Re: Licencing (Quite Long)

From: Bruce Chambers (bchambers_at_nospamcableone.net)
Date: 05/15/04


Date: Sat, 15 May 2004 12:43:13 -0600

Greetings --

    I don't know why I bother, as so very many of those (present
company excluded, until it's demonstrated otherwise) who follow
Kurttrail seem, to be bound and determined not to be influenced by
rational arguments, exactly like Kurttrail, but.... "Once more into
the breech," as the saying goes.

"Ian Merrithew" <optimus2861@nooospammm.com> wrote in message
news:pan.2004.05.15.16.02.05.944420@nooospammm.com...
>
> I have, and I don't (and the last time I quoted law at you, you
> spouted
> off about needing to be a lawyer to give "legal advice" in a public
> forum, remember? No, you probably don't -- but your long-standing
> assertion that breaking the one computer-one copy term violated
> copyright
> law disappeared from your copy-and-paste replies shortly thereafter;
> did
> you ever fix the grammar?). Rather than insinuate that those who
> don't
> share your opinions must not have read the law, or that those who
> have
> done so are "amateurishly crude", you could try constructing an
> actual
> counter-argument....

    I remember. I'm not proud of it, but I did let my distain for
Kurttrail and his followers get the better of me, and I did say that.
It was hypocritical, and a mistake that I regret. I then let my
resulting embarrassment influence and weaken my subsequent posts.
After further study of the issue, reading other sources, however, I'm
even more certain than ever that violating the EULA is a violation of
U.S. copyright law. I'll have to put that warning back into my
standard reply, with an appropriate disclaimer. Thanks for reminding
me. (BTW, what grammatical error? I dislike such intensely, so
please let me know if I haven't fixed it.)

    And I have not "insinuated" that those who have actually read
TITLE 17 are amateurishly crude. I did, however, describe Kurttrail's
attempts to re-interpret the Code to support his viewpoint as such.
Further, his attempt is, to me, at least, glaringly self-serving and
transparent. As for offering a counter-argument, that was done long
ago:
http://groups.google.com/groups?sourceid=navclient&ie=UTF-8&oe=UTF-8&q=What+is+particularly+laughable+is+Kurttrails+attempts+to+quote+Title+17 ,
and need not be repeated here.

>
> This, however, does not mention fair use,

    Ah, yes. The much-ballyhoo-ed "Fair Use" argument. This is
nothing more than a red herring that isn't even applicable in the case
of making unauthorized copies of software for daily use, either
personal or commercial. Specifically:

    "Fair use is a copyright principle based on the belief that the
public is entitled to freely use *portions* of copyrighted materials
for purposes of *commentary and criticism*. For example, if you wish
to criticize a novelist, you should have the freedom to quote a
portion of the novelist's work without asking permission. Absent this
freedom, copyright owners could stifle any negative comments about
their work."
(http://fairuse.stanford.edu/Copyright_and_Fair_Use_Overview/chapter9/index.html)
(Emphasis mine.)

    "Judges use four factors in resolving fair use disputes, which are
discussed in detail below. It's important to understand that these
factors are only guidelines and the courts are free to adapt them to
particular situations on a case-by-case basis. In other words, a judge
has a great deal of freedom when making a fair use determination and
the outcome in any given case can be hard to predict.
"The four factors judges consider are:

  1.. the purpose and character of your use
  2.. the nature of the copyrighted work
  3.. the amount and substantiality of the portion taken, and
  4.. the effect of the use upon the potential market. "
(http://fairuse.stanford.edu/Copyright_and_Fair_Use_Overview/chapter9/9-b.html)

    Feel free to peruse the entire article, which will make it
abundantly clear that there is no way that anyone could successfully
argue that installing a second copy of an operation system onto a
second computer, without the copyright holder's express permission,
for the sole purpose of not having to buy a second license, could
possibly meet the criteria of "Fair Use." (Although, I suppose it is
theoretically possible that a judge might so rule, someday, but I
seriously doubt that such a ruling would withstand appeal.)

    All of which brings us to:

>
> At least now we boil it down to whether or not clicking on "I
> Accept"
> during the installation of the software forms a binding contract --
> I
> would argue that it does not, for at least two reasons:
>
> 1) You have no option. Under copyright law (Can. & USA), I have the
> right
> to install & use the software without having to agree to any
> additional
> terms. The installer doesn't give me any way to exercise that right
> without agreeing to additional terms (if I click "I Do Not Accept"
> the
> installer exits) -- that's coercion.
>
> 2) No consideration. The right to install and use my copy of
> software is
> mine under copyright law, not Microsoft's. I can give up that right
> to
> Microsoft in a contract, but Microsoft would have to give me
> something
> back in exchange. The EULA doesn't give me a thing. There's no
> "meeting
> of the minds" here -- no contract.
>

    All of which _has_ been tested in U.S. Federal court, and has been
validated, despite your opinions and claims to the contrary. The
principle of shrink-wrapped licensing has been upheld. Ironically, I
owe this knowledge to Kurttrail, who originally cited a small portion
of the relevant court decision out of context in another transparent
effort to justify his own claims. He really shouldn't have used an
example that so thoroughly undermined his own position. (I've changed
the word "Zeidenberg," the plaintiff in the original case, and
""ProCD," the defendant, to more relevant names/pronouns in brackets
( [ ] ) for ease of understanding in a few places. Please read the
original to verify that I've intentionally distorted noting in doing
so. Also, any emphasis below is mine.)

    The quotations of relevant parts of the United States Court of
Appeals For the Seventh Circuit, case # 96-1139
(http://www.law.emory.edu/7circuit/june96/96-1139.html), the decision
written by U.S. Federal Judge Easterbrook:

    "Shrinkwrap licenses *are* enforceable unless their terms are
objectionable on grounds applicable to contracts in general (for
example, if they violate a rule of positive law, or if they are
unconscionable)."

    "Following the district court, we treat the licenses as ordinary
*contracts* accompanying the sale of products, and therefore as
governed by the common law of contracts and the Uniform Commercial
Code."

    "... the district court held, that placing the package of software
on the shelf is an "offer," which the customer "accepts" by paying the
asking price and leaving the store with the
goods."

    "Vendors can put the entire terms of a contract on the outside of
a box only by using microscopic type, removing other information that
buyers might find more useful (such as what the software does, and on
which computers it works), or both. The "Read Me" file included with
most software, describing system requirements and potential
incompatibilities, may be equivalent to ten pages of type; warranties
and license restrictions take still more space. Notice on the outside,
terms on the inside, and a right to return the software for a refund
if the terms are unacceptable (a right that the license expressly
extends), may be a means of doing business valuable to buyers and
sellers alike."

    "Transactions in which the exchange of money precedes the
communication of detailed terms are *common.* Consider the purchase of
insurance. The buyer goes to an agent, who explains the essentials
(amount of coverage, number of years) and remits the premium to the
home office, which sends back a policy. .... Yet the device of
payment, often with a "binder" (so that the insurance takes effect
immediately even though the home office reserves the right to withdraw
coverage later), in advance of the policy, serves buyers' interests by
accelerating effectiveness and reducing transactions costs. Or
consider the purchase of an airline ticket. The traveler calls the
carrier or an agent, is quoted a price, reserves a seat, pays, and
gets a ticket, in that order. The ticket contains elaborate terms,
which the traveler can reject by canceling the reservation. To use the
ticket is to accept the terms, even terms that in retrospect are
disadvantageous. See Carnival Cruise Lines, Inc. v. Shute, 499 U.S.
585 (1991); see also Vimar Seguros y Reaseguros, S.A. v. M/V Sky
Reefer, 115 S. Ct. 2322 (1995) (bills of lading). Just so with a
ticket to a concert. The back of the ticket states that the patron
promises not to record the concert; to attend is to agree. A theater
that detects a violation will confiscate the tape and escort the
violator to the exit. One could arrange things so that every
concertgoer signs this promise before forking over the money, but that
cumbersome way of doing things not only would lengthen queues and
raise prices but also would scotch the sale of tickets by phone or
electronic data service."

    "Consumer goods work the same way. Someone who wants to buy a
radio set visits a store, pays, and walks out with a box. Inside the
box is a leaflet containing some terms, the most important of which
usually is the warranty, read for the first time in the comfort of
home. By [Kurttrail's and your] lights, the warranty in the box is
irrelevant; every consumer gets the standard warranty implied by the
UCC in the event the contract is silent; yet so far as we are aware no
state disregards warranties furnished with consumer products. Drugs
come with a list of ingredients on the outside and an elaborate
package insert on the inside. The package insert describes drug
interactions, contra-indications, and other vital information--but, if
[Kurttrail and you are] right, the purchaser need not read the package
insert, because it is not part of the contract."

    "Next consider the software industry itself. Only a minority of
sales take place over the counter, where there are boxes to peruse. A
customer pay place an order by phone in response to a line item in a
catalog or a review in a magazine. Much software is ordered over the
Internet by purchasers who have never seen a box. Increasingly
software arrives by wire. There is no box; there is only a stream of
electrons, a collection of information that includes data, an
application program, instructions, many limitations ("MegaPixel
3.14159 cannot be used with Byte-Pusher 2.718"), and the terms of
sale. The user purchases a serial number, which activates the
software's features. On [Kurttrail's and your] arguments, these
unboxed sales are unfettered by terms--so the seller has made a broad
warranty and must pay consequential damages for any short-falls in
performance, two "promises" that if taken seriously would drive prices
through the ceiling or return transactions to the horse-and-buggy
age."

    "What then does the current version of the UCC have to say? We
think that the place to start is sec. 2-204(1): "A contract for sale
of goods may be made in any manner sufficient to show agreement,
including conduct by both parties which recognizes the existence of
such a contract." A vendor, as master of the offer, may invite
acceptance by conduct, and may propose limitations on the kind of
conduct that constitutes acceptance. A buyer may accept by performing
the acts the vendor proposes to treat as acceptance."

    *This is exactly what happens when one installs the software and
clicks "I agree" to the EULA.*

    "[Microsoft] proposed a contract that a buyer would accept by
using the software after having an opportunity to read the license at
leisure. This [the Windows user] did. He had no choice, because the
software splashed the license on the screen and would not let him
proceed without indicating acceptance."

    "Ours is not a case in which a consumer opens a package to find an
insert saying "you owe us an extra $10,000" and the seller files suit
to collect. Any buyer finding such a demand can prevent formation of
the contract by returning the package, as can any consumer who
concludes that the terms of the license make the software worth less
than the purchase price. Nothing in the UCC requires a seller to
maximize the buyer's net gains."

    "Section 2-606, which defines "acceptance of goods", reinforces
this understanding. A buyer accepts goods under sec. 2-606(1)(b) when,
after an opportunity to inspect, he fails to make an effective
rejection under sec. 2-602(1)....We refer to sec. 2-606 only to show
that the opportunity to return goods can be important; acceptance of
an offer differs from acceptance of goods after delivery, see Gillen
v. Atalanta Systems, Inc., 997 F.2d 280, 284 n.1 (7th Cir. 1993); but
the UCC consistently permits the parties to structure their relations
so that the buyer has a chance to make a final decision after a
detailed review."

    The one part of your claim I really don't understand is your claim
that copyright law gives you a "right" to copy, install, (perhaps)
distribute, and/or use software as you see fit. Please provide a
specific reference where this "right" is clearly defined. I can't
find it anywhere in the U.S. Code. Remember, the law's purpose is to
protect the rights of the copyright holder.

> We've also got the pesky little anonymity problem, but I'll leave
> that
> aside.

    I'm sorry, but what problem is this? I post using my real name,
and I'm assuming that you do the same, unlike Kurttrail and a great
many others who share his views. (I can't help wondering if they're
somehow ashamed of their stance.)

>
> And even if it is a binding contract, kurt is correct in saying that
> breaking it is not illegal, and Microsoft would have to sue you in a
> court
> of law to attempt to enforce its terms. Have they ever done so to a
> home user for private noncommercial use? No.
>

    Oh, come on, now. Isn't this a bit like saying that murder isn't
illegal unless the murderer is captured and convicted? A crime has
still been committed, whether or not the guilty party is ever brought
to justice. (And no, I'm _not_ equating contract violation with
murder, or civil law with criminal law; it's just an example.) While
the law sometimes admittedly isn't of very much value if it isn't
enforced, it's still the law.

Bruce Chambers

--
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