Last Friday, I had the pleasure of appearing on Episode 78 of This Week in Law with hosts Denise Howell and Evan Brown and fellow guest Lauren Gelman. You can view the podcast below or download it from iTunes.
I had a great time on the show and thought it might be helpful to provide a little additional information about the stories we discussed.
We started by discussing Google's termination of two employees for violating company policies on accessing user accounts and information. For obvious reasons, I can't comment on this particular situation. However, it seems to me that, generically speaking, a company that provides email or Internet messaging services can only do so much to protect user information. They can appropriately limit access to that information to employees who have been screened and need the information to perform their work. However, no matter how good the screening and training process may be, a few "bad eggs" will "slip through the cracks." When that happens, the company has to discipline the employees responsible and address the concerns of the affected users.
Then we discussed Microsoft's recent decision to effectively prohibit its lawyers from taking part in the Russian government's cracking down on software piracy as an excuse to suppress advocacy or opposition groups. Russian security services have seized computers from dozens of outspoken advocacy groups and opposition newspapers, claiming that they are investigating the theft of Microsoft's intellectual property. The raids are typically timed when the affected groups are attempting to draw attention to a cause or event and pro-government groups are rarely, if ever, investigated for software piracy. To stop the practice, Microsoft has granted a blanket license to advocacy and opposition groups and media outlets in Russia. Could the United States government use similar tactics here?
Next, we discussed the Ninth Circuit's decision in Verner v. Autodesk. It has been suggested that the decision marks a new and revolutionary direction for copyright law.
Of course, the legal principle articulated by the court in the Autodesk case - that software is not "sold" but licensed to each user - is not new. The United States District Court for the Northern District of California came to the same conclusion a decade earlier in Adobe Systems Inc. v. One Stop Micro, Inc., 84 F.Supp.2d 1086 (N.D. Cal. 2000). In One Stop Micro, the District Court held that the transfer of software from Adobe to its customers is made pursuant to a license and does not constitute a "sale" such that the "purchaser" can rely on the "first sale" defense to a copyright infringement action. The District Court reaffirmed this conclusion two years later in Adobe Systems Inc. v. Stargate Software Inc., 216 F.Supp.2d 1051 (N.D. Cal. 2002).
Under the facts of the Autodesk case, the Ninth Circuit's conclusion is not revolutionary. The exception to the first sale defense - for works that are leased, rented, or, presumably, licensed - is as old as the century-old defense itself. And, as Evan Brown pointed out, the application of that exception to software may not mean much as we move increasingly to cloud computing solutions.
Also, contrary to popular belief, the decision won't kill the "ownership" of books and music.
Books are different from software. "Software fundamentally differs from more traditional forms of medium, such as print or phonographic materials, in that software can be both, more readily and easily copied on a mass scale in an extraordinarily short amount of time and relatively inexpensively. One of the primary advantages of software, its ability to record, concentrate and convey information with unprecedented ease and speed, makes it extraordinarily vulnerable to illegal copying and piracy." Stargate Software, 216 F.Supp.2d at 1059. The buying public would never accept shrink wrap licenses for books that limit their transferability; if the book industry attempted to impose such restrictions, it would just make our public libraries busier.
What about e-books, you say? They're like music, probably.
And, "ownership" of music is already dead. If you get your music from iTunes (which most of us do), you probably don't own it, you just license it.
Our final story for discussion was the cease and desist letter Lucasfilm sent to the owner of Addroid asking him to change his company's name. Since Lucasfilm claims the exclusive right to the DROID mark, the cease and desist letter would be perfectly appropriate if the use of the Addroid name created a likelihood of confusion. To me, it's not news until suit gets filed.