Is Buying Second-Hand Software Legal?

illegal to sell used software   Is Buying Second Hand Software Legal?This is by no means a legal document and don’t think that this substitutes for the opinions of an officer of the court. Let me be clear – I’m going to present to you the research that I’ve done and what it means to me. It is NOT legal advice. Now that is out of the way, lets get to the heart of the matter on whether buying second-hand software is legal or illegal.

This is a HUGE topic especially considering the international scope of MakeUseOf.com’s readership. I can’t possibly cover all the legal aspects, both criminal and civil, of anything for every country that our readers come from. My focus will be mostly on Canada and the United States, since that is where my familiarity lies. You will probably find that in the Commonwealth countries the laws are similar to Canada.

Criminal Law

What does illegal mean? That seems like a simple enough term, yet people use it in ways that have nothing to do with the meaning. For an activity to be illegal there has to be a law that prohibits the activity. If it’s just a recommendation or even a regulation against it, it isn’t really illegal. If we’re talking about criminal law, then no, I have not found a criminal code that lists selling second-hand software as illegal, specifically.

criminal   Is Buying Second Hand Software Legal?

That being said, a criminal court might find you in breach of a copyright law. I’m not sure exactly how, or if that’s reasonable, but courts can make some pretty out there rulings when it comes to copyright law. I went through the Digital Media Copyright Act and the World Intellectual Property Organizations recommendations. I didn’t find anything explicitly against selling second-hand software. I didn’t even find anything remotely associated to second-hand software sales.

Case Law

I also searched through two well-known Intellectual Property Law websites, Benedict.com and The Intellectual Property Server. My searches on selling second-hand software came up with inconclusive results as well.
case law   Is Buying Second Hand Software Legal?
In the European Union, apparently it is legal to sell licenses of software you are no longer using. In 2012, Oracle tried to sue UsedSoft for selling licenses to its enterprise database software. C/Net reports:

The rule applies to both physical media and copies of the software downloaded over the Web, according to the court.

The ruling applies to both downloaded software and copies of software on removable media. What does that mean? I can sell you the license and let you download the software, say, from my FTP site. But only in the European Union for certain.

The United States of America seems to have a somewhat more oppressive take on the sale of second hand or used software. They have something called the First Sale Doctrine when it comes to software.  To quote Wired magazine:

The first-sale doctrine is an affirmative defense to copyright infringement that allows legitimate owners of copies of copyrighted works to resell those copies. That defense, the court said, is “unavailable to those who are only licensed to use their copies of copyrighted works.”

What does that mean in plain English? It means, when it comes to software or anything carrying a license to use, no one has the right to sell that license again once they’ve bought it. How does that work for retailers? I don’t know.

This case was a result of a man trying to sell used copies of Autodesk software on eBay. eBay, in my opinion and to their credit, fought this ruling along with the American Library Association. Can you imagine buying a book and not being able to resell it?

The court said that when you buy a book you buy the book – you’re not just buying a license to read the book. Hmm. How does that work for eBooks? The appeals court sidestepped that issue by passing it off to Congress, saying that Congress can change copyright laws, “if it deems these or other policy considerations … require a different approach.”

What if you buy it in the U.S.A. and want to sell it in the E.U.? Who knows?

End User License Agreements

Then there are the End User License Agreements (EULA). EULA’s are a form of contract law. Basically you are giving the software company consideration, your money, for their consideration – the right to use their software. Something of value has to transfer from both parties for a contract to be a contract. Most EULA’s have not been tested in civil courts so it can’t really be said what a EULA can and can’t do. At least not until you are in court with the software company. My guess is they have better lawyers than you and more money and time to throw at the case, so you’ll probably lose.

eula   Is Buying Second Hand Software Legal?

Adobe has this answer to the question, “Once I’ve upgraded, can I use, sell, or transfer the previous versions of the software?”

No. Purchasing an upgrade to your product extends your existing license to cover the new version of Adobe software. It does not provide you with two separate licenses for the old version and the new version. For example, if you upgrade from Adobe Acrobat 6 to Acrobat 7, you cannot sell Acrobat 6 to someone else.

If you purchase a new license, rather than upgrade your old software, you are permitted to transfer your old license. That is, as long as you did not purchase the original license with a volume licensing arrangement.

Clear as mud, right? Let’s see what Microsoft has to say on the issue. After over an hour of trying to navigate the Microsoft site to find the EULA for the most recent version of Office, I couldn’t find the EULA. So I took a look at the EULA for my copy of Office 2010. Here’s what I found:

office license terms   Is Buying Second Hand Software Legal?

I don’t know where to look from here. But I think they are trying to say they own the software and all I can do is use it. You might be amazed what is actually in some of these EULA’s. Read our article, 10 Ridiculous EULA Clauses That You May Have Already Agreed To, for some laughs and shocks.

Digital Rights Management

In case there is any confusion about who owns the contents of whatever medium it is that you are using, many companies have come up with something called Digital Rights Management (DRM) methods. If you want to get a deeper view of what DRM is, check out the article, What Is DRM & Why Does It Exist If It’s So Evil?

DRM   Is Buying Second Hand Software Legal?

Basically, producers of content try to find a way to make sure that you don’t loan, rent, give, or sell their product by making it fail if you do. I’m not sure how this can be legal if there are used CD and record stores around. But it exists.

The Take Away

Is selling second hand software illegal? I don’t know. I don’t think anyone really knows. It appears like there are a lot of opinions and desires out there, but it also seems that nothing gets answered for certain until the case goes to the courts. That is a really expensive, embarrassing, and time consuming process. Make the best decision that you can. Contact the maker of the software and ask them if you’re really concerned and don’t understand. That’s about all I can suggest.

Image Credit: Criminal Court via gt8073a at Flickr, Gavel and Book via Shutterstock, EULA’s via DonkeyHotey at Flickr, DRM CD via rebopper at Flickr,

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15 Comments -

null

Serif (a UK company with a nice suite of programs) says you can sell or give their software to someone else as long as you’ve removed it from your computer. The new owner can register it, too. AND they put printed manuals in the box, that’s just all kinds of win!

Guy McDowell

Good to hear. I’ll be looking them up.
You may have touched on something here. The customer/software company relationship should not be an adversarial one but one of cooperation.
If we could all approach it this way, things could be better.

Scott M

All of our ownership and copyright laws should be revisited now that digital has entered.British Common Law is open and flexible and meant for adaptation and there will be many different interpretations,but until we begin to have something that is recognizable and easily understood,it should be done sooner rather than later.

Oron Joffe

Nice, point, but it’s English Common Law. Scotland has a different system, which is not based on “Common Law”.

dragonmouth

The Law is an ass or, in practice, a pretzel. Any competent lawyer can bend and twist the Law to his client’s advantage. In Law there isn’t just wiggle room, there si room for full-scaled contortions. To paraphrase Supreme Court Justice William O. Douglas’s (in)famous statement, justification can be found in the penumbras and emanations of the Law. Therefore, in practice, whether it is legal to buy/sell second hand software in the United States is up to the prosecutor’s discretion and/or the persistence of the plaintiff (software companies).

Guy McDowell

Unfortunately, you are right.

Shawn H Corey

Stop software piracy: use only FLOSS!

Zhong J

In the United States, most companies will generally prohibit you selling their product to someone else because the company will lost customers consistency and their profit falls down. This case is stressed heavily in the realm of pirating, measures of preventing users from uploading infringements materials have grown out of proportion to insinuate that lobbyists would consider convincing the Congress to pass the Bill that broadly censored the Internet.

What’s legal and illegal is solely influenced by the culture and nature of marketability. There’s patent in the US due to their belief that no one should take the work of another and used it without prompt permission. So, at the end, it comes down to the consumer.

macwitty

the question is if both the seller and buyer need to be in the European Union for making a transfer legal. Anyhow it is nice to see then taken the consumers stand for once

Oron Joffe

Great article, and very timely. One point you skipped over was the reason why EULAs exist in the first place (they don’t on books, music albums etc). Copyright Law (notwithstanding the differences between different countries), set the rules as to what the buyer may or may not do without permission from the publisher (e.g. the “First Sale Doctrine” you mention). Software publishers, starting with Microsoft in the early 80s, felt this did not give them enough control, so the replace the SALE of software with a “USER AGREEMENT”, which implied some sort of rental, or licence to use the software.
These are contracts between the vendor and the End User, so they leave the vendor free to determine the user’s rights and obligations, or for that matter, anything else they wish. In that way, software producers have attempted to nullify the provisions in copyright law. The reason EULAs have not been tested in court is that no-one can take the risk to do so. End users may find all their MS software – for example – recalled by the vendor, without explanation or recourse, and the vendors can’t afford to discover that in fact their contracts are not binding (for example, because the user cannot be expected to read, understand and accept 26 pages of a legal agreement on the screen when starting Mac OS X). Thus, only matters OUTSIDE the EULA are brought to court, such as the case of software resale you mentioned, or a similar recent ruling about music files.

null

If you think selling second hand software is dicey,wait till the TPP comes into effect.For the scary details,see: http://stopthetrap.net/

Peter H

Although I cannot “find” specific software at the moment, I know that I have read “licences” or “terms and conditions of use” printed on the envelopes which disks/diskettes used to come in. In many, if not all, there was a condition which allowed the “transfer” of the “licence” to another computer/owner “provided the program software was erased from the original machine” (my italics).

However, as you state above, the EULA (licence terms) of most software is so convoluted it is easier to buy a house and get a mortgage than to understand “owner” responsibilities/conditions of the EULA. For example, all of MS licences include one or more clauses which prohibit the use of the software for “illegal” uses.

What does that mean? In the US, it could be municipality, county, state or federal law. Does it cover only directly using the software “illegaly” say as in a crime or copyright infringement or indirectly like using Word to produce a timetable for a crime or for directions on how to do something “wrong”?

It is almost like the endlessly long leaflets from drug companies regarding “information” about what could go wrong when you use the drug even though a doctor has prescribed it. It only serves as a first-line defence against litigation rather than against the commission of a crime. It is trying to shift a “normal” responsibility to the user. And just try suing a city if you wreck your car on a pothole or access hole missing a cover or slipping on an icy or broken walk.

So, to cut a long story short, I believe you have a “licence” or a “right” to “dispose” of something provided you no longer are using it even if a “printed” statement prohibiting you from doing so is present. I do not think you have “only” a licence to make use of something be it physical or digital especially if you consider that, for example, e-books are more expensive than the same physical book which has a clause in it prohibiting reproduction in any way.

But can you afford to take the risk? Only you can decide – as long as you don’t unduly “profit” from it.

Guy McDowell

I think you hit the nail on the head – does the end user unduly profit from the resale? That should be the legal test really.

If I buy a copy of say, Windows, and then sell 10 copies of it that’s totally piracy and should be illegal. But if I buy one copy and then sell just that copy, asssuming I’ve made no other copies for myself, why should that be illegal?

Fabian_F_F

When it comes to justice, law and civil liberties I’m glad that I live in western Europe and not in the USA.

Josue Aguilar

It shouldn’t be. You buy something is yours. What the companies want is to make more money. So resell a car should be illegal ans so on. Of course every one apply the law in the way the is more convenient to them.