable roadmap for future courts that address the issue of copy ownership.

See Also:

Categories: Contract, Copyright Limitations and Exceptions.

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