Scott E. Bain, Keith Kupferschmid, and Mark Bohannon, foramicus curiae Software & Information Industry Association.Robert H. Rotstein, Patricia H. Benson, and J. Matthew Wil-liams of Mitchell Silberberg & Knupp LLP, for amicus curiaeMotion Picture Association of America, Inc.
CALLAHAN, Circuit Judge:Timothy Vernor purchased several used copies of Autodesk, Inc.’s AutoCAD Release 14 software (“Release14”) from one of Autodesk’s direct customers, and he resoldthe Release 14 copies on eBay. Vernor brought this declara-tory judgment action against Autodesk to establish that theseresales did not infringe Autodesk’s copyright. The districtcourt issued the requested declaratory judgment, holding thatVernor’s sales were lawful because of two of the CopyrightAct’s affirmative defenses that apply to owners of copies of copyrighted works, the first sale doctrine and the essentialstep defense.Autodesk distributes Release 14 pursuant to a limitedlicense agreement in which it reserves title to the softwarecopies and imposes significant use and transfer restrictions onits customers. We determine that Autodesk’s direct customersare licensees of their copies of the software rather than own-ers, which has two ramifications. Because Vernor did not pur-chase the Release 14 copies from an owner, he may notinvoke the first sale doctrine, and he also may not assert anessential step defense on behalf of his customers. For thesereasons, we vacate the district court’s grant of summary judg-ment to Vernor and remand for further proceedings.