10 VERNOR v. AUTODESK, INC., 621 F.3D 1102 (9TH CIR., future, would not violate the Copyright Act.
pyright Act. Autodesk
2010)
RULE:
The Copyright Act confers several exclusive rights on
copyright owners, including the exclusive rights to
reproduce their works and to distribute their works by sale
or rental. 17 U.S.C.S. § 106(1), (3). The exclusive distribution
right is limited by the first sale doctrine, an affirmative
defense to copyright infringement that allows owners of
copies of copyrighted works to resell those copies. The
exclusive reproduction right is limited within the software
context by the essential step defense, another affirmative
defense to copyright infringement. Both of these
affirmative defenses are unavailable to those who are
only licensed to use their copies of copyrighted works.
FACTS:
Defendant Autodesk, Inc. developed “AutoCAD,” a
popular computer-aided design and drafting program,
and sold several of its AutoCad packages to an
architectural firm. The sale was made under a limited
license agreement that stated that the license was
nontransferable and the software could not be transferred
or leased without Autodesk’s written consent. That firm
later sold its office equipment, including the AutoCad
programs, to plaintiff Timothy S. Vernor, who later tried to
sell them on eBay. Autodesk attempted to stop the sales,
but Vernor ultimately sold two packages. Vernor then filed
a lawsuit against Autodesk in federal district court seeking
a declaratory judgment that the two sales, and sales of
other AutoCAD packages that he might acquire in the
claimed it was still the owner of the software packages.
The parties’ filed cross-motions for summary judgment,
and the district court granted Vernor’s motion, holding
that the sales of the AutoCad packages were lawful
because of two affirmative defenses: the first sale doctrine
of 17 U.S.C.S. § 109(a) and the essential step defense of 17
U.S.C.S. § 117(a)(1). Autodesk appealed.
ISSUE:
Could Vernor invoke the first sale doctrine and the
essential step defense under the Copyright Act? No.
CONCLUSION:
The appellate court vacated the district court’s judgment
and remanded the case for further proceedings. The
court ruled that pursuant to the license agreement, the
architectural firm was a licensee, not an “owner of a
particular copy” of the AutoCad packages and was not
entitled to resell its copies to Vernor under § 109(a)’s first
sale doctrine. Vernor did not receive title to the copies
from the firm and accordingly could not pass ownership
on to others. Thus, Vernor could not invoke the first sale
doctrine. Nor could Vernor assert an essential step
defense on behalf of his customers. The sales by both the
firm and Vernor infringed Autodesk’s exclusive right to
distribute copies of its work under 17 U.S.C.S. § 106(3).
Because Vernor was not an owner, his customers were
also not owners of the AutoCad packages. Therefore,
when they installed the software on their computers, the
copies made during installation infringed Autodesk’s
exclusive reproduction right because they too were not
entitled to the essential step defense under 17 U.S.C.S. §§
106(1), 117(a)(1).