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Federal Court Hates On Used Software Sales

by Adam Biessener on Sep 12, 2010 at 05:00 AM

The 9th Circuit of Appeals ruled in favor of Autodesk in its lawsuit against Timothy Vernor, saying that Autodesk has the right to limit second-hand sales of its software per its licensing agreements.

Vernor's case centered on the application of the first-sale doctrine, which is a century-old legal precedent that prevents merchants and manufacturers from regulating further sales of its products after the first transaction. The three-judge panel ruled that there was no definitive first sale in Vernor's situation, rendering the principle inapplicable to this specific case. The court instead sided with Autodesk's contention that the rights to install the software were being licensed, not sold.

If this decision stands and is expanded to software in general, this is bad news for consumers -- your games will hold no resale value, and you'll have no right to sell or trade games that you've bought. The used market would be illegal. Good luck finding classic games when it's unlawful to resell or trade them.

Admittedly, this doom-and-gloom scenario is a ways off. This single decision doesn't have that kind of immediate reach and impact. It is, however, a step in a decidedly consumer-unfriendly direction. As much as some developers and publishers would dearly love to kill the possibility of used sales, it's hard to see the upside for consumers in this scenario.

EDIT: Alert commenter Drew Williams points out that the original text of this article neglects to point out the counterargument, and that's a fair point. It's understandable why publishers and developers hate used sales -- they don't get anything from them. Buying a game used, whether it's from your cousin or your local retail store, gives nothing directly back to the companies who made it. On the other hand, the cash generated from used sales and trade-ins is reinvested in new games at a highly disproportionate rate. This is all tangential to the original point, however, which is that consumers lose out when the possibility of resale is legally removed. Resale value is a tangible thing, and adds value to a purchase. However you feel about used sales or GameStop or anything else, the bottom line is that losing that value is bad for consumers.

[Source: Associated Press via EvilAvatar]

[Full disclosure: Game Informer's parent company, GameStop, is heavily invested in the used games market.]