Archive for the 'Copyright' Category

Amazon and Kindle library story highlights limited rights over digital media library

Yesterday the media picked up on the story of “Linn”, who was notified by Amazon that her account had been closed because it had been associated by Amazon with another account that had been closed for abuse of Amazon’s polices. Amazon has apparently refused to provide any further information, simply referring Linn to its terms of use, which provide Amazon with fairly wide rights to suspend accounts.

“Plenty more online bookstores out there. What’s Amazon’s loss is iTunes’ gain” you might say. Well, yes. But Linn has a Kindle, and the effect of her account being terminated is that she was unable to access any Kindle e-books previously “purchased” using the account (contrary to reports, her Kindle was not wiped, but as her old Kindle is broken she has been unable to download the books in her library onto a replacement Kindle).

Unfortunately for Amazon, Linn is the friend of a Norwegian tech journalist called Martin Bekkelund, and the story was covered by a wide range of high profile media outlets such as the Guardian, Yahoo!, Computing (and now BrodiesTechBlog). A link to the original story on Martin Bekkelund’s blog was also retweeted to 300,000 odd people by the broadcaster and columnist Catlin Moran.

Ownership vs a right to use
Whilst this has turned into a bit of a PR disaster for Amazon (and once again shows the power of Twitter to run with a story and influence popular opinion), it also provides a timely reminder of the difference in rights to the purchase of traditional media such as paper books and CDs and digital media.

John has blogged about this before. As the Amazon terms of use document notes:

Kindle content is licensed, not sold”. Should you attempt to break the DRM security block or transfer your purchase to another device, Amazon may legally “revoke your access to the Kindle Store and the Kindle Content without refund of any fees

and…

Your rights under this Agreement will automatically terminate if you fail to comply with any term of this Agreement. In case of such termination, you must cease all use of the Kindle Store and the Kindle Content, and Amazon may immediately revoke your access to the Kindle Store and the Kindle Content without refund of any fees.

In other words, if you misuse your content (or your wider Amazon account), Amazon can take it off you.

Whilst Amazon has now apparently restored Linn’s account at the time of writing Amazon has still not explained what Linn is alleged to have done wrong, or why her account was suspended (this, to my mind, is the more concerning bit of the story, given the impact of the suspension – if I were Linn then I would submit a subject access request to Amazon EU SARL (Amazon’s Luxembourish trading company for its European operations, and the data controller in respect of Amazon.co.uk).

Either way, those creating in valuable digital libraries that are subject to DRM controls should pay careful attention to their compliance with terms of use.

Brodies Intellectual Property Survey Results- download now!

Recently we carried out a snapshot 60 second survey on Intellectual Property (IP) in conjunction with ADS, ScotlandIS and SCDI. We were keen to learn more about how businesses are dealing with such valuable key assets and what IP issues are of most importance to them. Responses were received from both large and small companies from a broad range of sectors.

The survey asked a number of key IP related questions such as whether audits were carried out to keep a track on the extent and value of IP, how it was used on social media platforms and whether businesses were involved in IP disputes. The results provide an interesting snapshot and insight into how businesses are dealing with IP as well as highlighting some areas where altering how IP is managed could improve the competitive advantage it gives to a business as well as maximising commercial returns.

We would like to share the results with you. They are available to download here 

Robert Buchan

IPR infringement and mobile apps – why Apple provides an online reporting tool

Last week’s iOS Dev Weekly email contained an item on the online facility provided by Apple to allow you to report alleged IPR infringement issues with apps on the App Store:

…If you are having copyright or trademark issues [or in fact any other IPR] with your app Apple now have a dedicated App Store process for dealing with this. What I found interesting about the description of this is that it states that it will put you directly in contact with the provider of the disputed app. Surprising.

From Apple’s perspective, this actually makes a lot of sense. Here’s why.

Pretty much anyone can publish an app for distribution by Apple through the App Store. However, whilst Apple does do some quality control on apps that are submitted, it doesn’t have the resources (or time) to carry out an indepth analysis of whether the submitted app infringes any third party IPR. It simply isn’t cost effective for Apple to do so, given the global nature of the App Store – researching whether a particular app infringed third party copyright, patents or trade marks in various countries around the world would cost many, many, thousands of dollars.

This means that there is a very real risk that apps available for sale on the App Store might infringe a third party’s IPR – whether through deliberate infringement, unintended copying, being unaware of a pre-existing patent (whether in the same territory or abroad) or simply the sale of an app by, say, a British registered trade mark holder in a country where the trade mark in question is already owned by someone else.

The dispute process
When an IPR infringement claim does come to light, for the reasons given above it is not practical for Apple to investigate it. It just isn’t worth its while as there’s no financial benefit to Apple from doing so, and Apple is unlikely to have the information required to respond to the complaint. So, instead, it makes much more sense for Apple to provide a facility for complainers to submit a claim straight to the person or organisation that submitted the allegedly infringing app so that the two parties can sort out the dispute directly.

In the meantime, in my experience Apple will suspend (or threaten to suspend) the allegedly infringing app. This keeps Apple in the clear in terms of any alleged infringement by Apple (remember, Apple is simply an agent (or Commissionaire) – it doesn’t licence/sublicence non-Apple apps to end users) and its obligations under the DMCA, as it has taken action as soon as it became aware of the issue, and puts the onus on the recipient of the infringement claim to sort it out so that it can get its app back on the market.

Of course this approach isn’t without its problems – particularly for those on the receiving end of an infringement claim, as the online reporting tool is open to vexatious and frivolous claims, with the onus on the recipient to then demonstrate to Apple that there isn’t an issue. But for aggrieved rights holders it provides an effective way of raising IPR infringement issues directly with the alleged infringer.

Be prepared
It also emphasises the importance of thinking about your IPR before you launch your app.

Are you comfortable that your chosen brand won’t infringe that of a third party? Have you thought about who owns IPR in foreign jurisdictions before you launch an app globally? Are you sure that any third party code utilised in your app is properly licensed? Have your developers assigned across ownership of any code they create? Have you taken steps to register any regiserable IPR that you create?

To learn more about protecting your IPR, download our free guide.

PS It’s not just Apple. A quick check reveals similar facilities on Google Play for copyright infringement and trade mark infringment (although on the latter it appears that Google will actually carry out some investigation itself).

iHard: Bruce Willis and ownership of downloaded content

It seems that last week’s widely-repeated story that Bruce Willis was preparing to sue Apple for ownership of songs downloaded from iTunes was unverified and probably untrue.

Journalists can be forgiven for hedging their bets however, as resale of digital assets a complex subject. In fact, you could say it is pretty “iHard” to understand.

A licence to use
When you buy a music download you are actually paying for a contractual right – a licence – to permit you to do something with that copyright work that would otherwise be contrary to the author’s copyright. (For further discussion of the bundle of rights which protect songs, read this Tech Blog from last September.) 

The licence will set out what you can do with the copyright work, e.g. listen to it in private, burn it to CD/download it to other devices up to a set number of times etc. If what you are doing is not expressly permitted under the licence then you are probably infringing copyright.

In this respect the rights obtained by a purchaser of a music download from iTunes are no different to the rights acquired by a purchaser of a CD from a high street store. If you buy a CD you own the physical CD, but you don’t own the songs on it.

The practical differences are that:

  1. the licensed products are embodied in a physical CD, permitting easy transfer; and
  2. the first-sale doctrine applies to CDs.

The first-sale doctrine provides that once copyright products embodied in a physical object are introduced in the market in a given territory, the right holder loses control of them, and they can be freely resold, lent, or given away by the purchaser. In other words, the purchaser of a CD containing songs has the right to resell, lend or give away their copy of the songs (although not copies of their copy – which is an important distinction.)

The first-sale doctrine
There are various historical justifications for the first-sale doctrine (market failure; the free movement of goods; the impossibility of controlling the uses of a purchased copyright work; enhancing the circulation of culture), and a very similar concept called “exhaustion of rights” exists in the EU.

The catch is that the World Intellectual Property Organization Copyright Treaty (the international treaty on copyright law adopted by the member states of the World Intellectual Property Organization, including the US and, through the Council of the European Union, the EU) limits application of the first-sale doctrine to “fixed copies that can be put into circulation as tangible objects- not intangible content distributed over the internet”.

This means that if the licence for a digital copyright work prevents making copies of it, or prevents transfer of the licence, then reselling, lending or giving away that work is forbidden. (The degrees to which major players such as Amazon and Apple explicitly forbid such transfer is a matter of licence interpretation, and tends to be debated amongst lawyers and academics.)

Posited potential “workarounds”, particularly in the case of death of the owner, include: creating a legal trust (though this seems far-fetched – you can’t change a licence through a trust); burning your media onto a device and bequeathing that device in your will; or writing down the password. As noted above, the legality of these methods will depend on interpretation of particular licence terms.

The distinction between physical and digital content appears increasingly untenable
The European Court of Justice recently ruled that, in relation to a computer program, the rights of the copyright owner Oracle in relation to a copy of is software had been exhausted – even though the software had been downloaded from the internet. 

The judgment addressed the distinction between tangible or intangible forms of the computer program, concluding (via a rather circuitous route that deeemed the Computer Program Directive to be a lex specialis of the Copyright Directive):

it must be considered that the exhaustion of the distribution right under [the Computer Program Directive] concerns both tangible and intangible copies of a computer program”

In theory therefore, although the judgment’s treatment of the tangible/intangible issue is far from the most robust reasoning you will ever read, this suggests that in certain circumstances exhaustion of rights in “used” digital content may be possible.  (If resale of software is an issue of particular interest to you, please read my colleague Martin Sloan’s in-depth summary of the judgement and his key points.)

Similarly, there is forthcoming litigation in the US regarding the legality of reselling of “used” digital songs. Capitol Records is suing ReDigi, a Massachusetts start-up which runs an online marketplace where individulas can resell music files. The legality of ReDigi’s business model will probably turn on whether it is making a copy of the song when it moves the “used” files it to its cloud servers. Capitol has insisted in its filing that copies are being made, claiming: 

While ReDigi touts its service as the equivalent of a used record store, that analogy is inapplicable: used record stores do not make copies to fill up their shelves”

As discussed above, making copies of copies isn’t protected by the first-sale doctrine, so ReDigi will have to prove that only a single copy of a song is being used throughout its entire sales process (as well as finding its own way around the tangible/intangible goods issue).

Hudson Hawk
In the meantime, I appreciate you may have been lured to this blog post on the promise of Bruce Willis, and been subjected to law instead.  So, in a wonderful scene from the unfairly maligned Hudson Hawk, let’s round things off by enjoying Swinging on a Star.

Last opportunity to take part in our survey on how organisations identify, value and exploit their intellectual assets

Our survey on how organisations value and protect their intellectual assets closes at the end of this week.

Launched in conjunction with industry bodies ADS, SCDI and ScotlandIS, our survey is looking to identify how key intellectual property (IP) assets are dealt with and the IP issues which matter most to businesses today. We want to hear your views and appreciate your participation.

Year on year investment in the UK in intangible assets such as IP is higher than investment in traditional physical assets such as machinery or premises. IP rights, whether to a brand, design or manufacturing process, are often the most valuable asset that a business owns.

For any business to maintain a competitive advantage in the marketplace and maximise the return on investment, IP rights require to be properly managed or they will simply go to waste. Are you confident that you are making the most of your IP?

Please click here to take part (anonymously) in our 60-second survey and let us know what matters most to you in intellectual property. The survey will close at 5pm on Friday 24 August.

We look forward to sharing the results with you.

We’re keen to canvass views from as many organisations as possible. If you’d like to share the survey with your contacts then please feel free to use this shortened URL: http://brodi.es/IP_survey.

Free guide to protecting your intellectual property

Link to Brodies guide to protecting IP

Are you interested in finding out more about the  intellectual property that you or your organisation creates or usses in your business? Would you like to learn about the steps you can take to protect your intellectual efforts and prevent others from copying your work?

Often intellectual property rights (IP), whether in a brand name, design or manufacturing process, form a key part of the value of a business and its ability to stand out from the crowd and effectively compete.

To be able to optimise the value of IP and be best placed to generate a maximum return from it, it is important that a business takes active ongoing steps to identify, protect, exploit and enforce such rights. Over many years our IP specialists have worked with local and international businesses of all shapes and sizes to ensure that their IP is being fully protected.

Based on that direct experience we have compiled a brief overview guide to protecting your IP which we would like to share with you.

The guide is free to download. You can access the guide by following this link.

You can also share the guide using the shortened link http://brodi.es/GuideToIP.

We hope you find it useful.

To find out more about our expertise and the services that we offer here at Brodies you have any questions then please contact me or another member of Brodies’ IP and technology team.

Finally, remember that you can also take part in our anonymous survey on how organisations use and value their intellectual assets. We’re keen to hear what you think. To take part, follow this link.

e-update on ECJ decision confirming the right to resell used software licences

We have this morning issued an e-update to clients and contacts on a recent European Court of Justice (ECJ) decision on the rights of licensees to resell licences for downloaded software. The e-update is based on my recent blog.

The case
The case involved the US software giant Oracle, and a German company, Usedsoft. Oracle tried to argue that the exhaustion principle under the European software directive did not apply to downloaded software. The exhaustion principle states that once a rights holder has sold something to another party in the EU, he can no longer how it is distributed (so, for example, Levi’s cannot stop Tesco from selling Levi’s jeans in its stores, if Tesco purchased those jeans from a distributor within the EU).

The ECJ rejected this position, holding that the principle applied regardless of whether software is sold on CD/DVD, or downloaded from the internet.

The decision is good news for organisations that use software, improving competition and creating an alternative market (outside the authorised reseller network) for organisations to buy and sell software licences.

The ruling doesn’t apply to all software licences and there are some rules that you need to be aware of before you start trading your licences. The e-update summarises the key issues to be aware of in relation to the judgment and also highlights some potential opportunities for organisations to look again at the way they value their software licences, which may help to improve their balance sheet.

Read the e-update
You can read the e-update by following this link.

How does your organisation currently value its software licence portfolio? We’d love to hear from you in our anonymous online survey on how organisations value and exploit their intellectual assets. Click here to tell us what you think.

If you would like to register to receive future e-updates from Brodies, please follow this link.

Sharing your user generated content from the Olympics – what can and can’t you do?

Are you going to the Olympics this year?

Then before you get your camera/smartphone out you should have a quick read of LOCOG‘s terms and conditions.

For those that don’t want to read the terms and conditions in full, I have set out a commentary (not a critque) on the key terms below.

Can I share my photos and video clips from the Games on social media websites?
The terms and conditions of purchase prevent spectators contain fairly restrictive conditions on what spectators may do with photos, videos and sound recordings that they take whilst attending the Games:

Images, video and sound recordings of the Games taken by a Ticket Holder cannot be used for any purpose other than for private and domestic purposes and a Ticket Holder may not license, broadcast or publish video and/or sound recordings, including on social networking websites and the internet more generally, and may not exploit images, video and/or sound recordings for commercial purposes under any circumstances, whether on the internet or otherwise, or make them available to third parties for commercial purposes.

Note in particular the prohibition on commercial exploitation (understandable, given that extensive commercial broadcasting and photography arrangements are already in place) and sharing content on social networking websites “and the internet more generally.”

“Games” means the London 2012 Olympics and London 2012 Paralympics. This will clearly include footage of the actual sporting events and stadiums, but does it go further? Given that these restrictions form part of the ticketing terms and conditions I think they can only apply to media created by spectators within the ticketed areas – so inside Olympic Park and the other venues.

So if you want to take a photo of the stadium using Instagram (to pretend that you are actually at the 1968 games in Mexico City), tag some friends in a video of an event at the North Greenwich Arena on Facebook, or even simply tweet a photo of the view of Olympic Park from the top of The Orbit, then tough.

If you share a photo of the Olympic stadium taken from outside the perimeter of Olympic Park, or the Olympic Rings hanging from Tower Bridge, then you are presumably ok.

But there are millions of spectators. Will LOCOG actually enforce this?
Whether and how LOCOG will actually enforce this restriction remains to be seen. With millions of spectators attending events, it’s hard to see how it can monitor uploads to all the social media networks, never mind ensure that non-compliant content is taken down.

And what about athletes and support staff? They won’t be subject to the terms and conditions of purchase. Have they had to accept similar restrictions on their use of social media?

The conundrum for LOCOG is the difficulty in balancing the legitimate interests of it commercial rightsholders (both broadcasters and sponsors) and inoffensive personal use of social media networks by millions of spectators.

Legally, these terms might protect those commercial rights, but whether they will work in practice is another question.

So can I share content on the London 2012 website?
Perhaps confusingly, LOCOG does appear to invite spectators to share content on its own website. But, again, you might want to check the terms of use before you do this.

As you might expect, by uploading content onto the London 2012 website you grant LOCOG a fairly wide licence to exploit and reproduce your user generated content (UGC). That licence is, on the face of it, non-exclusive, so in theory you could also grant a similar licence to other entities and (provided that you are not breaching the spectator terms and conditions mentioned above) share it on other social media websites, or offer it for commercial licensing through, say, Flickr and Getty Images.

But there is a sting in the tail. Firstly, you waive your moral rights (so have no right to be acknowledged as the creator of the UGC). Secondly, the licence is perpetual, so once uploaded it is unlikely that you can bring it to an end by, say, removing your UGC from the website. And thirdly:

…you grant us an option (“Option”) to acquire the exclusive rights to utilise such UGC in all media by way of an assignment by you to us…(“Assignment”), which Option we may exercise on giving you notice by email within 90 days from the date on which you upload the UGC, and you agree that: (A) during that 90-day period and for 30 days thereafter, you will not utilise or authorise anyone else to utilise such UGC in any commercial medium or in any public, non-commercial medium without our prior written consent; (B) within 30 days following our giving such notice, you and we shall negotiate (both acting in good faith and reasonably) on an exclusive basis a sum to be paid to you in consideration of the Assignment (“Option Sum”); (C) if the Option Sum is not agreed within such 30-day period, we shall thereafter have a right of last refusal, under which (1) you will give us written notice by email setting out the proposed terms of any bona fide third-party offer…and we shall have a 30-day period in which to acquire the same on the same terms and (3) if we decline, you may only enter into such third-party agreement subject in all applicable respects to our and our licensors’ proprietary rights and then on the exact terms offered; and (D) in the event that the Option Sum is agreed, you shall promptly following our request sign a written confirmation of the Assignment…

what does this mean in plain english?
What this means is that LOCOG has the right to acquire ownership of your UGC, should it so wish. If it gives you notice that it wishes to do this then you will have to remove the UGC from any other social media website for a period of 120 days, whilst you agree a fee for the assignment. If you don’t agree a fee then LOCOG has the right to match any fee agreed with any third party. However, the value to any third party agency may be diminished by the extensive (and perpetual) rights already granted to LOCOG when uploading the UGC to the London 2012 website.

In short, this clause appears to be another way of limiting the ability of third parties to commercially exploit Olympics related content.

So, if you take a fantastic photo of the Olympics atmosphere that you think could become an iconic image, then think carefully before sharing it on the London 2012 website.

As the terms and conditions say:

IF YOU DO NOT WANT TO GRANT THE RIGHTS SET OUT ABOVE, PLEASE DO NOT UPLOAD YOUR UGC TO THE SITE

You have been warned!

PS do you accept user generated content on your website? How do you deal with the IP issues? Let us know by taking part in our survey on how organisations value and exploit their intellectual assets.

Is ACTA dead in the water?

The European Parliament has delivered a resounding veto to the Anti Counterfeiting Trade Agreement (ACTA).

In my previous blog on ACTA, I wrote about the widespread opposition to ACTA on the grounds that it contains:

…vaguely worded provisions which could potentially allow internet service providers to monitor and disconnect repeat infringers and that it makes available unfair statutory damages for online music infringement to rights holders.

It could also have:

…given customs officers much greater powers to search and seize goods which are suspected of infringing intellectual property to prevent them from crossing national borders.

It will come as no surprise therefore that the European Parliament voted against ratifying ACTA on 4th July. The margin by which it was rejected, 478 votes to 39 (with 165 abstentions), is indicative of the unpopularity of this agreement.

What does the rejection mean?
It now means that none of the EU Member States can join ACTA.  In truth, the veto will have little impact for the internal laws of many member states (particularly in Scotland and the rest of the UK) because most of the proposals set out in ACTA are already present in domestic and European law. 

However, the rejection has more significance in terms of international enforcement and co-operation.  ACTA aimed to allow greater cross border protection against intellectual property infringement and it would have allowed rights holders and customs officers enhanced powers in countries where those powers did not already exist.

Where now for ACTA?
The rejection of ACTA will be celebrated by its opponents, such as supporters of open rights groups but is this really the end for ACTA? Perhaps not.

Prior to the European Parliament’s vote, the Court of Justice of the European Union had been asked to rule on ACTA’s compatibility with European law.  That decision will still be issued (irrespective of the European Parliament’s veto) and the EU Trade Commissioner will then discuss with the other international sponsors of the Agreement how ACTA wil be taken forward, if at all.

ACTA could also still come into force in its current form in other sponsor countries if six members of the agreement ratify it. However, without the approval of the EU (and potentially the US) its impact will be much less forceful.

Nevertheless, this is likely be the end of the road for ACTA in its present form (certainly in the EU) as it would require wholesale modification before being re-submitted to the European Parliament. 

Given the opposition to ACTA so far, perhaps it would be better simply to acknowledge the widespread unpopularity of the Agreement and consider alternative means of trans-national intellectual property enforcement.

Mark Cruickshank

Reselling “used” software licences – what does the Oracle decision allow you to do?

Last week, the European Court of Justice (ECJ) published its decision in a long-running German case between a company called UsedSoft and the US software giant Oracle.

The case hit the headlines because the ECJ held that a software company such as Oracle could not stop a licensee from reselling his “used” licences for software distributed by means of a download from a website.

If you have already read a summary of the decision, or aren’t interested in the background facts, then skip down to the key points below.

The background
Under the directive on the legal protection of computer programs, the licensor of a computer program loses his right to control onward distribution of a copy of that program when that copy is first sold in the EU. This is known as the principle of exhaustion.

So, if I go to PC World and buy a copy of a Microsoft product on a CD, then Microsoft cannot stop me subsequently selling that copy on to someone else. This has led to a bouyant market for, amongst other things, second hand computer games, where national retailers sell second hand games alongside “new” games.

UsedSoft’s business provided a means of users selling unused licences for Oracle software.

Under the licence granted by Oracle for its client server software, licensees download the computer prgram from the Oracle website. The user is then licensed to store that program permanently on a server and allow up to 25 users to access it, downloading it onto their workstations.

Oracle argued that UsedSoft’s business breached the terms of its licence, as the licence contractually restricts the licensee from transferring its rights to a third party, and that the provisions in the EU software directive did not apply to downloads.

The ECJ’s decision
The ECJ disagreed with Oracle’s argument, holding that the principle of exhaustion applies regardless of the means by which software is distributed.

In other words, the licensor of a computer program (whether on CD or a download) cannot stop a user in the EU from “selling” on his licenced copy to a third party, and any licence term purporting to vary that right is invalid.

The principle behind the decision is good news for those that buy computer programs online (pretty much anyone these days). Remember – this applies not just to enterprise software like Oracle, but also to games, consumer software and mobile apps.

Key points to note
There are some key points to note from this decision:

  • The decision only applies to software that is licensed on a perpetual basis – this point appears to have been overlooked in many commentaries. In other words it applies only to licences that are not limited in duration. So this decision does not apply to any software that is, say, subject to renewal by payment of an annual licence fee.
  • This means that many organisations’ Microsoft licences may fall outside its scope – for example, where those products are licensed under Microsoft’s Software Assurance model, as the licence under SA only becomes a perpetual licence at the end of the SA contract and upon satisfaction of certain conditions.
  • The principle established by the court applies to the copy of the program “as corrected and updated”. So the copy that may be transferred is the version as updated under any maintenance agreement, even if that agreement has now expired.
  • The principle does not extend so as to allow a licence for multiple users to be subdivide a licence (such as the block of 25 licences sold by Oracle) and resell only part of it, but depending on how the licence is structured you may be able to sell a number of seats where the software is licensed on a per seat basis.
  • Once you have sold your licence for a downloaded program to a third party, you have to delete it from your device and stop using it. This should go without saying (and applies equally to software that has been installed from a CD that is subsequently resold), but it’s worth re-emphasing the point. It may be easier said than done. How will software companies manage the risk that licensees just skip this step and sell on the licence regardless?
  • This decision has no impact on applications provided on a SaaS or cloud basis, even where the user has locked into that cloud vendor's service for a fixed period of time.

Will software companies change their licensing/distribution models?
The move to providing software through website downloads allowed vendors to try and avoid some of the legal issues associated with distributing a copy of their software in a tangible form, such as a CD or DVD. Restricting the ability of users to sell on licences for downloaded software has provided vendors with another revenue stream.

With this ruling, it will be interesting to see whether software vendors once again restructure their distribution models to try and regain control over the rights of users to dispose of surplus licences.

For that reason, I wouldn’t be surprised if perpetual licences for enterprise software become a thing of the past for some vendors, with a move towards combined licence and maintenance agreements that are subject to ongoing payments.

Will the decision affect the price of software?
It will also be interesting to see what impact this has on the price of both “new” and “second-hand” licences.

I remember attending a talk a few years ago by the chief economist at the PRS, who highlighted the impact that Amazon’s marketplace had on the price of new CDs on Amazon, as the (cheaper) price of the second-hand CD was displayed alongside the cost of buying the CD new. From a user’s perspective, there is no degradation in quality, so why buy the more expensive “new” copy? Conversely, the cost of the new CD included the artist’s royalties, production costs and other commissions for the record label, which did not need to be factored into the cost charged by the seller of a second-hand CD.

Could similar economics impact upon the cost of software?


Twitter: @BrodiesTechBlog feed

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