More on software licenses and the "Krause" case - the worse, the more valid?

Michael Madison replies, concerning the discussion of software licenses and the case Krause v. Titleserv:

I think that the [Krause] case is important, and Seth thinks that it's less so. I focus on two things. First, though the case isn't the first appellate decision to interpret Section 117 to limit the power of a licensor to declare unilaterally that code is licensed (DSC v. Pulse in the Federal Circuit purports to come to the same conclusion), it's the first significant opinion to make that point a holding, by actually finding in favor of the purported "licensee" In other words, this court puts its money where its mouth is. Second, the opinion is written by Judge Leval, who knows a lot about copyright law and whose opinions and articles on copyright are widely read and respected. He's a heavyweight, and when he speaks, the copyright world usually listens.

I believe - I fear - that it's a very long way from the situation where one programmer did a bad job on the legal specification of the software "license", and hence lost out against a business client (as in the case under discussion), to overruling of the general mass-market "EULA" license imposed by a big vendor (which will surely be drafted by attorneys with a full command of the legal necessities).

I certainly find no comfort from this case myself, due to the differences between the atypical facts and what's likely to be the situation for someone sued for reverse-engineering or copyright violations. Would it be reasonable to paraphrase the current situation as "Ownership of a copy can't be retained by the mere phrase "Licensed not sold" - more is required"? Focusing on the first part of that sentence sounds hopeful, but it appears that the second part is the killer in practice.

Looking at the "DSC" case noted above:

The concept of ownership of a copy entails a variety of rights and interests. The fact that the right of possession is perpetual, or that the possessor's rights were obtained through a single payment, is certainly relevant to whether the possessor is an owner, but those factors are not necessarily dispositive if the possessor's right to use the software is heavily encumbered by other restrictions that are inconsistent with the status of owner.

It all seems to be saying that the more restrictive a licensing "agreement", the more likely a court will find that it is a valid licensed-not-sold situation, and hence the most effective action is to make the "license" as onerous as possible!

In fact, the logical implications of these decisions seems to be to encourage EULA's to be worse, to satisfy the "heavily encumbered" condition.

I don't like that near-paradoxical outcome. But it seems to be the inevitable result.

[Disclaimer: As always, I'm not a lawyer, merely a hare running for his life.]

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