Autodesk has lost (again) its bid to shut down eBay resellers of its terrifically expensive AutoCAD software—but the issues raised by the case aren't anywhere close to being settled.

The dispute arose when Autodesk was trolling eBay for sales of its software in an effort to cut down on piracy and counterfeit copies of AutoCAD. It found Tim Vernor, a full-time eBay reseller, who was offering AutoCAD far below the price of the newest version from Autodesk. The software maker managed to have Vernor's eBay access cut off for a month in 2007, and eventually sued him for copyright infringement in a federal court.

But Vernor's copies were't counterfeit; it emerged during the court case that he had obtained them from Seattle architecture firm Cardwell/Thomas Associates (CTA), which sold them in 2007 along with a bunch of old office equipment.

This didn't matter to Autodesk; the company asserts that it controlled the software anyway because it had only "licensed" it to customers under specific terms that eliminated the right to resell the software. US law typically gives a buyer the right to do what he or she likes with a product, including selling it to others (read our primer on the "first sale" doctrine).

As the judge sums up Autodesk's argument, "Autodesk believes that it still owns the AutoCAD packages in Mr. Vernor’s possession. It contends that it never transferred ownership of the AutoCAD packages to CTA. Indeed, in Autodesk’s view, it never transfers ownership of AutoCAD packages to anyone."

So did Vernor have the right to sell the copies?

Judge Richard Jones ruled in Vernor's favor in 2008. With discovery completed and both sides pressing the judge for summary judgment, Jones ruled again this week—again for Vernor.

One new wrinkle has emerged over the course of the case: CTA had actually agreed way back in 2002 to "destroy all copies of AutoCAD software in the AutoCAD packages that it [later] transferred to Mr. Vernor in 2007" as part of a discounted AutoCAD upgrade. So Autodesk went after CTA as well and obtained a consent decree in which the architecture firm "agreed that it had breached its promise to destroy the AutoCAD packages, and that it had transferred those packages to Mr. Vernor in violation of Autodesk’s copyright." Whoops.

Messy justice

But back to Vernor. Judge Jones ruled this week that Autodesk had in fact licensed its software, but that this was immaterial; what mattered was whether the license "transferred ownership" (more like buying a book) or was a "mere license" (more like renting a movie).

Although groups like the Electronic Frontier Foundation called the decision a major one for their side, Judge Jones made clear that the issue was swamplike in its murkiness. The Ninth Circuit, whose jurisdiction Jones is under, has issued various (and contradictory) ways of thinking about the difference between a "transfer of ownership" and a "mere license."

Jones was unable to reconcile the competing precedents, and so he decided the issue based the "oldest precedent among conflicting opinions from three-judge Ninth Circuit panels." That precedent favored the idea that Autodesk had essentially transferred ownership when someone purchased an AutoCAD license; that in turn triggered "first sale" rights to resell the software; that in turn vindicated Vernor's eBay auctions.

If this sounds like the messiest form of justice, it is. Jones even admits that if he had to follow more recent precedent, Autodesk would win the case.

Given the conflicting opinions and the fact that the Ninth Circuit is currently considering two similar cases (one about reselling "promo" CDs, the other involving game developer Blizzard), EFF and others hope that the Ninth Circuit will soon provide more clarity.

Killing software devs or killing libraries?

Both sides in the case resorted to apocalyptic rhetoric in making their cases. Autodesk told the court, for example, that "this court's interpretation of 'owner' will harm consumers and software producers alike. It suggests, for example, that software prices would rise if producers had to confront the possibility of resale, and that resale promotes piracy."

In other words, getting rid of used gaming and CD stores (the "secondary market") would actually lower prices for consumers. Vernor was skeptical of the claim, telling the court that "Autodesk’s preferred interpretation of 'owner' would give copyright holders of all stripes the ability to destroy secondary markets for their works by the simple expedient of declaring transfers of copies of their works to be 'licenses' rather than sales. For example, a book publisher could transfer its wares pursuant to licenses retaining title and barring resale or use by other parties, effectively eliminating not only the secondhand market, but preventing a library from lending the book as well."

Which do you want—the death of libraries or the crippling effects of software piracy? Judge Jones saw the question as a false dichotomy, chiding both sides. "Piracy depends on the number of people willing to engage in piracy, and a pirate is presumably just as happy to unlawfully duplicate software purchased directly from Autodesk as he is to copy software purchased from a reseller like Mr. Vernor," he wrote.

As for the death of the secondary market and the end of libraries, "Mr. Vernor’s fear of the destruction of established resale markets also seems misplaced. The court notes, for example, that widespread piracy of musical recordings from compact disks has not led the music industry to adopt a restrictive licensing regime like the one Autodesk advocates."

Listing image by Martin Newell