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 Software Licences

Software Licences and the US First Sale Doctrine – Psystar judgment handed down

October 4, 2011

Key to Apple’s surging popularity have been the ease of use of its products and software, and seamless integration between its devices and services.

Arguably unique in the personal computer industry, Apple exercises strict controls over every element of its product line. This control over both the hardware and software used in its computers, peripherals and devices has enabled the company to ensure a consistent user experience worldwide, and to avoid compatibility issues which have in the past plagued other platforms.

However, this monopoly also means less choice for consumers. Often, PC users choose to buy their own commodity hardware, put it together and install their operating system of choice. The motivations for this are varied: some users are searching for bleeding edge performance; others are looking for value; and some simply enjoy the experience of building their own PC.

In the past a number of businesses have established themselves as alternative Mac hardware vendors – typically selling cheaper PCs tailored to be compatible with Apple’s OS X. A recent example of such a business, fighting Apple in the courts for the right to do so, is Psystar.

Some would argue that Apple are shooting themselves in the foot by preventing other vendors from selling compatible packages that might increase the user base of OS X, sell more copies of the operating system and, possibly, sell more devices developed to integrate with that operating system. However, Apple differs from companies like Microsoft in that it is arguably a hardware business. Allowing hardware competitors into the marketplace to increase software sales is not good business sense for the company. Particularly as the strength of Apple’s brand depends upon its ability to exercise strict controls over the user experience – “It just works”.

So, Apple’s software licence for OS X imposes significant restrictions on licensees. A recent US ruling highlights the utility of software licences in enabling developers to control how their work is used. At issue was whether the US first sale doctrine applied such that a purchaser could sell on Apple’s software as they saw fit – think buying a car and selling it on second hand. The court found, unsurprisingly, that customers are not buying the software itself – they do not own the software after they buy a disc holding a copy of OS X, or download it – they are merely granted a licence to use it subject to a range of restrictions. The terms of the licence they are granted preclude its use on other hardware.

This is bad news for Psystar but, as Groklaw points out, good news for proponents of Open Source Software. It affirms the (albeit widely accepted) presumption that a US purchaser of open source software is not entitled by way of the first sale doctrine to resell it on their own terms and thereby circumvent an open source licence.