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Re: license v license v /license/

From: RJack
Subject: Re: license v license v /license/
Date: Tue, 11 Jan 2011 16:16:12 -0500
User-agent: Mozilla/5.0 (Windows; U; Windows NT 6.1; en-US; rv: Gecko/20101207 Thunderbird/3.1.7

On 1/11/2011 3:36 PM, owl wrote:
In comp.os.linux.advocacy Alexander Terekhov<address@hidden>
Nice paper:

(Why License Agreements Do Not Control Copy Ownership: First Sales and
Essential Copies)

I especially like this part:

"When "license" is used as a noun in the copyright context, it
means something like, "a grant by the holder of a copyright to
another of any of the rights embodied in the copyright short of an
assignment of all rights" as in "The agreement contained a license
to reproduce 20 copies of the photograph."

When "license" is used as a verb it typically means "to give
permission or consent" as in "The author licensed her publication
right to the nation's largest distributor."

These uses of the word relate only to the intangible copyright.

The word "license" is also, unfortunately, used in conjunction
with tangible things. First, as a noun it is often used
synonymously with the terms "agreement" or "contract" when that
underlying agreement contains grants of copyright permissions, as
in "Did she sign the license?" This usage seems to lead to
confusion less often and I will not address it further here.

However, particularly in the software context, the word "license"
is used as a verb in yet another way that I wish to focus on.
Software distributors often say, "We only license our software. We
do not sell it." This is a difficult sentence to parse because of
the layers of ambiguity involved, but particularly from reading the
cases, one comes to understand that the intended definition is not
just that described above of "to give permission or consent" with
respect to some right of copyright, but instead is used in a way
that means something more like:

to transfer to another possession of a tangible object in which a
copyrighted work is embodied, for a specified period of time or
perpetually, without transferring title to the tangible object,
and typically providing at least some copyright permission.

It would be useful to have a different term to indicate this unique
use of "license." Something like "no title to the copy license"
would perhaps convey the intended meaning, but would be
exceedingly cumbersome. For purposes of clarity in this section,
when I talk about this sense of "license" I will place the word in
italics, like so: /license/.140

Usage of the word /license/ has caused rampant confusion. Before
considering some examples of this confusion, it is worthwhile to
provide some historical context on the development of this usage of
the term /license/. The Third Circuit explained, in an opinion from
1991, that:

When these form licenses were first developed for software, it was,
in large part, to avoid the federal copyright law first sale
doctrine... [Court describes software rental companies.] The first
sale doctrine, though, stood as a substantial barrier to successful
suit against these software rental companies, even under a theory
of contributory infringement. By characterizing the original
transaction between the software producer and the software rental
company as a license, rather than a sale, and by making the license
personal and non-transferable, software producers hoped to avoid
the reach of the first sale doctrine and to establish a basis in
state contract law for suing the software rental companies
directly. Questions remained, however, as to whether the use of
state contract law to avoid the first sale doctrine would be
preempted either by the federal copyright statute (statutory
preemption) or by the exclusive constitutional grant of authority
over copyright issues to the federal government (constitutional
preemption). (citations). Congress recognized the problem, and, in
1990, amended the first sale doctrine as it applies to computer
programs and phonorecords... This amendment renders the need to
characterize the original transaction as a license largely

But the usage, even if anachronistic, has persisted, in part
because software distributors wanted more than to defeat the first
sale doctrine in the case of software rental companies. Even after
Congress responded to that concern, software distributors were
unwilling to give up the /licensing/ fiction because it appeared to
provide a means to other desirable ends such as price
discrimination, controlling ancillary markets, and preventing
competition in related goods.142

The merits of permitting copyright owners these additional benefits
are not my focus. I am concerned with how the ambiguous use of the
word "license" has created a land mine for courts who end up
speaking imprecisely or in the worst case scenarios, reaching
erroneous conclusions.

The Microsoft Corp. v. Software Wholesale Club, Inc. opinion
provides one example. The court wrote, "However, a party that
licenses its products rather than selling them may avoid the
application of the first-sale doctrine. See, e.g., Harmony
Computers&  Elecs., (the fact that Microsoft licenses rather than
sells its products likely precludes application of the first-sale
doctrine); Novell, Inc., 2000 U.S. Dist. LEXIS 9975, at *7-18 (the
first-sale defense applied, but only because Novell sold, rather
than licensed, its software product)."143

What does the phrase "licenses its products" mean here? Both
"license" and "products" could have two meanings.144 If it just
means that a license, as in a grant of permission, is provided with
respect to some right of copyright, then it has fallen into the
error of ignoring 17 U.S.C. ยง 202, by failing to recognize the
possibility of ownership of a copy independent from ownership of
the copyright, to be discussed more fully next. But, if it instead
means /license/, that is, a transfer of possession without a
transfer of title to the copy, then one has presumed the answer to
the question being asked, that is, in trying to determine whether
someone is an owner of a copy, it is not much use to say that those
who are not owners of a copy do not have the rights of owners of a
copy. We knew this at the outset. What was wanted was a feature of
the transaction that would distinguish the owners from the
non-owners, other than the label applied by the copyright

regards, alexander.

Q. What would happen if doctors and lawyers worked for minimum wage?
A. Doctors would still get laid.

And some FSF lawyers would still fuck you with great predictability.

RJack :)

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