Publishers cannot oppose resale of digital products, says EU court

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  07 July 2012
Originally Posted by darthviper107: I think there has been cases where they said EULA's weren't binding.


A EULA is an example of a WEAK CONTRACT, because it is considered a type of "Shrinkwrap Contract".

To put in English, you see the terms of the EULA only AFTER you have paid money for the product, taken the product home, opened the product up, and attempted to use/install it.

This makes EULAs a legally WEAKER CONTRACT, than a REAL PRE-PURCHASE CONTRACT that you would actually sign BEFORE buying a product with money.
 
  07 July 2012
Bad news for smaller developers, I certainly couldn't afford to offer the support to transfer my plugins around between different licenses just because someone else is making a sale of my software. Of course people only think about the large companies that can absorb such costs, but for those of us already running into the ground due to piracy, i.e. the small man then no this isn't good news at all. I can see why the large firms that can afford it are going into the cloud and taking the software away from the end users completely, it'll just raise the bar for entry (and thus competition) another few notches, so they may well not oppose this.
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Last edited by Per-Anders : 07 July 2012 at 08:53 PM.
 
  07 July 2012
Quote:

Potential loss is because it's not necessarily true that they would have bought the software otherwise if they couldn't buy it used.

In each case there's still the same number of people using the software since the original owner can't use it anymore.



darthviper107, true but if there wasn't an option of buying it used, the only options would be to purchase a license at full cost or don't obtain and benefit from the use of the software (EDIT: Forgot about piracy, which at the end of the day is the same result for a company, loss of a sale). I don't think it matters that at the end of the line, there is only one person "still" using the software, there were four other people, per my example, that had use and benefit of the software and the company didn't receive any compensation.

Quote: Right, if they were all willing to pay full price to get it. If Bob only has $400, and Jim only has $300, neither will be buying the software priced at $1500.


moogaloonie, the software, in my example, was $500, not $1500. My point was that softwareX company only received $500 in compensation though $1500, in total, transferred between parties benefiting from the use of the software. If all parties that benefited from the use of the software had paid for said use to the company, the business would have received $2500.

So, in a sense, the company is charging the consumer a price for their product that inherently doesn't take in account that they will sell it, thus reducing the company's potential sales. My opinion is that they would have to increase the sale price of their product to take in account the reduction of sales due to the re-selling of their product. That's why I think they have this type of license arrangement and fight against these changes in law.

Quote:
If I buy a new car for $25,000 and sell it two years later for $12,000, do I cause the car company to lose a sale?


That would be a yes.

Last edited by eworc : 07 July 2012 at 09:04 PM. Reason: additional comment
 
  07 July 2012
Originally Posted by eworc: That would be a yes.


Not necessarily. Unless that manufacturer also has a presence in selling used cars, it is an entirely different market than buying buying new, IE, a sale that may have never occurred due to price/availability/etc. That manufacturer would also have to invest money to buy/refit/hire people etc to sell it again. If they don't do that, then they're obviously not in the market.

Also look at it from the position of the customer: Unsellable software is also a lost sale for them. Investing, buying and selling is the same thing to people and companies alike as we all use money!
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  07 July 2012
Quote: I don't think it matters that at the end of the line, there is only one person "still" using the software, there were four other people, per my example, that had use and benefit of the software and the company didn't receive any compensation.


You must be joking. Yes it did. It sold the application in first place.
Are you saying that Mercedes should collect money from every owner of their cars?
The builder of an house should get money from everyone that bought it along the time?

Quote: Bad news for smaller developers, I certainly couldn't afford to offer the support to transfer my plugins around between different licenses just because someone else is making a sale of my software.


It can be very well a fee to transfer the license giving then same support to the former owner. When a person sells a car there is also administrative costs that are part of process.
 
  07 July 2012
tuna, this is my understanding of how it works.

The OEM, say General Motors...sells the cars to dealerships. That's the OEMs sale.
You buy the car from the dealership. There is a direct line between the two transactions.

However, a used car is just between a buyer and the used car dealership. The OEM, General Motors, doesn't get another sale. They don't build a new car and sell it to the used car dealership and receive money.


So, yes, if you sell your new car a year later to another person, that OEM, General Motors, lost a sale.

Quote: Unsellable software is also a lost sale for them.


I don't disagree with that, but that's a different matter.
 
  07 July 2012
Quote: I think there has been cases where they said EULA's weren't binding.

EULA`s are not binding if they stand in contrary to the law (and only that part of the EULA
that is oposing).
At least in germany
 
  07 July 2012
Quote:

You must be joking. Yes it did. It sold the application in first place.
Are you saying that Mercedes should collect money from every owner of their cars?
The builder of an house should get money from everyone that bought it along the time?


The software company doesn't sell you ownership of the software, they only sell you a license to use it. I'm not saying that Mercedes should collect money from every owner of a specific car, etc. I am only saying that they lost a sale to every buyer of the subsequent transactions involving that car.

How about this scenario, closer to 3d software versus a physical product:


What if a Maxon sold a hundred licenses of their software to 3dmovie company A.
3dmovie company A uses the software for a month on a project and then sells their licenses
to 3dmovie company B. 3dmovie company B uses the software for a month on a project and then sells their licenses to 3dmovie company C. They use it, etc. and then sell the licenses back to 3dmovie company A.

The cycle continues to repeat. Maxon got their sale on the original hundred licenses sold but nothing further after that. There is only 100 "owners" of the license at any time. There are 300 users cyclically benefiting from the use of Maxon's product but no money goes in the coffers of Maxon after the original purchase. I don't see how that would work out to well for Maxon. Heck, this might actually be occuring as far as I know.

Last edited by eworc : 07 July 2012 at 09:59 PM.
 
  07 July 2012
Originally Posted by Bullit: It can be very well a fee to transfer the license giving then same support to the former owner. When a person sells a car there is also administrative costs that are part of process.

I'm not even sure where to begin. Why are you talking about cars? More importantly just who do you think that adminitrative fee goes to when a second hand car is sold/purchased? I'll give you a clue : it's not going to be Chrysler.
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  07 July 2012
the point is this - most companies basically sell you the software, or better, they make you think they sell the software. You will find "buy" all over the place and you have to pay a full price.
In the end though they only license you the software and thats the reason why they say you canīt resell.

I could live with both options - if I buy, then I want to be able to resell if I donīt need the software anymore. If I decide to license software, then it is clear that I only have the right to use the software and not resell it.

So problem is, in many cases companies have a crude mixture of buy and licensing and try to get the best of both worlds.

But I donīt think that it will change much - many companies already started to move into the cloud and more will follow - and then it is clear that a customer only purchases the right to use the software.
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  07 July 2012
Originally Posted by eworc: tuna, this is my understanding of how it works.

The OEM, say General Motors...sells the cars to dealerships. That's the OEMs sale.
You buy the car from the dealership. There is a direct line between the two transactions.

However, a used car is just between a buyer and the used car dealership. The OEM, General Motors, doesn't get another sale. They don't build a new car and sell it to the used car dealership and receive money.


So, yes, if you sell your new car a year later to another person, that OEM, General Motors, lost a sale.


I guess if another brand of OEM sells a car at all, anywhere, then GM in this example has also lost a sale by nature of there being more than 1 product on the market. This is just how selling things works. The used car is just another product.

Earlier I was presuming you meant they lost a sale, as in, they deserved to be compensated with money for the transaction other people had brokered with their own property. Which obviously you're not arguing.

[/derail]
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  07 July 2012
Originally Posted by Per-Anders: Bad news for smaller developers, I certainly couldn't afford to offer the support to transfer my plugins around between different licenses just because someone else is making a sale of my software. Of course people only think about the large companies that can absorb such costs, but for those of us already running into the ground due to piracy, i.e. the small man then no this isn't good news at all. I can see why the large firms that can afford it are going into the cloud and taking the software away from the end users completely, it'll just raise the bar for entry (and thus competition) another few notches, so they may well not oppose this.


why, you would have the exact same number of licensees, right? maybe you would have to track some licenses but I don't see how it can be a big issue because it can be automated. In fact I can see some benefits when a license is given to someone actually interested in using the software. Why on earth a failed busines in liquidation can't never resell its licenses to someone who can use them for instance, like any other company asset? A new client is always welcome in my company, they could mean future contracts and spare parts. Why on earth an user can't resell its license of software A, take the money and buy software B. And you still wonder why software monopolies exist. But I love how in this forum you always side with the fat cats.
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Last edited by Samo : 07 July 2012 at 11:19 PM.
 
  07 July 2012
I don't think it will really matter for future affairs. Adobe is already moving to the cloud, and Autodesk will soon too. At that point you are really only renting the software.
 
  07 July 2012
Originally Posted by Lars3D: I don't think it will really matter for future affairs. Adobe is already moving to the cloud, and Autodesk will soon too. At that point you are really only renting the software.


That is if they dont loose all their customers by doing so.

I dont see that happening in the next few years anyway. The hardware isnt there yet, not to mention all the potential connection nightmares.
 
  07 July 2012
I was about to post an agreement with the EU ruling, then I thought I was wrong and was going to write something else, but as I parsed it, I realized that the real issue is the contract.

My personal preference is that I don't care if my product is resold, so long as it isn't counterfeited. However, someone else's preference may be different. What this ruling does is prevent people who don't agree with me from being able to enforce that part of the contract that their users signed upon installing the software. So the EU says, "you can ignore that part", which I imagine is a slap in the face to the producers of such software.

In the 90s, GM licensed, not sold, the EV1 electric car to a select number of people. If a similar ruling were made for cars, EV1 "buyers" would have been able to resell their cars to anyone they wanted to. You can imagine the craziness that would take place if that had happened.

I don't make a distinction between software and hardware, and when I thought about it, I realized that it goes both ways.

That said, it is the government that enforces contract law. You can't do everything you want to do to someone else just because they agree to it. This is where we enter murky moral areas and arguments... and preferences. A company can want a tribal leader to sign over his people as slaves, but that doesn't make it right. At the same time, if there's no law against slavery, such a contract would be legal. So what we have is a court making a moral decision - people should be able to resell their software purchases. And any argument against that is just a statement of preference.

Last edited by trancerobot : 07 July 2012 at 11:13 PM.
 
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