Seattle Intellectual Property Inn of Court

Timothy S. Vernor v. Autodesk, Inc.

The Future, or Demise, of the First Sale Doctrine and Essential Step

Defense in Copyright

Facts and Procedural History

The “First Sale Doctrine” of 17 U.S.C. § 109(a):

“[T]he owner of a particular copy . . . lawfully made under this title, or any person authorized by such owner, is entitled without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy . . .”

The “Essential Step” Defense of 17 U.S.C. § 117(a)

“[I]t is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided:

(1) That such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner . . . .”

Summary Judgment Granted for Vernor by USDC, WD WAWhen a license agreement that (1) provides for a one-time payment and (2) does not require that copies be returned to the copyright holder, the licensee becomes an “owner” of the copy, despite severe use restrictions:

“[T]he court cannot characterize Autodesk’s decision to let its licensees retain possession of the software forever as something other than a transfer of ownership, despite numerous restrictions on that ownership.”

The Ninth Circuit Reversed the District Court:

“We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions.”

Vernor Petitioned for Certiorari“Whether the Ninth Circuit correctly held that the owner of a copyright in a work, by granting a limited license, can withhold ownership of particular copies of that work and thus deprive the public of:

(1) The right to ‘sell or otherwise dispose’ of those copies under § 109(a) [the ‘First Sale Doctrine’] and

(2) As to computer programs, the right to make additional copies that are essential steps in the program’s use under § 117(a) [the ‘Essential Step’ defense]?”

SUPREME COURT OF THE UNITED STATES

Oral Argument: Vernor v. Autodesk

Sitting by Designation, Justices Mike Atkins, Douglas Grady, and Randy Moeller

For Petitioner, Vernor: For Respondent, Autodesk:Mark Walters Parker Folse

For the Amici:Brian Bodine