Software Copyright - EULAs and Rights of End Users

EULAs and Rights of End Users

The Copyright Act expressly permits copies of a work to be made in some circumstances, even without the authorization of the copyright holder. In particular, "owners of copies" may make additional copies for archival purposes, "as an essential step in the utilization of the computer program", or for maintenance purposes. Furthermore, "owners of copies" have the right to resell their copies, under the first sale doctrine and 17 U.S.C. § 109.

These rights only apply to "owners of copies." Most software vendors claim that their products are "licensed, not sold", thus sidestepping 17 U.S.C. § 117. American courts have taken varying approaches when confronted with these software license agreements. In MAI Systems Corp. v. Peak Computer, Inc., Triad Systems Corp. v. Southeastern Express Co., and Microsoft v Harmony, various Federal courts held that "licensed, not sold" language in an EULA was effective. Other courts have held that "no bright-line rule distinguishes mere licenses from sales...The label placed on a transaction is not determinative". The Ninth Circuit took a similar view (in the specialized context of bankruptcy) in Microsoft Corp. v. DAK Industries, Inc.