Krause v. Titleserv : software licenses limited - but outlier facts

(Michael) Madisonian Theory discusses a case concerning the "license" vs "owner" issues for software licenses (via Copyfight):

A win for software users: Krause v. Titleserv, Inc. (pdf), ... which contains a long and thoughtful analysis of Section 117 of the Copyright Act by Judge Leval. Section 117 grants certain rights to copy software to the "owner" of a particular copy, a phrasing that software companies have long seized on to justify many of the more onerous provisions of mass market software licenses. If a software user merely "licenses" the software, then (allegedly) the rights of "owners" don't apply. Judge Leval decisively and rightly rejects the idea that Section 117 can be bypassed by the software developer's unilateral characterization of the transaction as a "license." Importantly, the court goes on to hold that the defendant in the case could lawfully exercise the rights of a Section 117 "owner" even though it did not possess formal title to its copy of the program.

Having an intense interest in the topic of such onerous provisions, I spent the time to read through the case. Hold on to the party hats. It's not impressive, in my view (disclaimer: I'm not a lawyer, merely a hare running for his life).

The kicker is in this part of the decision (my emphasis):

We conclude in the absence of other evidence that Titleserv's right, for which it paid substantial sums, to possess and use a copy indefinitely without material restriction, as well as to discard or destroy it at will, gave it sufficient incidents of ownership to make it the owner of the copy for purposes of applying § 117(a)

Virtually every mass-market software license "EULA" has verbiage about terminating the license and restrictions on use. The basis of the court's decision seems to be that the programmer did not properly incant the magic phrases which run approximately "This is licensed, not sold. In the event of a dispute, your license may be terminated. You agree not to do the following list of actions ...".

So I can't see this case having much applicability to the general issue of the enforceability of mass-market software licenses. It's an outlier, where the facts of the dispute are sufficiently atypical so that the result isn't very meaningful regarding problems facing the vast majority of software users.

Moreover, the social framework of the case is a mid-ranking individual versus a business. Reading between the lines, the court seems to be being very expansive in legal construction in order to get to the outcome it sees as proper, of permitting the business use over the individual copyright claims:

Thus, a right to make those changes necessary to enable the use for which it was both sold and purchased should be provided. The conversion of a program from one higher-level language to another to facilitate use would fall within this right, as would the right to add features to the program that were not present at the time of rightful acquisition.

That's a very kind reading of the "right to make those changes necessary". I approve, of course. But given the "judicial flaming" I've now read over the years, I don't think this same kindness is going to be shown to any litigant viewed as a social trouble-maker. So I can't see it being much of a help overall. Sure, it'll go into any argument. But I can't see it'll do much good, sorry.

Seth Finkelstein's Infothought blog (Wikipedia, Google, censorware, and an inside view of net-politics) - Syndicate site (subscribe, RSS)