Resale of Software-Enabled Products

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Unlike other products such as assets like land and vehicles, software-enabled products have restrictions especially at the point of resale. Software-enabled products are linked to copyright law which raises the issue during the transfer of ownership. The issue under contention by most consumers is section 109 where first sale doctrine allows the resale of software when the product itself is resold. The owner of a particular copy is the only one subjected to the right of the first resale.

According to the current law, the owner of a car does not have a right to own the software embedded in the vehicle to exercise the first sale right. The Copyrights Office did not find adequate evidence to substantiate the claims made by commenters concerning the prevalence of licensing terms that restricted the ability for consumers to transfer or resell copies of software. The Department of Commerce Internet Policy Task Force made a similar conclusion on the matter. The commenters also filed claims that the manufacturers of software-enabled products in attempts to eliminate the secondary market of their products could introduce restrictions on resale on their software licensing agreements. If that is the case in the future, then the Copyright Office will consider many legislative actions. In that case, YODA may be considered as per the commenters prior requests. Based on the details mentioned above the Copyright Office did not see the need for legislative action on the issue of resale due to lack of adequate evidence. This conclusion was also in alignment with the Internet Policy Force.

IV.B related to Repair and Tinkering.

The study furthermore noted the negative impact of copyright law on the consumer ability to repair or tinker the associated products. The issue arose since there were individuals who modify the products for own benefits, those who share insights based on a non-commercial basis, and those individuals who are involved in the business of repairing embedded software-enabled products. As discussed in the article the process of repair and tinkering incriminate four exclusive rights set forth under section 106 of the Copyright Act.

Most commenters do support the fact that restrictive license restricts consumers from repairing or tinkering software-enabled products. This law needs to be interpreted appropriately to relief all activities associated with repair and tinkering as proposed by the Copyright Office. The Copyright Office did not wish to recommend any amendments whatsoever on that matter.

Some commenters pointed the fact that specified license agreements restrict owners to repair or refurbish their product. But when the repair is legalized as a matter of fair use, then users can do so without any fear of copyright violation. Copyright owners may also be discouraged by market forces to restrict independent repair activities. Considering the rate of technological advancement such exceptions may soon be obsolete.

December 12, 2023


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