When Seattle resident Tim Vernor put a used copy of software for sale on eBay, the software’s maker, Autodesk, demanded that eBay cancel the listing. Although Vernor was selling an authentic, original copy of Autodesk’s software, the company pointed to a “license agreement” contained in the software’s box that prohibited anyone from selling or giving the software away. Vernor had purchased the software at a garage sale and had never agreed to abide by Autodesk’s terms, but the company nevertheless argued that Vernor’s failure to abide by the licensing terms infringed its copyright.
These kinds of abusive licensing terms are increasingly common and are bad for consumers. When a company prohibits resale, it eliminates the secondary market for used copies of the product. And with fewer copies on the market, competition is reduced and prices go up.
