%PDF-1.3 %%íýþê %%Page: 1 1 4 0 obj << /Length 5 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 664.5 Tm /F1 13 Tf 100 Tz 88.1395 -8.4 Td 1.3 Tw 0 Tc (FOR PUBLICATION) Tj /F1 15 Tf 100 Tz -78.2395 -24 Td 1.5 Tw (UNITED STATES COURT OF APPEALS) Tj 43.47 -16 Td (FOR THE NINTH CIRCUIT) Tj /F2 12 Tf 100 Tz -53.37 -18 Td 1.2 Tw () Tj 0 Tw ( ) Tj 1.2 Tw 0 0 Td 183.8 0 Td /F3 20 Tf 100 Tz -2.18 -17.6 Td 2 Tw (ü) Tj /F2 12 Tf 100 Tz -181.62 -2.8 Td 1.2 Tw (T) Tj /F2 8.4 Tf 101.1 Tz .79 Tw (IMOTHY) Tj /F2 12 Tf 100 Tz 0 Ts 1.2 Tw ( S. V) Tj /F2 8.4 Tf 101.1 Tz .79 Tw (ERNOR) Tj /F2 12 Tf 100 Tz 0 Ts 1.2 Tw (,) Tj 215.07 -6.6 Td (No. 09-35969) Tj /F4 12 Tf 100 Tz -129.402 -6.6 Td (Plaintiff-Appellee,) Tj /F2 12 Tf 100 Tz 141.066 -11.4 Td (D.C. No.) Tj -144.234 -6.6 Td (v.) Tj /F3 20 Tf 100 Tz 99.12 -1.3 Td 2 Tw (ý) Tj /F2 12 Tf 100 Tz 19.386 -5.3 Td 1.2 Tw (2:07-cv-01189-RAJ) Tj -201.006 -11.4 Td (A) Tj /F2 8.4 Tf 101.1 Tz .79 Tw (UTODESK) Tj /F2 12 Tf 100 Tz 0 Ts 1.2 Tw (, I) Tj /F2 8.4 Tf 101.1 Tz .79 Tw (NC) Tj /F2 12 Tf 100 Tz 0 Ts 1.2 Tw (.,) Tj 224.34 -6.6 Td (OPINION) Tj /F4 12 Tf 100 Tz -153.996 -6.6 Td (Defendant-Appellant.) Tj /F3 20 Tf 100 Tz 111.276 -8.8 Td 1.6 Ts 2 Tw (þ) Tj 0 Ts /F2 12 Tf 100 Tz -142.878 -26.2 Td 1.2 Tw (Appeal from the United States District Court) Tj 14.442 -13.2 Td (for the Western District of Washington) Tj -9.51 -13.2 Td (Richard A. Jones, District Judge, Presiding) Tj 50.796 -26.2 Td (Argued and Submitted) Tj -31.098 -13.2 Td (June 7, 2010ÐSeattle, Washington) Tj 22.83 -26.2 Td (Filed September 10, 2010) Tj -77.16 -26.2 Td (Before: William) Tj 0 Tw ( ) Tj 1.2 Tw (C.) Tj 0 Tw ( ) Tj 1.2 Tw (Canby,) Tj 0 Tw ( ) Tj 1.2 Tw (Jr., Consuelo) Tj 0 Tw ( ) Tj 1.2 Tw (M.) Tj 0 Tw ( ) Tj 1.2 Tw (Callahan and) Tj 63.93 -13.2 Td (Sandra) Tj 0 Tw ( ) Tj 1.2 Tw (S.) Tj 0 Tw ( ) Tj 1.2 Tw (Ikuta, Circuit Judges.) Tj 9.732 -26.2 Td (Opinion by Judge Callahan) Tj ET Q q 1 0 0 1 156 664.5 cm 0 G .9 w 0 -65.95 m 183.8 -65.95 l s 1.2 w 186.6 -103.7 m 186.6 -73.8 l s 1.2 w 186.6 -150.6 m 186.6 -120.7 l s .9 w 0 -157.55 m 183.3 -157.55 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 292.25 -664.5 Td 1.1 Tw 0 Tc (13861) Tj ET Q endstream endobj 5 0 obj 2266 endobj 3 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 10 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F3 8 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 4 0 R >> endobj %%Page: 2 2 12 0 obj << /Length 13 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F1 12 Tf 100 Tz 120.996 -131.2 Td 1.2 Tw 0 Tc (COUNSEL) Tj /F2 12 Tf 100 Tz -120.996 -26.2 Td .6 Tw (Jerome B. Falk \(argued\), Clara J. Shin, and Blake J. Lawit of) Tj 0 -13.2 Td 1.7 Tw (Howard Rice Nemerovski Canady Falk & Rabkin P.C., and) Tj 0 -13.2 Td .33 Tw (Michael A. Jacobs and George C. Harris of Morrison & Foer-) Tj 0 -13.2 Td 1.2 Tw (ster LLP, for defendant-appellant Autodesk, Inc. ) Tj 0 -26.2 Td 1.93 Tw (Gregory A. Beck \(argued\) and Deepak Gupta of the Public) Tj 0 -13.2 Td 3.1 Tw (Citizen Litigation Group, for plaintiff-appellee Timothy S.) Tj 0 -13.2 Td 1.2 Tw (Vernor. ) Tj 0 -26.2 Td .87 Tw (Randi W. Singer, Mark J. Fiore, and Lisa R. Eskow of Weil,) Tj 0 -13.2 Td 1.2 Tw (Gotshal & Manges LLP, for amicus curiae eBay Inc.) Tj 0 -26.2 Td .66 Tw (Fred von Lohmann of the Electronic Frontier Foundation and) Tj 0 -13.2 Td 1.71 Tw (Sherwin Siy and John Bergmayer of Public Knowledge, for) Tj 0 -13.2 Td 1.5 Tw (amicus curiae American Library Association, Association of) Tj 0 -13.2 Td 4.4 Tw (College and Research Libraries, Association of Research) Tj 0 -13.2 Td .78 Tw (Libraries, Consumer Federation of America, Electronic Fron-) Tj 0 -13.2 Td 1.2 Tw (tier Foundation, Public Knowledge, and U.S. PIRG.) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -111.75 m 300 -111.75 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13864) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 13 0 obj 1835 endobj 11 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 10 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R >> /ProcSet 1 0 R >> /Contents 12 0 R >> endobj %%Page: 3 3 15 0 obj << /Length 16 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td .91 Tw 0 Tc (Scott E. Bain, Keith Kupferschmid, and Mark Bohannon, for) Tj 0 -14.2 Td 1.5 Tw (amicus curiae Software & Information Industry Association.) Tj 0 -28 Td .95 Tw (Robert H. Rotstein, Patricia H. Benson, and J. Matthew Wil-) Tj 0 -14.1 Td .3 Tw (liams of Mitchell Silberberg & Knupp LLP, for amicus curiae) Tj 0 -14.1 Td 1.2 Tw (Motion Picture Association of America, Inc. ) Tj /F1 12 Tf 100 Tz 123.666 -47.4 Td (OPINION) Tj /F2 12 Tf 100 Tz -123.666 -28 Td (CALLAHAN, Circuit Judge:) Tj 12 -27.9 Td 8.21 Tw (Timothy Vernor purchased several used copies of) Tj -12 -14.1 Td 3.23 Tw (Autodesk, Inc.'s AutoCAD Release 14 software \() Tj (ªRelease) Tj 0 -14.1 Td 1.03 Tw (14º\) from one of Autodesk's direct customers, and he resold) Tj 0 -14.1 Td 1.26 Tw (the Release 14 copies on eBay. Vernor brought this declara-) Tj 0 -14.1 Td 1 Tw (tory judgment action against Autodesk to establish that these) Tj 0 -14.1 Td 3.14 Tw (resales did not infringe Autodesk's copyright. The district) Tj 0 -14.1 Td .95 Tw (court issued the requested declaratory judgment, holding that) Tj 0 -14.1 Td 1.52 Tw (Vernor's sales were lawful because of two of the Copyright) Tj 0 -14.1 Td 1.44 Tw (Act's affirmative defenses that apply to owners of copies of) Tj 0 -14.1 Td 2.62 Tw (copyrighted works, the first sale doctrine and the essential) Tj 0 -14.1 Td 1.2 Tw (step defense. ) Tj 12 -27.9 Td 4.51 Tw (Autodesk distributes Release 14 pursuant to a limited) Tj -12 -14.1 Td 2.33 Tw (license agreement in which it reserves title to the software) Tj 0 -14.1 Td .33 Tw (copies and imposes significant use and transfer restrictions on) Tj 0 -14.1 Td .38 Tw (its customers. We determine that Autodesk's direct customers) Tj 0 -14.1 Td 1 Tw (are licensees of their copies of the software rather than own-) Tj 0 -14.1 Td .18 Tw (ers, which has two ramifications. Because Vernor did not pur-) Tj 0 -14.1 Td 3.37 Tw (chase the Release 14 copies from an owner, he may not) Tj 0 -14.1 Td 1.51 Tw (invoke the first sale doctrine, and he also may not assert an) Tj 0 -14.1 Td 1.85 Tw (essential step defense on behalf of his customers. For these) Tj 0 -14.1 Td .36 Tw (reasons, we vacate the district court's grant of summary judg-) Tj 0 -14.1 Td 1.2 Tw (ment to Vernor and remand for further proceedings.) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -105.35 m 300 -105.35 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13865) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 16 0 obj 2958 endobj 14 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 10 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R >> /ProcSet 1 0 R >> /Contents 15 0 R >> endobj %%Page: 4 4 18 0 obj << /Length 19 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F1 12 Tf 100 Tz 146.166 -8.4 Td 1.2 Tw 0 Tc (I.) Tj -146.166 -26 Td (A.) Tj 9 Tw ( ) Tj 1.2 Tw (Autodesk's Release 14 software and licensing ) Tj 23.6 -13 Td (practices) Tj /F2 12 Tf 100 Tz -11.6 -26 Td 3.71 Tw (The material facts are not in dispute. Autodesk makes) Tj -12 -13 Td .33 Tw (computer-aided design software used by architects, engineers,) Tj 0 -13.1 Td 1.41 Tw (and manufacturers. It has more than nine million customers.) Tj 0 -13.1 Td .5 Tw (It first released its AutoCAD software in 1982. It holds regis-) Tj 0 -13.1 Td 1.22 Tw (tered copyrights in all versions of the software including the) Tj 0 -13.1 Td .06 Tw (discontinued Release 14 version, which is at issue in this case.) Tj 0 -13.1 Td 1.2 Tw (It provided Release 14 to customers on CD-ROMs. ) Tj 12 -26 Td .14 Tw (Since at least 1986, Autodesk has offered AutoCAD to cus-) Tj -12 -13.1 Td 1.38 Tw (tomers pursuant to an accompanying software license agree-) Tj 0 -13.1 Td .47 Tw (ment \() Tj (ªSLA) Tj (º\), which customers must accept before installing) Tj 0 -13.1 Td 1.57 Tw (the software. A customer who does not accept the SLA can) Tj 0 -13.1 Td 1.85 Tw (return the software for a full refund. ) Tj (Autodesk offers SLAs) Tj 0 -13.1 Td 2 Tw (with different terms for commercial, educational institution,) Tj 0 -13.1 Td .7 Tw (and student users. The commercial license, which is the most) Tj 0 -13.1 Td .12 Tw (expensive, imposes the fewest restrictions on users and allows) Tj 0 -13.1 Td 1.2 Tw (them software upgrades at discounted prices. ) Tj 12 -26 Td 1.07 Tw (The SLA for Release 14 first recites that Autodesk retains) Tj -12 -13.1 Td 2.14 Tw (title to all copies. Second, it states that the customer has a) Tj 0 -13.1 Td 1.81 Tw (nonexclusive and nontransferable license to use Release 14.) Tj 0 -13.1 Td 1.88 Tw (Third, it imposes transfer restrictions, prohibiting customers) Tj 0 -13.1 Td 3.28 Tw (from renting, leasing, or transferring the software without) Tj 0 -13.1 Td 2.61 Tw (Autodesk's prior consent and from electronically or physi-) Tj 0 -13.1 Td 3.75 Tw (cally transferring the software out of the Western Hemi-) Tj 0 -13.1 Td 1.2 Tw (sphere. ) Tj (Fourth, it imposes significant use restrictions:) Tj 22 -26.1 Td 3.66 Tw (YOU MAY NOT: \(1\) modify, translate, reverse-) Tj 0 -13.1 Td 3.54 Tw (engineer, decompile, or disassemble the Software) Tj 0 -13.1 Td 2.36 Tw (. . . \(3\) remove any proprietary notices, labels, or) Tj 0 -13.1 Td 1 Tw (marks from the Software or Documentation; \(4\) use) Tj 0 -13.1 Td .14 Tw (. . . the Software outside of the Western Hemisphere;) Tj 0 -13.1 Td 5.9 Tw (\(5\) utilize any computer software or hardware) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13866) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 19 0 obj 3215 endobj 17 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 10 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R >> /ProcSet 1 0 R >> /Contents 18 0 R >> endobj %%Page: 5 5 21 0 obj << /Length 22 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 22 -8.4 Td 4.34 Tw 0 Tc (designed to defeat any hardware copy-protection) Tj 0 -13.7 Td 3.04 Tw (device, should the software you have licensed be) Tj 0 -13.7 Td 1.75 Tw (equipped with such protection; or \(6\) use the Soft-) Tj 0 -13.7 Td 3.94 Tw (ware for commercial or other revenue-generating) Tj 0 -13.7 Td .16 Tw (purposes if the Software has been licensed or labeled) Tj 0 -13.7 Td 1.2 Tw (for educational use only.) Tj -22 -27.1 Td 2.58 Tw (Fifth, the SLA provides for license termination if the user) Tj 0 -13.7 Td .75 Tw (copies the software without authorization or does not comply) Tj 0 -13.7 Td .92 Tw (with the SLA's restrictions. Finally, the SLA provides that if) Tj 0 -13.7 Td 1.2 Tw (the software is an upgrade of a previous version:) Tj 22 -27.1 Td .78 Tw ([Y]ou must destroy the software previously licensed) Tj 0 -13.7 Td 1.87 Tw (to you, including any copies resident on your hard) Tj 0 -13.7 Td .54 Tw (disk drive . . . within sixty \(60\) days of the purchase) Tj 0 -13.7 Td 2.44 Tw (of the license to use the upgrade or update . . . .) Tj 0 -13.6 Td 1.66 Tw (Autodesk reserves the right to require you to show) Tj 0 -13.6 Td 2.42 Tw (satisfactory proof that previous copies of the soft-) Tj 0 -13.6 Td 1.2 Tw (ware have been destroyed.) Tj -10 -27.1 Td 1.48 Tw (Autodesk takes measures to enforce these license require-) Tj -12 -13.6 Td 1.43 Tw (ments. It assigns a serial number to each copy of AutoCAD) Tj 0 -13.6 Td .96 Tw (and tracks registered licensees. ) Tj (It requires customers to input) Tj 0 -13.6 Td .75 Tw (ªactivation codes) Tj (º within one month after installation to con-) Tj 0 -13.6 Td 1.55 Tw (tinue using the software.) Tj 4.9 Ts /F5 6 Tf 100 Tz (1) Tj 0 Ts /F2 12 Tf 100 Tz ( ) Tj (The customer obtains the code by) Tj 0 -13.6 Td .75 Tw (providing the product's serial number to Autodesk. Autodesk) Tj 0 -13.6 Td .03 Tw (issues the activation code after confirming that the serial num-) Tj 0 -13.6 Td 1.09 Tw (ber is authentic, the copy is not registered to a different cus-) Tj 0 -13.6 Td 4.55 Tw (tomer, and the product has not been upgraded. ) Tj (Once a) Tj 0 -13.6 Td .69 Tw (customer has an activation code, he or she may use it to acti-) Tj 0 -13.6 Td 1.75 Tw (vate the software on additional computers without notifying) Tj 0 -13.6 Td 1.2 Tw (Autodesk. ) Tj /F2 10 Tf 100 Tz 10 -26.7 Td 4.1 Ts /F5 6 Tf 100 Tz .92 Tw (1) Tj 0 Ts /F2 10 Tf 100 Tz (Prior to using activation codes, Autodesk required users to return one) Tj -10 -11.5 Td 1.66 Tw (disc of an earlier version of the software to upgrade to a later version.) Tj 0 -11.5 Td .69 Tw (Autodesk has abandoned this return policy, deeming it slow and unwork-) Tj 0 -11.5 Td 1 Tw (able. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -442.85 m 300 -442.85 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13867) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 22 0 obj 3386 endobj 20 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 10 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 21 0 R >> endobj %%Page: 6 6 25 0 obj << /Length 26 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F1 12 Tf 100 Tz 0 -8.4 Td 1.2 Tw 0 Tc (B.) Tj 9 Tw ( ) Tj 1.2 Tw (Autodesk's provision of Release 14 software to CTA) Tj /F2 12 Tf 100 Tz 12 -26.3 Td 1.52 Tw (In March 1999, Autodesk reached a settlement agreement) Tj -12 -13.3 Td 6.21 Tw (with its customer Cardwell/Thomas & Associates, Inc.) Tj 0 -13.3 Td .12 Tw (\(ªCTAº\), which Autodesk had accused of unauthorized use of) Tj 0 -13.3 Td .92 Tw (its software. As part of the settlement, Autodesk licensed ten) Tj 0 -13.3 Td .51 Tw (copies of Release 14 to CTA. ) Tj (CTA agreed to the SLA, which) Tj 0 -13.3 Td 1 Tw (appeared \(1\) on each Release 14 package that Autodesk pro-) Tj 0 -13.2 Td 1.87 Tw (vided to CTA; \(2\) in the settlement agreement; and \(3\) on-) Tj 0 -13.2 Td 1.2 Tw (screen, while the software is being installed.) Tj 12 -26.2 Td 1.55 Tw (CTA later upgraded to the newer, fifteenth version of the) Tj -12 -13.2 Td .08 Tw (AutoCAD program, AutoCAD 2000. It paid $495 per upgrade) Tj 0 -13.2 Td 1.48 Tw (license, compared to $3,750 for each new license. ) Tj (The SLA) Tj 0 -13.2 Td 2.33 Tw (for AutoCAD 2000, like the SLA for Release 14, required) Tj 0 -13.2 Td 2.71 Tw (destruction of copies of previous versions of the software,) Tj 0 -13.2 Td .85 Tw (with proof to be furnished to Autodesk on request. However,) Tj 0 -13.2 Td 1.25 Tw (rather than destroying its Release 14 copies, CTA sold them) Tj 0 -13.2 Td 2.47 Tw (to Vernor at an office sale with the handwritten activation) Tj 0 -13.2 Td 1.2 Tw (codes necessary to use the software.) Tj 4.9 Ts /F5 6 Tf 100 Tz .5 Tw (2) Tj 0 Ts /F2 12 Tf 100 Tz 1.2 Tw ( ) Tj /F1 12 Tf 100 Tz 0 -26.2 Td (C.) Tj 9 Tw ( ) Tj 1.2 Tw (Vernor's eBay business and sales of Release 14) Tj /F2 12 Tf 100 Tz 12 -26.2 Td (Vernor has sold more than 10,000 items on eBay. In May) Tj -12 -13.2 Td 1.44 Tw (2005, he purchased an authentic used copy of Release 14 at) Tj 0 -13.2 Td 1.31 Tw (a garage sale from an unspecified seller. ) Tj (He never agreed to) Tj 0 -13.2 Td .11 Tw (the SLA's terms, opened a sealed software packet, or installed) Tj 0 -13.2 Td .97 Tw (the Release 14 software. Though he was aware of the SLA's) Tj 0 -13.2 Td .63 Tw (existence, he believed that he was not bound by its terms. ) Tj (He) Tj 0 -13.2 Td 1.2 Tw (posted the software copy for sale on eBay. ) Tj 12 -26.2 Td 6.76 Tw (Autodesk filed a Digital Millennium Copyright Act) Tj -12 -13.2 Td 2.32 Tw (\(ªDMCAº\) take-down notice with eBay claiming that Ver-) Tj 0 -13.2 Td 1.62 Tw (nor's sale infringed its copyright, and eBay terminated Ver-) Tj /F2 10 Tf 100 Tz 10 -26 Td 4.1 Ts /F5 6 Tf 100 Tz 1.33 Tw (2) Tj 0 Ts /F2 10 Tf 100 Tz (Autodesk brought suit in federal district court against CTA for these) Tj -10 -11.2 Td 1.97 Tw (sales. ) Tj (The parties stipulated to entry of a permanent injunction against) Tj 0 -11.2 Td 1 Tw (CTA from directly or contributorily infringing Autodesk's copyrights. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -455.35 m 300 -455.35 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13868) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 26 0 obj 3569 endobj 24 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 10 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 25 0 R >> endobj %%Page: 7 7 28 0 obj << /Length 29 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.37 Tw 0 Tc (nor's auction.) Tj 4.9 Ts /F5 6 Tf 100 Tz (3) Tj 0 Ts /F2 12 Tf 100 Tz ( Autodesk advised Vernor that it conveyed its) Tj 0 -13.2 Td 3.73 Tw (software copies pursuant to non-transferable licenses, and) Tj 0 -13.2 Td 3.52 Tw (resale of its software was copyright infringement. ) Tj (Vernor) Tj 0 -13.2 Td .66 Tw (filed a DMCA counter-notice with eBay contesting the valid-) Tj 0 -13.2 Td .62 Tw (ity of Autodesk's copyright claim.) Tj 4.9 Ts /F5 6 Tf 100 Tz (4) Tj 0 Ts /F2 12 Tf 100 Tz ( Autodesk did not respond) Tj 0 -13.2 Td .5 Tw (to the counter-notice. ) Tj (eBay reinstated the auction, and Vernor) Tj 0 -13.2 Td 1.2 Tw (sold the software to another eBay user. ) Tj 12 -26.2 Td .3 Tw (In April 2007, Vernor purchased four authentic used copies) Tj -12 -13.2 Td 1.48 Tw (of Release 14 at CTA's office sale. ) Tj (The authorization codes) Tj 0 -13.2 Td .42 Tw (were handwritten on the outside of the box. He listed the four) Tj 0 -13.2 Td 1.75 Tw (copies on eBay sequentially, representing, ) Tj (ªThis software is) Tj 0 -13.2 Td .37 Tw (not currently installed on any computer.) Tj (º) Tj 4.9 Ts /F5 6 Tf 100 Tz (5) Tj 0 Ts /F2 12 Tf 100 Tz ( On each of the first) Tj 0 -13.2 Td 1.67 Tw (three occasions, the same DMCA process ensued. Autodesk) Tj 0 -13.2 Td 5.21 Tw (filed a DMCA take-down notice with eBay, and eBay) Tj 0 -13.2 Td .5 Tw (removed Vernor's auction. ) Tj (Vernor submitted a counter-notice) Tj 0 -13.2 Td 1.47 Tw (to which Autodesk did not respond, and eBay reinstated the) Tj 0 -13.2 Td 1.2 Tw (auction. ) Tj 12 -26.2 Td 2.03 Tw (When Vernor listed his fourth, final copy of Release 14,) Tj /F2 10 Tf 100 Tz -2 -26 Td 4.1 Ts /F5 6 Tf 100 Tz .38 Tw (3) Tj 0 Ts /F2 10 Tf 100 Tz (The DMCA provides that a service provider is not liable for infringing) Tj -10 -11.2 Td .78 Tw (user-posted material on its service if, ) Tj /F4 10 Tf 100 Tz (inter alia) Tj /F2 10 Tf 100 Tz (, it responds expeditiously) Tj 0 -11.2 Td 1.25 Tw (to remove or disable access to the material upon receipt of a take-down) Tj 0 -11.2 Td 1 Tw (notice claiming infringement. 17 U.S.C. §) Tj 0 Tw ( ) Tj 1 Tw (512\(c\)\(1\)\(C\). ) Tj 10 -14 Td 4.1 Ts /F5 6 Tf 100 Tz .12 Tw (4) Tj 0 Ts /F2 10 Tf 100 Tz (The DMCA also provides that a user whose material has been removed) Tj -10 -11.2 Td 1.17 Tw (or disabled may provide a ) Tj (ªcounter-notification) Tj (º to the service provider,) Tj 0 -11.2 Td .97 Tw (including a sworn statement that the user has a good-faith belief that the) Tj 0 -11.2 Td 1.25 Tw (material was mistakenly removed or disabled. 17 U.S.C. §) Tj 0 Tw ( ) Tj 1.25 Tw (512\(g\)\(3\)\(C\).) Tj 0 -11.2 Td 1.85 Tw (After receiving a counter-notification, the service provider must do the) Tj 0 -11.2 Td .1 Tw (following to retain its liability exemption. It must promptly \(1\) provide the) Tj 0 -11.2 Td .18 Tw (person who filed the original take-down notice with a copy of the counter-) Tj 0 -11.2 Td 1.94 Tw (notification and \(2\) advise that it will replace the removed material or) Tj 0 -11.2 Td .17 Tw (cease disabling access to it in ten business days. 17 U.S.C. §) Tj 0 Tw ( ) Tj .17 Tw (512\(g\)\(2\)\(B\).) Tj 0 -11.2 Td .38 Tw (It must also timely replace the removed material or cease disabling access) Tj 0 -11.2 Td 1.4 Tw (to it, unless the person who provided the take-down notice gives notice) Tj 0 -11.2 Td .93 Tw (that he or she has filed a court action to restrain the user's infringement.) Tj 0 -11.2 Td 1 Tw (17 U.S.C. §) Tj 0 Tw ( ) Tj 1 Tw (512\(g\)\(2\)\(C\). ) Tj 10 -14 Td 4.1 Ts /F5 6 Tf 100 Tz 1.05 Tw (5) Tj 0 Ts /F2 10 Tf 100 Tz (Vernor acknowledged at his deposition that he did not know whether) Tj -10 -11.2 Td 1 Tw (this was true. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -270.55 m 300 -270.55 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13869) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 29 0 obj 4450 endobj 27 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 30 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 28 0 R >> endobj %%Page: 8 8 32 0 obj << /Length 33 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.46 Tw 0 Tc (Autodesk again filed a DMCA take-down notice with eBay.) Tj 0 -13 Td 4.38 Tw (This time, eBay suspended Vernor's account because of) Tj 0 -13 Td 3.61 Tw (Autodesk's repeated charges of infringement. ) Tj (Vernor also) Tj 0 -13 Td 1.83 Tw (wrote to Autodesk, claiming that he was entitled to sell his) Tj 0 -13.1 Td 1.03 Tw (Release 14 copies pursuant to the first sale doctrine, because) Tj 0 -13.1 Td 3.37 Tw (he never installed the software or agreed to the SLA. ) Tj (In) Tj 0 -13.1 Td 1.24 Tw (response, Autodesk's counsel directed Vernor to stop selling) Tj 0 -13.1 Td 1.92 Tw (the software. ) Tj (Vernor filed a final counter-notice with eBay.) Tj 0 -13.1 Td 1.83 Tw (When Autodesk again did not respond to Vernor's counter-) Tj 0 -13.1 Td 1.21 Tw (notice, eBay reinstated Vernor's account. ) Tj (At that point, Ver-) Tj 0 -13.1 Td 0 Tw (nor's eBay account had been suspended for one month, during) Tj 0 -13.1 Td 1.2 Tw (which he was unable to earn income on eBay. ) Tj 12 -26 Td 1.83 Tw (Vernor currently has two additional copies of Release 14) Tj -12 -13.1 Td 2.3 Tw (that he wishes to sell on eBay. ) Tj (Although the record is not) Tj 0 -13.1 Td .04 Tw (clear, it appears that Vernor sold two of the software packages) Tj 0 -13.1 Td 1.07 Tw (that he purchased from CTA, for roughly $600 each, but did) Tj 0 -13.1 Td .14 Tw (not sell the final two to avoid risking further suspension of his) Tj 0 -13.1 Td 1.2 Tw (eBay account.) Tj /F1 12 Tf 100 Tz 143.832 -26 Td (II.) Tj /F2 12 Tf 100 Tz -131.832 -26 Td 5.04 Tw (In August 2007, Vernor brought a declaratory action) Tj -12 -13.1 Td .85 Tw (against Autodesk to establish that his resales of used Release) Tj 0 -13.1 Td .51 Tw (14 software are protected by the first sale doctrine and do not) Tj 0 -13.1 Td 1.81 Tw (infringe Autodesk's copyright. He also sought damages and) Tj 0 -13.1 Td 2.21 Tw (injunctive relief. On January 15, 2008, Autodesk moved to) Tj 0 -13.1 Td 0 Tw (dismiss Vernor's complaint, or in the alternative, for summary) Tj 0 -13.1 Td 1.57 Tw (judgment. The district court denied the motion, holding that) Tj 0 -13.1 Td 1.92 Tw (Vernor's sales were non-infringing under the first sale doc-) Tj 0 -13.1 Td 1.41 Tw (trine and the essential step defense. ) Tj /F4 12 Tf 100 Tz (See Vernor v. Autodesk,) Tj 0 -13.1 Td 3.33 Tw (Inc.) Tj /F2 12 Tf 100 Tz (, 555 F. Supp. 2d 1164, 1170-71, 1175 \(W.D. Wash.) Tj 0 -13.1 Td 1.2 Tw (2008\). ) Tj 12 -26 Td 3.5 Tw (Following discovery, the parties filed cross-motions for) Tj -12 -13.1 Td .47 Tw (summary judgment. The district court granted summary judg-) Tj 0 -13.1 Td 2.63 Tw (ment to Vernor as to copyright infringement in an unpub-) Tj 0 -13.1 Td 0 Tw (lished decision. However, the district court declined to resolve) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13870) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 33 0 obj 3361 endobj 31 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 30 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 32 0 R >> endobj %%Page: 9 9 35 0 obj << /Length 36 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 2.04 Tw 0 Tc (Vernor's affirmative defense that Autodesk had misused its) Tj 0 -13 Td 1.03 Tw (copyright, reasoning that a misuse defense would not benefit) Tj 0 -13 Td 1.37 Tw (Vernor since he had prevailed on copyright infringement. In) Tj 0 -13 Td .75 Tw (October 2009, the district court entered judgment for Vernor,) Tj 0 -13 Td 1.2 Tw (and Autodesk timely appealed.) Tj /F1 12 Tf 100 Tz 141.498 -25.9 Td (III.) Tj /F1 12 Tf 100 Tz -129.498 -25.9 Td 2 Tw ([1]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj 2 Tw (Copyright is a federal law protection provided to the) Tj -12 -13 Td .85 Tw (authors of ) Tj (ªoriginal works of authorship,) Tj (º including software) Tj 0 -13 Td 1.18 Tw (programs. 17 U.S.C. §§) Tj 0 Tw ( ) Tj 1.18 Tw (101-103. The Copyright Act confers) Tj 0 -13 Td 2.38 Tw (several exclusive rights on copyright owners, including the) Tj 0 -13 Td 2.83 Tw (exclusive rights to reproduce their works and to distribute) Tj 0 -13 Td .97 Tw (their works by sale or rental. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. §) Tj 0 Tw ( ) Tj .97 Tw (106\(1\), \(3\). The exclusive) Tj 0 -13 Td .1 Tw (distribution right is limited by the ) Tj /F1 12 Tf 100 Tz (first sale doctrine) Tj /F2 12 Tf 100 Tz (, an affir-) Tj 0 -13.1 Td 1.18 Tw (mative defense to copyright infringement that allows owners) Tj 0 -13.1 Td 2.52 Tw (of copies of copyrighted works to resell those copies. The) Tj 0 -13.1 Td 3 Tw (exclusive reproduction right is limited within the software) Tj 0 -13.1 Td 3.24 Tw (context by the ) Tj /F1 12 Tf 100 Tz (essential step defense) Tj /F2 12 Tf 100 Tz (, another affirmative) Tj 0 -13.1 Td 2.9 Tw (defense to copyright infringement that is discussed further) Tj /F4 12 Tf 100 Tz 0 -13.1 Td 2.21 Tw (infra) Tj /F2 12 Tf 100 Tz (. Both of these affirmative defenses are unavailable to) Tj 0 -13.1 Td .33 Tw (those who are only licensed to use their copies of copyrighted) Tj 0 -13.1 Td 1.2 Tw (works.) Tj 12 -26 Td 3.41 Tw (This case requires us to decide whether Autodesk sold) Tj -12 -13.1 Td .2 Tw (Release 14 copies to its customers or licensed the copies to its) Tj 0 -13.1 Td .8 Tw (customers. If CTA owned its copies of Release 14, then both) Tj 0 -13.1 Td 1.44 Tw (its sales to Vernor and Vernor's subsequent sales were non-) Tj 0 -13.1 Td .25 Tw (infringing under the first sale doctrine.) Tj 4.9 Ts /F5 6 Tf 100 Tz (6) Tj 0 Ts /F2 12 Tf 100 Tz ( However, if Autodesk) Tj 0 -13.1 Td 1.37 Tw (only licensed CTA to use copies of Release 14, then CTA's) Tj 0 -13.1 Td 1.94 Tw (and Vernor's sales of those copies are not protected by the) Tj /F2 10 Tf 100 Tz 10 -25.8 Td 4.1 Ts /F5 6 Tf 100 Tz 1.41 Tw (6) Tj 0 Ts /F2 10 Tf 100 Tz (If Autodesk's transfer of Release 14 copies to CTA was a first sale,) Tj -10 -11.1 Td .83 Tw (then CTA's resale of the software in violation of the SLA's terms would) Tj 0 -11.1 Td 1.66 Tw (be a breach of contract, but would not result in copyright liability. ) Tj /F4 10 Tf 100 Tz (See) Tj 0 -11.1 Td .39 Tw (United States v. Wise) Tj /F2 10 Tf 100 Tz (, 550 F.2d 1180, 1187 \(9th Cir. 1977\) \() Tj (ª[T]he exclu-) Tj 0 -11.1 Td 1.1 Tw (sive right to vend the transferred copy rests with the vendee, who is not) Tj 0 -11.1 Td 1.66 Tw (restricted by statute from further transfers of that copy, even though in) Tj 0 -11.1 Td 1 Tw (breach of an agreement restricting its sale.) Tj (º\). ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -411.25 m 300 -411.25 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13871) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 36 0 obj 4091 endobj 34 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 30 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 35 0 R >> endobj %%Page: 10 10 38 0 obj << /Length 39 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 2.61 Tw 0 Tc (first sale doctrine and would therefore infringe Autodesk's) Tj 0 -13.3 Td 1.2 Tw (exclusive distribution right.) Tj /F1 12 Tf 100 Tz 0 -26.4 Td (A.) Tj 9 Tw ( ) Tj 1.2 Tw (The first sale doctrine) Tj /F2 12 Tf 100 Tz 12 -26.3 Td 2.91 Tw (The Supreme Court articulated the first sale doctrine in) Tj -12 -13.3 Td .94 Tw (1908, holding that a copyright owner's exclusive distribution) Tj 0 -13.3 Td 1.67 Tw (right is exhausted after the owner's first sale of a particular) Tj 0 -13.3 Td 4.03 Tw (copy of the copyrighted work. ) Tj /F4 12 Tf 100 Tz (See Bobbs-Merrill Co. v.) Tj 0 -13.3 Td 2.07 Tw (Straus) Tj /F2 12 Tf 100 Tz (, 210 U.S. 339, 350-51 \(1908\). In ) Tj /F4 12 Tf 100 Tz (Bobbs-Merrill) Tj /F2 12 Tf 100 Tz (, the) Tj 0 -13.3 Td 1.5 Tw (plaintiff-copyright owner sold its book with a printed notice) Tj 0 -13.3 Td 1.27 Tw (announcing that any retailer who sold the book for less than) Tj 0 -13.3 Td 1.33 Tw (one dollar was responsible for copyright infringement. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at) Tj 0 -13.3 Td 4.38 Tw (341. Plaintiff sought injunctive relief against defendants-) Tj 0 -13.3 Td .03 Tw (booksellers who failed to comply with the price restriction. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (.) Tj 0 -13.3 Td 1.5 Tw (at 341-42. The Supreme Court rejected the plaintiff's claim,) Tj 0 -13.3 Td 2.57 Tw (holding that its exclusive distribution right applied only to) Tj 0 -13.3 Td 1.2 Tw (first sales of copies of the work. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 350-51. The distribu-) Tj 0 -13.3 Td 2.03 Tw (tion right did not permit plaintiff to dictate that subsequent) Tj 0 -13.3 Td .54 Tw (sales of the work below a particular price were infringing. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (.) Tj 0 -13.3 Td 1.26 Tw (The Court noted that its decision solely applied to the rights) Tj 0 -13.3 Td 3.81 Tw (of a copyright owner that distributed its work without a) Tj 0 -13.3 Td .88 Tw (license agreement. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 350 \() Tj (ªThere is no claim in this case) Tj 0 -13.2 Td 2 Tw (of contract limitation, nor license agreement controlling the) Tj 0 -13.2 Td 1.2 Tw (subsequent sales of the book.) Tj (º\).) Tj /F1 12 Tf 100 Tz 12 -26.3 Td 1.38 Tw ([2]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj 1.38 Tw (Congress codified the first sale doctrine the following) Tj -12 -13.2 Td .6 Tw (year. ) Tj /F4 12 Tf 100 Tz (See ) Tj /F2 12 Tf 100 Tz (17 U.S.C. §) Tj 0 Tw ( ) Tj .6 Tw (41 \(1909\). In its current form, it allows) Tj 0 -13.2 Td .33 Tw (the ) Tj (ªowner of a particular copy) Tj (º of a copyrighted work to sell) Tj 0 -13.2 Td -.55 Tw (or dispose of his copy without the copyright owner's authoriza-) Tj /F5 6 Tf 100 Tz 0 Ts /F2 12 Tf 100 Tz 0 -13.2 Td .55 Tw (tion.) Tj 4.9 Ts /F5 6 Tf 100 Tz (7) Tj 0 Ts /F2 12 Tf 100 Tz ( ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. §) Tj 0 Tw ( ) Tj .55 Tw (109\(a\) \(enacted 1976\). The first sale doctrine does) Tj 0 -13.2 Td .09 Tw (not apply to a person who possesses a copy of the copyrighted) Tj 0 -13.2 Td 1.07 Tw (work without owning it, such as a licensee. ) Tj /F4 12 Tf 100 Tz (See id) Tj /F2 12 Tf 100 Tz (. §) Tj 0 Tw ( ) Tj 1.07 Tw (109\(d\);) Tj /F2 10 Tf 100 Tz 10 -26 Td 4.1 Ts /F5 6 Tf 100 Tz .74 Tw (7) Tj 0 Ts /F2 10 Tf 100 Tz (The parties dispute who bears the burden to prove the first sale or the) Tj -10 -11.2 Td .4 Tw (absence thereof in a civil case, a question we have not yet resolved. Since) Tj 0 -11.2 Td .3 Tw (the facts in this case are undisputed, including the chain of software trans-) Tj 0 -11.2 Td 1 Tw (fers, we need not decide the issue. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -444.15 m 300 -444.15 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13872) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 39 0 obj 4423 endobj 37 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 30 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 38 0 R >> endobj %%Page: 11 11 41 0 obj << /Length 42 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F4 12 Tf 100 Tz 0 -8.4 Td 1.03 Tw 0 Tc (cf. Quality King Distribs., Inc. v. L'Anza Research Int'l Inc.) Tj /F2 12 Tf 100 Tz (,) Tj 0 -13.3 Td .36 Tw (523 U.S. 135, 146-47 \(1998\) \() Tj (ª[T]he first sale doctrine would) Tj 0 -13.3 Td .8 Tw (not provide a defense to . . . any non-owner such as a bailee,) Tj 0 -13.3 Td .93 Tw (a licensee, a consignee, or one whose possession of the copy) Tj 0 -13.3 Td 1.2 Tw (was unlawful.) Tj (º\).) Tj /F1 12 Tf 100 Tz 0 -26.3 Td (B.) Tj 9 Tw ( ) Tj 1.2 Tw (Owners vs. licensees) Tj /F2 12 Tf 100 Tz 12 -26.2 Td 1.42 Tw (We turn to our precedents governing whether a transferee) Tj -12 -13.3 Td 1.66 Tw (of a copy of a copyrighted work is an owner or licensee of) Tj 0 -13.2 Td .37 Tw (that copy. We then apply those precedents to CTA's and Ver-) Tj 0 -13.2 Td 1.2 Tw (nor's possession of Release 14 copies.) Tj 11 -26.2 Td (1.) Tj 9 Tw ( ) Tj 1.2 Tw /F4 12 Tf 100 Tz (United States v. Wise) Tj /F2 12 Tf 100 Tz (, 550 F.2d 1180 \(9th Cir. 1977\)) Tj 1 -26.2 Td .16 Tw (In ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz (, a criminal copyright infringement case, we consid-) Tj -12 -13.2 Td .08 Tw (ered whether copyright owners who transferred copies of their) Tj 0 -13.2 Td 2.55 Tw (motion pictures pursuant to written distribution agreements) Tj 0 -13.2 Td .3 Tw (had executed first sales. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1187. The defendant was found) Tj 0 -13.2 Td 1.08 Tw (guilty of copyright infringement based on his for-profit sales) Tj 0 -13.2 Td .83 Tw (of motion picture prints. ) Tj /F4 12 Tf 100 Tz (See id) Tj /F2 12 Tf 100 Tz (. at 1183. The copyright own-) Tj 0 -13.2 Td 1.36 Tw (ers distributed their films to third parties pursuant to written) Tj 0 -13.2 Td 1.22 Tw (agreements that restricted their use and transfer. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1183-) Tj 0 -13.2 Td 3.41 Tw (84. On appeal, the defendant argued that the government) Tj 0 -13.2 Td .46 Tw (failed to prove the absence of a first sale for each film.) Tj 4.9 Ts /F5 6 Tf 100 Tz (8) Tj 0 Ts /F2 12 Tf 100 Tz ( If the) Tj 0 -13.2 Td .07 Tw (copyright owners' initial transfers of the films were first sales,) Tj 0 -13.2 Td 1.82 Tw (then the defendant's resales were protected by the first sale) Tj 0 -13.2 Td 1.2 Tw (doctrine and thus were not copyright infringement.) Tj 12 -26.2 Td 1.21 Tw (To determine whether a first sale occurred, we considered) Tj -12 -13.2 Td 3 Tw (multiple factors pertaining to each film distribution agree-) Tj 0 -13.2 Td 1.28 Tw (ment. Specifically, we considered whether the agreement \(a\)) Tj 0 -13.2 Td 1.41 Tw (was labeled a license, \(b\) provided that the copyright owner) Tj 0 -13.2 Td 1.3 Tw (retained title to the prints, \(c\) required the return or destruc-) Tj /F2 10 Tf 100 Tz 10 -26 Td 4.1 Ts /F5 6 Tf 100 Tz 1.74 Tw (8) Tj 0 Ts /F2 10 Tf 100 Tz (In ) Tj /F4 10 Tf 100 Tz (Wise) Tj /F2 10 Tf 100 Tz (, we construed former 17 U.S.C. §) Tj 0 Tw ( ) Tj 1.74 Tw (27, since ) Tj /F4 10 Tf 100 Tz (replaced by) Tj /F2 10 Tf 100 Tz ( 17) Tj -10 -11.2 Td .12 Tw (U.S.C. §) Tj 0 Tw ( ) Tj .12 Tw (109\(a\), the current codification of the first sale doctrine. The pro-) Tj 0 -11.2 Td 1 Tw (visions are materially similar. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -455.35 m 300 -455.35 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13873) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 42 0 obj 3942 endobj 40 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 30 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 41 0 R >> endobj %%Page: 12 12 44 0 obj << /Length 45 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 2.8 Tw 0 Tc (tion of the prints, \(d\) forbade duplication of prints, or \(e\)) Tj 0 -13.3 Td .25 Tw (required the transferee to maintain possession of the prints for) Tj 0 -13.3 Td 2.52 Tw (the agreement's duration. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1190-92. Our use of these) Tj 0 -13.3 Td 1.58 Tw (several considerations, none dispositive, may be seen in our) Tj 0 -13.3 Td 1.2 Tw (treatment of each film print. ) Tj 12 -26.4 Td 1.32 Tw (For example, we reversed the defendant's conviction with) Tj -12 -13.3 Td 1.97 Tw (respect to ) Tj /F4 12 Tf 100 Tz (Camelot) Tj /F2 12 Tf 100 Tz (. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1194. It was unclear whether the) Tj /F4 12 Tf 100 Tz 0 -13.3 Td .15 Tw (Camelot ) Tj /F2 12 Tf 100 Tz (print sold by the defendant had been subject to a first) Tj 0 -13.3 Td 2.05 Tw (sale. Copyright owner Warner Brothers distributed ) Tj /F4 12 Tf 100 Tz (Camelot) Tj /F2 12 Tf 100 Tz 0 -13.3 Td 2 Tw (prints pursuant to multiple agreements, and the government) Tj 0 -13.3 Td 1.11 Tw (did not prove the absence of a first sale with respect to each) Tj 0 -13.3 Td .44 Tw (agreement. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1191-92, 1194. We noted that, in one agree-) Tj 0 -13.3 Td 5.33 Tw (ment, Warner Brothers had retained title to the prints,) Tj 0 -13.3 Td .86 Tw (required possessor National Broadcasting Company \() Tj (ªNBC) Tj (º\)) Tj 0 -13.3 Td .93 Tw (to return the prints if the parties could select a mutual agree-) Tj 0 -13.3 Td 1.74 Tw (able price,) Tj 4.9 Ts /F5 6 Tf 100 Tz (9) Tj 0 Ts /F2 12 Tf 100 Tz ( and if not, required NBC's certification that the) Tj 0 -13.3 Td .84 Tw (prints were destroyed. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1191. We held that these factors) Tj 0 -13.3 Td 1.2 Tw (created a license rather than a first sale. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. ) Tj 12 -26.3 Td 1.08 Tw (We further noted, however, that Warner Brothers had also) Tj -12 -13.3 Td .47 Tw (furnished another ) Tj /F4 12 Tf 100 Tz (Camelot ) Tj /F2 12 Tf 100 Tz (print to actress Vanessa Redgrave.) Tj /F4 12 Tf 100 Tz 0 -13.2 Td 1.09 Tw (Id) Tj /F2 12 Tf 100 Tz (. at 1192. The print was provided to Redgrave at cost, and) Tj 0 -13.2 Td .06 Tw (her use of the print was subject to several restrictions. She had) Tj 0 -13.2 Td 1.2 Tw (to retain possession of the print and was not allowed to sell,) Tj 0 -13.2 Td 1.58 Tw (license, reproduce, or publicly exhibit the print. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. She had) Tj 0 -13.2 Td 1.47 Tw (no obligation to return the print to Warner Brothers. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. We) Tj 0 -13.2 Td 1.41 Tw (concluded, ) Tj (ªWhile the provision for payment for the cost of) Tj 0 -13.2 Td .43 Tw (the film, standing alone, does not establish a sale, when taken) Tj 0 -13.2 Td 2 Tw (with the rest of the language of the agreement, it reveals a) Tj 0 -13.2 Td .66 Tw (transaction strongly resembling a sale with restrictions on the) Tj 0 -13.2 Td 2.27 Tw (use of the print.) Tj (º ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. There was no evidence of the print's) Tj 0 -13.2 Td 3.55 Tw (whereabouts, and we held that ) Tj (ª[i]n the absence of such) Tj /F2 10 Tf 100 Tz 10 -26 Td 4.1 Ts /F5 6 Tf 100 Tz .76 Tw (9) Tj 0 Ts /F2 10 Tf 100 Tz (Although the ) Tj /F4 10 Tf 100 Tz (Wise) Tj /F2 10 Tf 100 Tz ( defendant contended that this repurchase provision) Tj -10 -11.2 Td 1.78 Tw (created a first sale, we held that it merely allowed Warner Brothers to) Tj 0 -11.2 Td .48 Tw (compensate NBC for its out-of-pocket cost in producing additional prints.) Tj /F4 10 Tf 100 Tz 0 -11.2 Td 1 Tw (Id) Tj /F2 10 Tf 100 Tz (. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -444.15 m 300 -444.15 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13874) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 45 0 obj 4473 endobj 43 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 30 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 44 0 R >> endobj %%Page: 13 13 47 0 obj << /Length 48 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.24 Tw 0 Tc (proof,º the government failed to prove the absence of a first) Tj 0 -13.4 Td .63 Tw (sale with respect to this Redgrave print. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1191-92. Since) Tj 0 -13.4 Td 2.41 Tw (it was unclear which copy the defendant had obtained and) Tj 0 -13.4 Td .8 Tw (resold, his conviction for sale of ) Tj /F4 12 Tf 100 Tz (Camelot) Tj /F2 12 Tf 100 Tz ( had to be reversed.) Tj /F4 12 Tf 100 Tz 0 -13.4 Td 1.2 Tw (Id) Tj /F2 12 Tf 100 Tz (. ) Tj 12 -26.6 Td 1.33 Tw (Thus, under ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz (, where a transferee receives a particular) Tj -12 -13.4 Td 1.03 Tw (copy of a copyrighted work pursuant to a written agreement,) Tj 0 -13.4 Td 1.67 Tw (we consider all of the provisions of the agreement to deter-) Tj 0 -13.4 Td .94 Tw (mine whether the transferee became an owner of the copy or) Tj 0 -13.4 Td 1.71 Tw (received a license. We may consider \(1\) whether the agree-) Tj 0 -13.4 Td 2.93 Tw (ment was labeled a license and \(2\) whether the copyright) Tj 0 -13.4 Td .37 Tw (owner retained title to the copy, required its return or destruc-) Tj 0 -13.4 Td 3.5 Tw (tion, forbade its duplication, or required the transferee to) Tj 0 -13.4 Td .53 Tw (maintain possession of the copy for the agreement's duration.) Tj /F4 12 Tf 100 Tz 0 -13.4 Td 1.06 Tw (Id) Tj /F2 12 Tf 100 Tz (. at 1190-92. We did not find any one factor dispositive in) Tj /F4 12 Tf 100 Tz 0 -13.4 Td .73 Tw (Wise) Tj /F2 12 Tf 100 Tz (: we did not hold that the copyright owner's retention of) Tj 0 -13.4 Td .1 Tw (title itself established the absence of a first sale or that a trans-) Tj 0 -13.4 Td 1.5 Tw (feree's right to indefinite possession itself established a first) Tj 0 -13.4 Td 1.2 Tw (sale.) Tj 4.9 Ts /F5 6 Tf 100 Tz .5 Tw (10) Tj 0 Ts /F2 12 Tf 100 Tz 11 -26.6 Td 1.2 Tw (2.) Tj 9 Tw ( ) Tj 1.2 Tw /F4 12 Tf 100 Tz (The ) Tj (ª) Tj /F2 12 Tf 100 Tz (MAI) Tj /F4 12 Tf 100 Tz ( trio) Tj (º of cases) Tj /F2 12 Tf 100 Tz 1 -26.5 Td .82 Tw (Over fifteen years after ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz (, we again considered the dis-) Tj -12 -13.4 Td 3.25 Tw (tinction between owners and licensees of copies of copy-) Tj 0 -13.4 Td 2.8 Tw (righted works in three software copyright cases, the ) Tj (ª) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz 0 -13.4 Td 1.6 Tw (trioº. ) Tj /F4 12 Tf 100 Tz (See ) Tj (MAI Sys. Corp. v. Peak Computer, Inc.) Tj /F2 12 Tf 100 Tz (, 991 F.2d) Tj 0 -13.3 Td 1.27 Tw (511 \(9th Cir. 1993\); ) Tj /F4 12 Tf 100 Tz (Triad Sys. Corp. v. Se. Express Co.) Tj /F2 12 Tf 100 Tz (, 64) Tj 0 -13.3 Td 2.36 Tw (F.3d 1330 \(9th Cir. 1995\); ) Tj /F4 12 Tf 100 Tz (Wall Data, Inc. v. Los Angeles) Tj 0 -13.3 Td 1.33 Tw (County Sheriff's Dep't) Tj /F2 12 Tf 100 Tz (, 447 F.3d 769 \(9th Cir. 2006\). In the) Tj /F4 12 Tf 100 Tz 0 -13.3 Td 3.81 Tw (MAI) Tj /F2 12 Tf 100 Tz ( trio, we considered which software purchasers were) Tj /F2 10 Tf 100 Tz 10 -26.2 Td 4.1 Ts /F5 6 Tf 100 Tz 1.66 Tw (10) Tj 0 Ts /F4 10 Tf 100 Tz (Cf. Hampton v. Paramount Pictures Corp.) Tj /F2 10 Tf 100 Tz (, 279 F.2d 100, 103 \(9th) Tj -10 -11.3 Td .85 Tw (Cir. 1960\) \(holding in non-first sale doctrine case that the transferee of a) Tj 0 -11.3 Td .56 Tw (movie print was a licensee because the parties designated their agreement) Tj 0 -11.3 Td 1.46 Tw (as a perpetual license, even though their agreement provided for a one-) Tj 0 -11.3 Td 1.22 Tw (time lump sum payment and imposed no requirement that the transferee) Tj 0 -11.3 Td 1 Tw (would return the outstanding prints and negatives\). ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -421.15 m 300 -421.15 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13875) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 48 0 obj 4336 endobj 46 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 49 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 47 0 R >> endobj %%Page: 14 14 51 0 obj << /Length 52 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td .67 Tw 0 Tc (owners of copies of copyrighted works for purposes of a sec-) Tj 0 -13 Td 3.04 Tw (ond affirmative defense to infringement, the essential step) Tj 0 -13 Td 1.2 Tw (defense.) Tj /F1 12 Tf 100 Tz 12 -26 Td 1.45 Tw ([3]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj 1.45 Tw (The enforcement of copyright owners' exclusive right) Tj -12 -13 Td 1.52 Tw (to reproduce their work under the Copyright Act, 17 U.S.C.) Tj 0 -13 Td .03 Tw (§) Tj 0 Tw ( ) Tj .03 Tw (106\(1\), has posed special challenges in the software context.) Tj 0 -13 Td 2.1 Tw (In order to use a software program, a user's computer will) Tj 0 -13.1 Td 1.47 Tw (automatically copy the software into the computer's random) Tj 0 -13.1 Td 1.33 Tw (access memory \() Tj (ªRAM) Tj (º\), which is a form of computer data) Tj 0 -13.1 Td 3.22 Tw (storage. ) Tj /F4 12 Tf 100 Tz (See ) Tj (MAI) Tj /F2 12 Tf 100 Tz (, 991 F.2d at 513. Congress enacted the) Tj /F1 12 Tf 100 Tz 0 -13.1 Td 1.47 Tw (essential step defense) Tj /F2 12 Tf 100 Tz ( to codify that a software user who is) Tj 0 -13.1 Td 2.71 Tw (the ) Tj (ªowner of a copy) Tj (º of a copyrighted software program) Tj 0 -13.1 Td .43 Tw (does not infringe by making a copy of the computer program,) Tj 0 -13.1 Td .89 Tw (if the new copy is ) Tj (ªcreated as an essential step in the utiliza-) Tj 0 -13.1 Td 1.14 Tw (tion of the computer program in conjunction with a machine) Tj 0 -13.1 Td 1.2 Tw (and . . . is used in no other manner.) Tj (º 17 U.S.C. §) Tj 0 Tw ( ) Tj 1.2 Tw (117\(a\)\(1\).) Tj 12 -26 Td 1.33 Tw (The Copyright Act provides that an ) Tj (ªowner of a copy) Tj (º of) Tj -12 -13.1 Td 2.57 Tw (copyrighted software may claim the essential step defense,) Tj 0 -13.1 Td .77 Tw (and the ) Tj (ªowner of a particular copy) Tj (º of copyrighted software) Tj 0 -13.1 Td 5 Tw (may claim the first sale doctrine. 17 U.S.C. §§) Tj 0 Tw ( ) Tj 5 Tw (109\(a\),) Tj 0 -13.1 Td 2.74 Tw (117\(a\)\(1\). The ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( trio construed the phrase ) Tj (ªowner of a) Tj 0 -13.1 Td .55 Tw (copyº for essential step defense purposes. Neither Vernor nor) Tj 0 -13.1 Td 1.83 Tw (Autodesk contends that the first sale doctrine's inclusion of) Tj 0 -13.1 Td 2.96 Tw (the word ) Tj (ªparticular) Tj (º alters the phrase's meaning, and we) Tj 0 -13.1 Td .67 Tw (ªpresume that words used more than once in the same statute) Tj 0 -13.1 Td 1.91 Tw (have the same meaning throughout.) Tj (º ) Tj /F4 12 Tf 100 Tz (Moldo v. Matsco, Inc) Tj /F2 12 Tf 100 Tz (.) Tj /F4 12 Tf 100 Tz 0 -13.1 Td .77 Tw (\(In re Cybernetic Servs., Inc.\)) Tj /F2 12 Tf 100 Tz (, 252 F.3d 1039, 1051 \(9th Cir.) Tj 0 -13.1 Td 1.38 Tw (2002\). Accordingly, we consider the ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( trio's construction) Tj 0 -13.1 Td 1.53 Tw (of ) Tj (ªowner of a copy) Tj (º controlling in our analysis of whether) Tj 0 -13.1 Td 1.45 Tw (CTA and Vernor became ) Tj (ªowner[s] of a particular copy) Tj (º of) Tj 0 -13.1 Td 1.2 Tw (Release 14 software.) Tj 12 -26 Td 2.67 Tw (In ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( and ) Tj /F4 12 Tf 100 Tz (Triad) Tj /F2 12 Tf 100 Tz (, the defendants maintained computers) Tj -12 -13.1 Td 1.91 Tw (that ran the plaintiffs' operating system software. ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz (, 991) Tj 0 -13.1 Td .5 Tw (F.2d at 513; ) Tj /F4 12 Tf 100 Tz (Triad) Tj /F2 12 Tf 100 Tz (, 64 F.3d at 1333. When the defendants ran) Tj 0 -13.1 Td .83 Tw (the computers, the computers automatically loaded plaintiffs') Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13876) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 52 0 obj 4183 endobj 50 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 49 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 51 0 R >> endobj %%Page: 15 15 54 0 obj << /Length 55 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td .63 Tw 0 Tc (software into RAM. ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz (, 991 F.2d at 517-18; ) Tj /F4 12 Tf 100 Tz (Triad) Tj /F2 12 Tf 100 Tz (, 64 F.3d) Tj 0 -13.5 Td .93 Tw (at 1333, 1335-36. The plaintiffs in both cases sold their soft-) Tj 0 -13.5 Td 1.37 Tw (ware pursuant to restrictive license agreements, and we held) Tj 0 -13.5 Td 2.25 Tw (that their customers were licensees who were therefore not) Tj 0 -13.5 Td .57 Tw (entitled to claim the essential step defense. We found that the) Tj 0 -13.5 Td 2.11 Tw (defendants infringed plaintiffs' software copyrights by their) Tj 0 -13.5 Td 4.28 Tw (unauthorized loading of copyrighted software into RAM.) Tj /F4 12 Tf 100 Tz 0 -13.5 Td .21 Tw (MAI) Tj /F2 12 Tf 100 Tz (, 991 F.2d at 517-18 & n.5; ) Tj /F4 12 Tf 100 Tz (Triad) Tj /F2 12 Tf 100 Tz (, 64 F.3d at 1333, 1335-) Tj 0 -13.5 Td .53 Tw (36) Tj /F4 12 Tf 100 Tz (.) Tj /F2 12 Tf 100 Tz ( In ) Tj /F4 12 Tf 100 Tz (Triad) Tj /F2 12 Tf 100 Tz (, the plaintiff had earlier sold software outright to) Tj 0 -13.5 Td 2.26 Tw (some customers. 64 F.3d at 1333 n.2. We noted that these) Tj 0 -13.5 Td .18 Tw (customers were owners who were entitled to the essential step) Tj 0 -13.5 Td 1.11 Tw (defense, and the defendant did not infringe by making RAM) Tj 0 -13.5 Td 1.2 Tw (copies in servicing their computers. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. ) Tj 12 -26.7 Td 1.36 Tw (In ) Tj /F4 12 Tf 100 Tz (Wall Data) Tj /F2 12 Tf 100 Tz (, plaintiff sold 3,663 software licenses to the) Tj -12 -13.5 Td .67 Tw (defendant. ) Tj /F4 12 Tf 100 Tz (Wall Data) Tj /F2 12 Tf 100 Tz (, 447 F.3d at 773. The licenses \(1\) were) Tj 0 -13.5 Td 1.58 Tw (non-exclusive; \(2\) permitted use of the software on a single) Tj 0 -13.5 Td .71 Tw (computer; and \(3\) permitted transfer of the software once per) Tj 0 -13.4 Td 1.7 Tw (month, if the software was removed from the original com-) Tj 0 -13.4 Td .1 Tw (puter. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 775 n.5, 781. The defendant installed the software) Tj 0 -13.4 Td .92 Tw (onto 6,007 computers via hard drive imaging, which saved it) Tj 0 -13.4 Td 2.21 Tw (from installing the software manually on each computer. It) Tj 0 -13.4 Td .3 Tw (made an unverified claim that only 3,663 users could simulta-) Tj 0 -13.4 Td 1.2 Tw (neously access the software. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 776.) Tj /F1 12 Tf 100 Tz 12 -26.6 Td .61 Tw ([4]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj .61 Tw (The plaintiff sued for copyright infringement, contend-) Tj -12 -13.4 Td .16 Tw (ing that the defendant violated the license by ) Tj (ªover-installing) Tj (º) Tj 0 -13.4 Td .17 Tw (the software. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 775. The defendant raised an essential step) Tj 0 -13.4 Td 1.18 Tw (defense, contending that its hard drive imaging was a neces-) Tj 0 -13.4 Td 1.54 Tw (sary step of installation. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 776. On appeal, we held that) Tj 0 -13.4 Td 1.8 Tw (the district court did not abuse its discretion in denying the) Tj 0 -13.4 Td .55 Tw (defendant's request for a jury instruction on the essential step) Tj 0 -13.4 Td .2 Tw (defense. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 784. Citing ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz (, we held that the essential step) Tj 0 -13.4 Td .93 Tw (defense does not apply where the copyright owner grants the) Tj 0 -13.4 Td 1.74 Tw (user a license and significantly restricts the user's ability to) Tj 0 -13.4 Td 4.12 Tw (transfer the software. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 784-85. Since the plaintiff's) Tj 0 -13.4 Td 1.78 Tw (license imposed ) Tj (ªsignificant restrictions) Tj (º on the defendant's) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13877) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 55 0 obj 4424 endobj 53 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 49 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 54 0 R >> endobj %%Page: 16 16 57 0 obj << /Length 58 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td .04 Tw 0 Tc (software rights, the defendant was a licensee and was not enti-) Tj 0 -14 Td 1.2 Tw (tled to the essential step defense. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 785.) Tj 12 -27.7 Td 1.7 Tw (In ) Tj /F4 12 Tf 100 Tz (Wall Data) Tj /F2 12 Tf 100 Tz (, we acknowledged that ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( had been criti-) Tj -12 -14 Td 1.1 Tw (cized in a Federal Circuit decision, but declined to revisit its) Tj 0 -14 Td .9 Tw (holding, noting that the facts of ) Tj /F4 12 Tf 100 Tz (Wall Data) Tj /F2 12 Tf 100 Tz ( led to the conclu-) Tj 0 -14 Td .2 Tw (sion that any error in the district court's failure to instruct was) Tj 0 -14 Td .97 Tw (harmless. Even if the defendant owned its copies of the soft-) Tj 0 -14 Td .9 Tw (ware, its installation of the software on a number of comput-) Tj 0 -14 Td 2.05 Tw (ers in excess of its license was not an essential step in the) Tj 0 -13.9 Td 1.92 Tw (software's use. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 786 n.9 \(citing Nimmer on Copyright) Tj 0 -13.9 Td 4.14 Tw (§) Tj 0 Tw ( ) Tj 4.14 Tw (8.08[B][1][c] at 8-136; ) Tj /F4 12 Tf 100 Tz (DSC Commc'ns Corp. v. Pulse) Tj 0 -13.9 Td .88 Tw (Commc'ns, Inc.) Tj /F2 12 Tf 100 Tz (, 170 F.3d 1354, 1360 \(Fed. Cir. 1999\) \(criti-) Tj 0 -13.9 Td 1.2 Tw (cizing ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz (\)\). ) Tj 12 -27.7 Td .54 Tw (We read ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( and the ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( trio to prescribe three consider-) Tj -12 -13.9 Td 1 Tw (ations that we may use to determine whether a software user) Tj 0 -13.9 Td 1.41 Tw (is a licensee, rather than an owner of a copy. First, we con-) Tj 0 -13.9 Td 3 Tw (sider whether the copyright owner specifies that a user is) Tj 0 -13.9 Td .75 Tw (granted a license. Second, we consider whether the copyright) Tj 0 -13.9 Td 1.66 Tw (owner significantly restricts the user's ability to transfer the) Tj 0 -13.9 Td 1.95 Tw (software. Finally, we consider whether the copyright owner) Tj 0 -13.9 Td .94 Tw (imposes notable use restrictions.) Tj 4.9 Ts /F5 6 Tf 100 Tz (11) Tj 0 Ts /F2 12 Tf 100 Tz ( Our holding reconciles the) Tj /F4 12 Tf 100 Tz 0 -13.9 Td 2.6 Tw (MAI) Tj /F2 12 Tf 100 Tz ( trio and ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz (, even though the ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( trio did not cite) Tj /F4 12 Tf 100 Tz 0 -13.9 Td 1.53 Tw (Wise. See Cisneros-Perez v. Gonzales) Tj /F2 12 Tf 100 Tz (, 451 F.3d 1053, 1058) Tj 0 -13.9 Td 1.34 Tw (\(9th Cir. 2006\) \() Tj (ª[W]e are required to reconcile prior prece-) Tj 0 -13.9 Td 1.2 Tw (dents if we can do so.) Tj (º\)) Tj /F2 10 Tf 100 Tz 10 -27.3 Td 4.1 Ts /F5 6 Tf 100 Tz .1 Tw (11) Tj 0 Ts /F2 10 Tf 100 Tz (Although use restrictions were not dispositive in the ) Tj /F4 10 Tf 100 Tz (MAI) Tj /F2 10 Tf 100 Tz ( trio, we con-) Tj -10 -11.8 Td .87 Tw (sidered them in each case. ) Tj /F4 10 Tf 100 Tz (See MAI) Tj /F2 10 Tf 100 Tz (, 991 F.2d at 517 n.3 \(license limited) Tj 0 -11.8 Td .08 Tw (user to making one working and one backup copy of the software, and for-) Tj 0 -11.8 Td 4.03 Tw (bade examination, disclosure, copying, modification, adaptation, and) Tj 0 -11.8 Td .58 Tw (visual display of the software\); ) Tj /F4 10 Tf 100 Tz (Triad) Tj /F2 10 Tf 100 Tz (, 64 F.3d at 1333 \(license prohibited) Tj 0 -11.8 Td .65 Tw (software duplication and third-party use\); ) Tj /F4 10 Tf 100 Tz (Wall Data) Tj /F2 10 Tf 100 Tz (, 447 F.3d at 775 n.5) Tj 0 -11.8 Td 2.87 Tw (\(license permitted software use on single computer, prohibited multi-) Tj 0 -11.8 Td 1.15 Tw (computer and multi-user arrangements, and permitted transfer to another) Tj 0 -11.8 Td 1 Tw (computer no more than once every thirty days\). ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -382.65 m 300 -382.65 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13878) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 58 0 obj 4543 endobj 56 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 49 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 57 0 R >> endobj %%Page: 17 17 60 0 obj << /Length 61 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 12 -8.4 Td 1.58 Tw 0 Tc (In response to ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz (, Congress amended §) Tj 0 Tw ( ) Tj 1.58 Tw (117 to permit a) Tj /F4 12 Tf 100 Tz -12 -12.5 Td 1.75 Tw (computer owner) Tj /F2 12 Tf 100 Tz ( to copy software for maintenance or repair) Tj 0 -12.5 Td 2.73 Tw (purposes. ) Tj /F4 12 Tf 100 Tz (See) Tj /F2 12 Tf 100 Tz ( 17 U.S.C. §) Tj 0 Tw ( ) Tj 2.73 Tw (117\(c\); ) Tj /F4 12 Tf 100 Tz (see also ) Tj /F2 12 Tf 100 Tz (H.R. Rep. No.) Tj 0 -12.5 Td .96 Tw (105-551, pt. 1, at 27 \(1998\). However, Congress did not dis-) Tj 0 -12.5 Td .27 Tw (turb ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ('s holding that licensees are not entitled to the essen-) Tj 0 -12.5 Td 1.2 Tw (tial step defense.) Tj /F1 12 Tf 100 Tz 141.834 -24.8 Td (IV.) Tj -141.834 -24.9 Td (A.) Tj 9 Tw ( ) Tj 1.2 Tw (The district court's decision) Tj /F2 12 Tf 100 Tz 12 -24.9 Td 1.4 Tw (The district court interpreted ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( to hold that a first sale) Tj -12 -12.5 Td .6 Tw (occurs whenever the transferee is entitled to keep the copy of) Tj 0 -12.5 Td 1.92 Tw (the work. Since Autodesk does not require its customers to) Tj 0 -12.5 Td .77 Tw (return their copies of Release 14, the district court found that) Tj 0 -12.5 Td 1 Tw (Autodesk had sold Release 14 to CTA. It reasoned that thus,) Tj 0 -12.5 Td .41 Tw (CTA and Vernor were successive ) Tj (ªowner[s] of a copy) Tj (º of the) Tj 0 -12.5 Td .51 Tw (software and were entitled to resell it under the first sale doc-) Tj 0 -12.5 Td 1.71 Tw (trine. ) Tj (The district court also found that Vernor's customers') Tj 0 -12.5 Td 1.41 Tw (copying of software during installation was protected by the) Tj 0 -12.5 Td 1.2 Tw (essential step defense. ) Tj /F2 12 Tf 100 Tz 12 -24.9 Td 1.3 Tw (The district court acknowledged that were it to follow the) Tj /F4 12 Tf 100 Tz -12 -12.5 Td 4.28 Tw (MAI) Tj /F2 12 Tf 100 Tz ( trio, it would conclude that Autodesk had licensed) Tj 0 -12.5 Td 1.55 Tw (Release 14 copies to CTA, rather than sold them. However,) Tj 0 -12.6 Td 1.09 Tw (it viewed ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( and the ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( trio as irreconcilable, and it fol-) Tj 0 -12.6 Td 2.77 Tw (lowed ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( as the first-decided case. ) Tj /F4 12 Tf 100 Tz (See United States v.) Tj 0 -12.6 Td 1.2 Tw (Rodriguez-Lara) Tj /F2 12 Tf 100 Tz (, 421 F.3d 932, 943 \(9th Cir. 2005\). ) Tj /F1 12 Tf 100 Tz 0 -24.9 Td (B.) Tj 9 Tw ( ) Tj 1.2 Tw (Analysis) Tj /F1 12 Tf 100 Tz 12 -24.9 Td .87 Tw ([5]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj .87 Tw (We hold today that a software user is a licensee rather) Tj -12 -12.6 Td .33 Tw (than an owner of a copy where the copyright owner \(1\) speci-) Tj 0 -12.6 Td .2 Tw (fies that the user is granted a license; \(2\) significantly restricts) Tj 0 -12.6 Td 2.55 Tw (the user's ability to transfer the software; and \(3\) imposes) Tj 0 -12.6 Td .37 Tw (notable use restrictions.) Tj 4.9 Ts /F5 6 Tf 100 Tz (12) Tj 0 Ts /F2 12 Tf 100 Tz ( Applying our holding to Autodesk's) Tj /F2 10 Tf 100 Tz 10 -24.7 Td 4.1 Ts /F5 6 Tf 100 Tz .94 Tw (12) Tj 0 Ts /F2 10 Tf 100 Tz (We review the district court's grant of summary judgment to Vernor) Tj -10 -10.7 Td 1.85 Tw (de novo. ) Tj /F4 10 Tf 100 Tz (Padfield v. AIG Life Ins. Co.) Tj /F2 10 Tf 100 Tz (, 290 F.3d 1121, 1124 \(9th Cir.) Tj 0 -10.7 Td 1 Tw (2002\). ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -457.05 m 300 -457.05 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13879) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 61 0 obj 4214 endobj 59 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 49 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 60 0 R >> endobj %%Page: 18 18 63 0 obj << /Length 64 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 2.24 Tw 0 Tc (SLA, we conclude that CTA was a licensee rather than an) Tj 0 -12.4 Td 1.84 Tw (owner of copies of Release 14 and thus was not entitled to) Tj 0 -12.4 Td 1.2 Tw (invoke the first sale doctrine or the essential step defense. ) Tj /F1 12 Tf 100 Tz 12 -24.7 Td 2.9 Tw ([6]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj 2.9 Tw (Autodesk retained title to the software and imposed) Tj -12 -12.4 Td 2.91 Tw (significant transfer restrictions: it stated that the license is) Tj 0 -12.4 Td 4.28 Tw (nontransferable, the software could not be transferred or) Tj 0 -12.4 Td 1.52 Tw (leased without Autodesk's written consent, and the software) Tj 0 -12.4 Td .21 Tw (could not be transferred outside the Western Hemisphere. The) Tj 0 -12.4 Td .66 Tw (SLA also imposed use restrictions against the use of the soft-) Tj 0 -12.4 Td .57 Tw (ware outside the Western Hemisphere and against modifying,) Tj 0 -12.4 Td .11 Tw (translating, or reverse-engineering the software, removing any) Tj 0 -12.5 Td 3.24 Tw (proprietary marks from the software or documentation, or) Tj 0 -12.5 Td 1.47 Tw (defeating any copy protection device. Furthermore, the SLA) Tj 0 -12.5 Td 2.5 Tw (provided for termination of the license upon the licensee's) Tj 0 -12.5 Td 1.08 Tw (unauthorized copying or failure to comply with other license) Tj 0 -12.5 Td .81 Tw (restrictions. Thus, because Autodesk reserved title to Release) Tj 0 -12.5 Td 2.58 Tw (14 copies and imposed significant transfer and use restric-) Tj 0 -12.5 Td 2.36 Tw (tions, we conclude that its customers are licensees of their) Tj 0 -12.5 Td 1.2 Tw (copies of Release 14 rather than owners. ) Tj /F1 12 Tf 100 Tz 12 -24.7 Td .34 Tw ([7]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj .34 Tw (CTA was a licensee rather than an ) Tj (ªowner of a particu-) Tj -12 -12.5 Td 1.64 Tw (lar copy) Tj (º of Release 14, and it was not entitled to resell its) Tj 0 -12.5 Td 1.23 Tw (Release 14 copies to Vernor under the first sale doctrine. 17) Tj 0 -12.5 Td .55 Tw (U.S.C. §) Tj 0 Tw ( ) Tj .55 Tw (109\(a\). Therefore, Vernor did not receive title to the) Tj 0 -12.5 Td 1.41 Tw (copies from CTA and accordingly could not pass ownership) Tj 0 -12.5 Td 4.87 Tw (on to others. Both CTA's and Vernor's sales infringed) Tj 0 -12.5 Td .33 Tw (Autodesk's exclusive right to distribute copies of its work. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (.) Tj 0 -12.5 Td 1.2 Tw (§) Tj 0 Tw ( ) Tj 1.2 Tw (106\(3\). ) Tj /F1 12 Tf 100 Tz 12 -24.8 Td 1.8 Tw ([8]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj 1.8 Tw (Because Vernor was not an owner, his customers are) Tj -12 -12.5 Td 1.52 Tw (also not owners of Release 14 copies. Therefore, when they) Tj 0 -12.5 Td 1.23 Tw (install Release 14 on their computers, the copies of the soft-) Tj 0 -12.5 Td 1.95 Tw (ware that they make during installation infringe Autodesk's) Tj 0 -12.5 Td .83 Tw (exclusive reproduction right because they too are not entitled) Tj 0 -12.5 Td 4.4 Tw (to the benefit of the essential step defense.) Tj 4.9 Ts /F5 6 Tf 100 Tz (13) Tj 0 Ts /F2 12 Tf 100 Tz ( 17 U.S.C.) Tj 0 -12.5 Td 1.2 Tw (§§) Tj 0 Tw ( ) Tj 1.2 Tw (106\(1\), 117\(a\)\(1\). ) Tj /F2 10 Tf 100 Tz 10 -24.7 Td 4.1 Ts /F5 6 Tf 100 Tz .38 Tw (13) Tj 0 Ts /F2 10 Tf 100 Tz (It may seem intuitive that every lawful user of a copyrighted software) Tj -10 -10.6 Td 2.12 Tw (program, whether they own their copies or are merely licensed to use) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -467.85 m 300 -467.85 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13880) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 64 0 obj 4132 endobj 62 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 49 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 63 0 R >> endobj %%Page: 19 19 66 0 obj << /Length 67 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F1 12 Tf 100 Tz 12 -8.4 Td .53 Tw 0 Tc ([9]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj .53 Tw (Although unnecessary to our resolution of the case, we) Tj -12 -13.4 Td 2.18 Tw (address the legislative history in order to address the argu-) Tj 0 -13.4 Td .58 Tw (ments raised by the parties and amici. That legislative history) Tj 0 -13.4 Td 1.88 Tw (supports our conclusion that licensees such as CTA are not) Tj 0 -13.4 Td .7 Tw (entitled to claim the first sale doctrine. The House Report for) Tj 0 -13.4 Td 1.21 Tw (§) Tj 0 Tw ( ) Tj 1.21 Tw (109 underscores Congress' view that the first sale doctrine) Tj 0 -13.4 Td 1 Tw (is available only to a person who has acquired a copy via an) Tj 0 -13.4 Td 5.53 Tw (ªoutright sale) Tj (º. H.R. Rep. No. 94-1476, at 79 \(1976\),) Tj /F4 12 Tf 100 Tz 0 -13.4 Td 1.32 Tw (reprinted in ) Tj /F2 12 Tf 100 Tz (1976 U.S.C.C.A.N. 5659, 5693. The report also) Tj 0 -13.4 Td .67 Tw (asserts that the first sale doctrine does not ) Tj (ªapply to someone) Tj 0 -13.4 Td .91 Tw (who merely possesses a copy or phonorecord without having) Tj 0 -13.4 Td 1.2 Tw (acquired ownership of it.) Tj (º ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. ) Tj /F1 12 Tf 100 Tz 12 -26.5 Td .94 Tw ([10]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj .94 Tw (Our conclusion that those who rightfully possess, but) Tj -12 -13.4 Td 1.57 Tw (do not own, a copy of copyrighted software are not entitled) Tj 0 -13.4 Td 2.07 Tw (to claim the essential step defense is also supported by the) Tj 0 -13.4 Td .61 Tw (legislative history. Congress enacted §) Tj 0 Tw ( ) Tj .61 Tw (117 following a report) Tj 0 -13.4 Td 1.75 Tw (from the National Commission on New Technological Uses) Tj 0 -13.4 Td 1 Tw (of Copyrighted Works \() Tj (ªCONTU) Tj (º\) proposing Copyright Act) Tj 0 -13.4 Td .42 Tw (amendments. ) Tj /F4 12 Tf 100 Tz (DSC Commc'ns Corp. v. Pulse Commc'ns, Inc.) Tj /F2 12 Tf 100 Tz (,) Tj 0 -13.4 Td .86 Tw (170 F.3d 1354, 1360 \(Fed. Cir. 1999\) \(citing ) Tj /F4 12 Tf 100 Tz (Final Report of) Tj 0 -13.4 Td 4.04 Tw (the National Commission on New Technological Uses of) Tj 0 -13.4 Td .8 Tw (Copyrighted Works) Tj /F2 12 Tf 100 Tz (, U.S. Dept. of Commerce, PB-282141, at) Tj 0 -13.3 Td .22 Tw (30 \(July 31, 1978\)\). CONTU's proposed version of §) Tj 0 Tw ( ) Tj .22 Tw (117 was) Tj 0 -13.3 Td .25 Tw (identical to the version that Congress enacted with one excep-) Tj 0 -13.3 Td 1.11 Tw (tion. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. CONTU's version provided, ) Tj (ª[I]t is not an infringe-) Tj 0 -13.3 Td 3.6 Tw (ment for the rightful possessor of a copy of a computer) Tj 0 -13.3 Td .93 Tw (program to make or authorize the making of another copy or) Tj 0 -13.3 Td 2.27 Tw (adaptation of that program . . . .) Tj (º ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. Without explanation,) Tj 0 -13.3 Td 3.66 Tw (Congress substituted ) Tj (ªowner) Tj (º for ) Tj (ªrightful possessor.) Tj (º ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (.) Tj 0 -13.3 Td .71 Tw (This modification suggests that more than rightful possession) Tj /F2 10 Tf 100 Tz 0 -26.2 Td 1.1 Tw (them, should be entitled to an ) Tj (ªessential step defense) Tj (º that provides that) Tj 0 -11.3 Td (they do not infringe simply by using a computer program that they law-) Tj 0 -11.3 Td 1.06 Tw (fully acquired. However, the Copyright Act confers this defense only on) Tj 0 -11.3 Td .96 Tw (owners of software copies. ) Tj /F4 10 Tf 100 Tz (See) Tj /F2 10 Tf 100 Tz ( 17 U.S.C. §) Tj 0 Tw ( ) Tj .96 Tw (117. In contrast, a licensee's) Tj 0 -11.3 Td 1.87 Tw (right to use the software, including the right to copy the software into) Tj 0 -11.3 Td 1 Tw (RAM, is conferred by the terms of its license agreement. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -421.15 m 300 -421.15 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13881) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 67 0 obj 4449 endobj 65 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 68 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 66 0 R >> endobj %%Page: 20 20 70 0 obj << /Length 71 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.72 Tw 0 Tc (is required for §) Tj 0 Tw ( ) Tj 1.72 Tw (117 to apply Ð i.e., that Congress did not) Tj 0 -13 Td .58 Tw (intend licensees subject to significant transfer and use restric-) Tj 0 -13 Td 1.2 Tw (tions to receive the benefit of the essential step defense.) Tj /F1 12 Tf 100 Tz 0 -25.8 Td (C.) Tj 9 Tw ( ) Tj 1.2 Tw (Vernor's four counterarguments are not persuasive) Tj /F2 12 Tf 100 Tz 11 -25.8 Td (1.) Tj 9 Tw ( ) Tj 1.2 Tw /F4 12 Tf 100 Tz (The district court's decision concerning indefinite ) Tj 21 -13.1 Td (possession) Tj /F2 12 Tf 100 Tz -20 -25.9 Td 1.1 Tw (Vernor contends that the district court correctly concluded) Tj -12 -13 Td .77 Tw (that \(1\) ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( is the controlling precedent and \(2\) under ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz (,) Tj 0 -13 Td .93 Tw (the key factor is whether transferees are entitled to indefinite) Tj 0 -13 Td .66 Tw (possession of their copy of a copyrighted work. As explained) Tj /F4 12 Tf 100 Tz 0 -13 Td .15 Tw (supra) Tj /F2 12 Tf 100 Tz (, we disagree. In ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz (, we utilized a multi-factor balanc-) Tj 0 -13 Td 1.27 Tw (ing test to distinguish between a first sale and a license of a) Tj 0 -13 Td .81 Tw (copyrighted film print. ) Tj /F4 12 Tf 100 Tz (United States v. Wise) Tj /F2 12 Tf 100 Tz (, 550 F.2d 1180,) Tj 0 -13 Td .83 Tw (1190-92 \(9th Cir. 1977\). We considered a transferee's ability) Tj 0 -13 Td .05 Tw (to possess a print indefinitely as one factor in our analysis, but) Tj 0 -13 Td 2.05 Tw (we did not treat it as dispositive. If we had, we would not) Tj 0 -13 Td .78 Tw (have needed to consider other contractual provisions, such as) Tj 0 -13 Td 2.51 Tw (retention of title, copying prohibitions, and lending restric-) Tj 0 -13 Td 2.81 Tw (tions. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. Moreover, we held in ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( that two agreements) Tj 0 -13 Td .66 Tw (were licenses rather than first sales, even though those agree-) Tj 0 -13 Td 1 Tw (ments did not describe any provision requiring the transferee) Tj 0 -13 Td .81 Tw (to return the prints to the copyright owners. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1192 \(ana-) Tj 0 -13 Td 1.2 Tw (lyzing VIP agreements for ) Tj /F4 12 Tf 100 Tz (The Sting) Tj /F2 12 Tf 100 Tz ( and ) Tj /F4 12 Tf 100 Tz (Funny Girl) Tj /F2 12 Tf 100 Tz (\).) Tj 4.9 Ts /F5 6 Tf 100 Tz .5 Tw (14) Tj 0 Ts /F2 10 Tf 100 Tz 10 -25.8 Td 4.1 Ts /F5 6 Tf 100 Tz .48 Tw (14) Tj 0 Ts /F2 10 Tf 100 Tz (We also note that for some of the ) Tj /F4 10 Tf 100 Tz (Wise) Tj /F2 10 Tf 100 Tz ( films, there was a lack of evi-) Tj -10 -11.1 Td 1.34 Tw (dence whether transferees who had the option to purchase copies of the) Tj 0 -11.1 Td 1.11 Tw (prints had done so. Without evidence concerning these options, the gov-) Tj 0 -11.1 Td .68 Tw (ernment could not sustain its criminal burden of proof to demonstrate the) Tj 0 -11.1 Td .83 Tw (absence of a first sale. ) Tj /F4 10 Tf 100 Tz (See, e.g.) Tj /F2 10 Tf 100 Tz (, 550 F.2d at 1191-92 \() Tj (ªNo evidence was) Tj 0 -11.1 Td 1.34 Tw (adduced at trial as to whether [transferee] exercised its election [to pur-) Tj 0 -11.1 Td .73 Tw (chase a copy of the print], or, if it did, whether it resold that print. In the) Tj 0 -11.1 Td .39 Tw (absence of such proof, the Government has failed in its burden of proving) Tj 0 -11.1 Td .76 Tw (the absence of first sale of the photoplay ) Tj /F4 10 Tf 100 Tz (Funny Girl.) Tj /F2 10 Tf 100 Tz (º\) Here, in contrast,) Tj 0 -11.1 Td 1.42 Tw (the undisputed evidence includes the SLA between Autodesk and CTA,) Tj 0 -11.1 Td .21 Tw (which reflects the absence of a first sale. The SLA evidences both the par-) Tj 0 -11.1 Td 2.39 Tw (ties' intent to create a license and CTA's acquiescence to substantive) Tj 0 -11.1 Td 1 Tw (restrictions that distinguish the transfer from an outright first sale. ) Tj ET Q q 1 0 0 1 156 643.5 cm 0 G .5 w 0 -344.65 m 300 -344.65 l s Q q BT 0 Tr 0 g 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13882) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 71 0 obj 4720 endobj 69 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 68 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R /F5 23 0 R >> /ProcSet 1 0 R >> /Contents 70 0 R >> endobj %%Page: 21 21 73 0 obj << /Length 74 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 11 -8.4 Td 1.2 Tw 0 Tc (2.) Tj 9 Tw ( ) Tj 1.2 Tw /F4 12 Tf 100 Tz (Circuit split with the Federal and Second Circuits) Tj /F2 12 Tf 100 Tz 1 -26 Td .58 Tw (Vernor contends that reversing the district court will create) Tj -12 -13 Td .83 Tw (a circuit split with the Federal and Second Circuits. ) Tj /F4 12 Tf 100 Tz (See DSC) Tj 0 -13 Td 2.82 Tw (Commc'ns Corp. v. Pulse Commc'ns, Inc.) Tj /F2 12 Tf 100 Tz (, 170 F.3d 1354) Tj 0 -13 Td .63 Tw (\(Fed. Cir. 1999\); ) Tj /F4 12 Tf 100 Tz (Krause v. Titleserv, Inc.) Tj /F2 12 Tf 100 Tz (, 402 F.3d 119 \(2nd) Tj 0 -13 Td 1.2 Tw (Cir. 2005\). We disagree. ) Tj 12 -26 Td 2.12 Tw (In ) Tj /F4 12 Tf 100 Tz (DSC) Tj /F2 12 Tf 100 Tz (, the Federal Circuit considered the essential step) Tj -12 -13 Td 2.13 Tw (defense in a case in which the plaintiff and defendant sold) Tj 0 -13.1 Td 3.18 Tw (competing telephone systems hardware cards. 170 F.3d at) Tj 0 -13.1 Td 2.5 Tw (1358. Rather than develop its own software, the defendant) Tj 0 -13.1 Td .83 Tw (used its hardware to download plaintiff's software into RAM) Tj 0 -13.1 Td .57 Tw (upon installation. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. The plaintiff argued that this constituted) Tj 0 -13.1 Td 1.24 Tw (copyright infringement, and the defendant countered that the) Tj 0 -13.1 Td 1.16 Tw (relevant customers owned plaintiff's software, entitling them) Tj 0 -13.1 Td .3 Tw (to an essential step defense. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1359-60. The court rejected) Tj 0 -13.1 Td 2.1 Tw (the defendant's essential step defense, holding that plaintiff) Tj 0 -13.1 Td 1.27 Tw (licensed its customers' use of their copies of the software in) Tj 0 -13.1 Td 1.05 Tw (the relevant license agreement's transfer and use restrictions.) Tj /F4 12 Tf 100 Tz 0 -13.1 Td 1.75 Tw (Id) Tj /F2 12 Tf 100 Tz (. at 1360-61. Although the Federal Circuit rejected ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ('s) Tj 0 -13.1 Td 1.81 Tw (ªcharacterization of all licensees as non-owners,) Tj (º it deemed) Tj /F4 12 Tf 100 Tz 0 -13.1 Td .17 Tw (MAI) Tj /F2 12 Tf 100 Tz ( ) Tj (ªinstructive) Tj (º and determined that the agreements there in) Tj 0 -13.1 Td 1.77 Tw (issue were licenses. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 1360. Although ) Tj /F4 12 Tf 100 Tz (DSC) Tj /F2 12 Tf 100 Tz ( is thus nar-) Tj 0 -13.1 Td 1.56 Tw (rower than ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz (, it does not conflict with our holding today) Tj 0 -13.1 Td .63 Tw (that a software customer bound by a restrictive license agree-) Tj 0 -13.1 Td .69 Tw (ment may be a licensee of a copy not entitled to the first sale) Tj 0 -13.1 Td 1.2 Tw (doctrine or the essential step defense.) Tj 12 -26 Td .47 Tw (The Second Circuit's decision in ) Tj /F4 12 Tf 100 Tz (Krause) Tj /F2 12 Tf 100 Tz ( is distinguishable.) Tj -12 -13.1 Td 4.67 Tw (In ) Tj /F4 12 Tf 100 Tz (Krause) Tj /F2 12 Tf 100 Tz (, the plaintiff-copyright owner was a software) Tj 0 -13.1 Td 0 Tw (developer who sued his former employer for making allegedly) Tj 0 -13.1 Td .14 Tw (infringing modifications to his software program. ) Tj /F4 12 Tf 100 Tz (Krause) Tj /F2 12 Tf 100 Tz (, 402) Tj 0 -13.1 Td .84 Tw (F.3d at 120-21. The Second Circuit considered the totality of) Tj 0 -13.1 Td 2.42 Tw (the parties' agreement to determine that the defendant was) Tj 0 -13.1 Td 2.27 Tw (entitled to an essential step defense. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 124. In ) Tj /F4 12 Tf 100 Tz (Krause) Tj /F2 12 Tf 100 Tz (,) Tj 0 -13.1 Td 1.37 Tw (unlike here, the parties did not have a written license agree-) Tj 0 -13.1 Td .28 Tw (ment, the defendant-employer had paid the plaintiff-employee) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13883) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 74 0 obj 4349 endobj 72 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 68 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 73 0 R >> endobj %%Page: 22 22 76 0 obj << /Length 77 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.08 Tw 0 Tc (significant consideration to develop the programs for its sole) Tj 0 -13 Td .63 Tw (benefit, and the plaintiff had agreed to allow the defendant to) Tj 0 -13 Td .46 Tw (use the programs ) Tj (ªforever,) Tj (º regardless of whether the parties') Tj 0 -13 Td 1.25 Tw (relationship terminated. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 124-25. Thus, the Second Cir-) Tj 0 -13.1 Td 2.08 Tw (cuit found that the defendant-employer owned its copies of) Tj 0 -13.1 Td .1 Tw (the work. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. The facts and the analysis in ) Tj /F4 12 Tf 100 Tz (Krause) Tj /F2 12 Tf 100 Tz ( are not con-) Tj 0 -13.1 Td 1.27 Tw (trary to our determination that CTA is a licensee rather than) Tj 0 -13.1 Td 1.2 Tw (an owner.) Tj 11 -26 Td (3.) Tj 9 Tw ( ) Tj 1.2 Tw /F4 12 Tf 100 Tz (The Supreme Court's holding in ) Tj (Bobbs-Merrill) Tj /F2 12 Tf 100 Tz 1 -26 Td 1.1 Tw (Vernor contends that ) Tj /F4 12 Tf 100 Tz (Bobbs-Merrill) Tj /F2 12 Tf 100 Tz ( establishes his entitle-) Tj -12 -13.1 Td .93 Tw (ment to a first sale defense. ) Tj /F4 12 Tf 100 Tz (See Bobbs-Merrill Co. v. Straus) Tj /F2 12 Tf 100 Tz (,) Tj 0 -13.1 Td .33 Tw (210 U.S. 339 \(1908\). However, ) Tj /F4 12 Tf 100 Tz (Bobbs-Merrill) Tj /F2 12 Tf 100 Tz ( stands only for) Tj 0 -13.1 Td .14 Tw (the proposition that a copyright owner's exclusive distribution) Tj 0 -13.1 Td 1.44 Tw (right does not allow it to control sales of copies of its work) Tj 0 -13.1 Td .47 Tw (after the first sale. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. at 350. Decided in 1908, ) Tj /F4 12 Tf 100 Tz (Bobbs-Merrill) Tj /F2 12 Tf 100 Tz 0 -13.1 Td 2.53 Tw (did not and could not address the question of whether the) Tj 0 -13.1 Td .87 Tw (right to use software is distinct from the ownership of copies) Tj 0 -13.1 Td 1.67 Tw (of software. Moreover, the Supreme Court in ) Tj /F4 12 Tf 100 Tz (Bobbs-Merrill) Tj /F2 12 Tf 100 Tz 0 -13.1 Td 3.13 Tw (made explicit that its decision did not address the use of) Tj 0 -13.1 Td .93 Tw (restrictions to create a license. ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. \() Tj (ªThere is no claim in this) Tj 0 -13.1 Td 1.14 Tw (case of contract limitation, nor license agreement controlling) Tj 0 -13.1 Td 1.2 Tw (the subsequent sales of the book.) Tj (º\)) Tj 11 -26 Td (4.) Tj 9 Tw ( ) Tj 1.2 Tw /F4 12 Tf 100 Tz (Economic realities of the transaction) Tj /F2 12 Tf 100 Tz 1 -26 Td 1.05 Tw (Finally, Vernor contends that ) Tj (ªeconomic realities) Tj (º demon-) Tj -12 -13.1 Td 3.71 Tw (strate that Autodesk makes ) Tj (ªfirst sales) Tj (º to its customers,) Tj 0 -13.1 Td .33 Tw (because Autodesk allows its customers to possess their copies) Tj 0 -13.1 Td 2.75 Tw (of the software indefinitely and does not require recurring) Tj 0 -13.1 Td .81 Tw (license payments. We held ) Tj /F4 12 Tf 100 Tz (supra) Tj /F2 12 Tf 100 Tz ( that neither of these factors) Tj 0 -13.1 Td 1.1 Tw (is dispositive. Vernor cites no first sale doctrine case in sup-) Tj 0 -13.1 Td .5 Tw (port of this proposition. Rather, he cites ) Tj /F4 12 Tf 100 Tz (In re DAK Indus.,) Tj /F2 12 Tf 100 Tz ( 66) Tj 0 -13.1 Td 1.9 Tw (F.3d 1091, 1095 \(9th Cir. 1995\), a case in which we inter-) Tj 0 -13.1 Td 2.42 Tw (preted the Bankruptcy Code to decide whether a particular) Tj 0 -13.1 Td .46 Tw (transaction should be considered a pre-petition sale. We com-) Tj 0 -13.1 Td 2.91 Tw (mented that ) Tj (ª[w]hen applying the bankruptcy code to this) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13884) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 77 0 obj 4124 endobj 75 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 68 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 76 0 R >> endobj %%Page: 23 23 79 0 obj << /Length 80 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.33 Tw 0 Tc (transaction, we must look through its form to the `economic) Tj 0 -13 Td .78 Tw (realities of the particular arrangement.') Tj 0 Tw ( ) Tj .78 Tw (º ) Tj /F4 12 Tf 100 Tz (Id) Tj /F2 12 Tf 100 Tz (. Nothing in ) Tj /F4 12 Tf 100 Tz (DAK) Tj /F2 12 Tf 100 Tz 0 -13 Td 1.2 Tw (is contrary to our reconciliation of ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( and the ) Tj /F4 12 Tf 100 Tz (MAI) Tj /F2 12 Tf 100 Tz ( trio.) Tj /F1 12 Tf 100 Tz 144.168 -26 Td (V.) Tj /F2 12 Tf 100 Tz -132.168 -26 Td .62 Tw (Although our holding today is controlled by our precedent,) Tj -12 -13 Td 1.85 Tw (we recognize the significant policy considerations raised by) Tj 0 -13.1 Td 1.2 Tw (the parties and amici on both sides of this appeal.) Tj 12 -26 Td 2.38 Tw (Autodesk, the Software & Information Industry Associa-) Tj -12 -13.1 Td .37 Tw (tion \() Tj (ªSIIA) Tj (º\), and the Motion Picture Association of America) Tj 0 -13.1 Td 2.52 Tw (\() Tj (ªMPAA) Tj (º\) have presented policy arguments that favor our) Tj 0 -13.1 Td 3.66 Tw (result. For instance, Autodesk argues in favor of judicial) Tj 0 -13.1 Td .14 Tw (enforcement of software license agreements that restrict trans-) Tj 0 -13.1 Td 2.1 Tw (fers of copies of the work. Autodesk contends that this \(1\)) Tj 0 -13.1 Td 1.21 Tw (allows for tiered pricing for different software markets, such) Tj 0 -13.1 Td .58 Tw (as reduced pricing for students or educational institutions; \(2\)) Tj 0 -13.1 Td 1 Tw (increases software companies' sales; \(3\) lowers prices for all) Tj 0 -13.1 Td 1.14 Tw (consumers by spreading costs among a large number of pur-) Tj 0 -13.1 Td 1.3 Tw (chasers; and \(4\) reduces the incidence of piracy by allowing) Tj 0 -13.1 Td .9 Tw (copyright owners to bring infringement actions against unau-) Tj 0 -13.1 Td 1.93 Tw (thorized resellers. SIIA argues that a license can exist even) Tj 0 -13.1 Td .15 Tw (where a customer \(1\) receives his copy of the work after mak-) Tj 0 -13.1 Td 1.27 Tw (ing a single payment and \(2\) can indefinitely possess a soft-) Tj 0 -13.1 Td 2.82 Tw (ware copy, because it is the software code and associated) Tj 0 -13.1 Td 1.74 Tw (rights that are valuable rather than the inexpensive discs on) Tj 0 -13.1 Td 1.47 Tw (which the code may be stored. Also, the MPAA argues that) Tj 0 -13.1 Td 2.83 Tw (a customer's ability to possess a copyrighted work indefi-) Tj 0 -13.1 Td 2.57 Tw (nitely should not compel a finding of a first sale, because) Tj 0 -13.1 Td 1.8 Tw (there is often no practically feasible way for a consumer to) Tj 0 -13.1 Td 1.2 Tw (return a copy to the copyright owner. ) Tj 12 -26 Td 5.55 Tw (Vernor, eBay, and the American Library Association) Tj -12 -13.1 Td 1.85 Tw (\(ªALAº\) have presented policy arguments against our deci-) Tj 0 -13.1 Td .44 Tw (sion. Vernor contends that our decision \(1\) does not vindicate) Tj 0 -13.1 Td .25 Tw (the law's aversion to restraints on alienation of personal prop-) Tj 0 -13.1 Td .42 Tw (erty; \(2\) may force everyone purchasing copyrighted property) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13885) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 80 0 obj 3653 endobj 78 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 68 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 79 0 R >> endobj %%Page: 24 24 82 0 obj << /Length 83 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F2 12 Tf 100 Tz 0 -8.4 Td 1.22 Tw 0 Tc (to trace the chain of title to ensure that a first sale occurred;) Tj 0 -13 Td .63 Tw (and \(3\) ignores the economic realities of the relevant transac-) Tj 0 -13 Td 3.42 Tw (tions, in which the copyright owner permanently released) Tj 0 -13 Td .17 Tw (software copies into the stream of commerce without expecta-) Tj 0 -13 Td .09 Tw (tion of return in exchange for upfront payment of the full soft-) Tj 0 -13 Td 1.15 Tw (ware price. eBay contends that a broad view of the first sale) Tj 0 -13 Td 2.33 Tw (doctrine is necessary to facilitate the creation of secondary) Tj 0 -13 Td .71 Tw (markets for copyrighted works, which contributes to the pub-) Tj 0 -13.1 Td 1.41 Tw (lic good by \(1\) giving consumers additional opportunities to) Tj 0 -13.1 Td 3.04 Tw (purchase and sell copyrighted works, often at below-retail) Tj 0 -13.1 Td .25 Tw (prices; \(2\) allowing consumers to obtain copies of works after) Tj 0 -13.1 Td 1.83 Tw (a copyright owner has ceased distribution; and \(3\) allowing) Tj 0 -13.1 Td 1.2 Tw (the proliferation of businesses. ) Tj 12 -26 Td .41 Tw (The ALA contends that the first sale doctrine facilitates the) Tj -12 -13.1 Td 1.1 Tw (availability of copyrighted works after their commercial life-) Tj 0 -13.1 Td 2.18 Tw (span, by ) Tj /F4 12 Tf 100 Tz (inter alia) Tj /F2 12 Tf 100 Tz ( enabling the existence of libraries, used) Tj 0 -13.1 Td .16 Tw (bookstores, and hand-to-hand exchanges of copyrighted mate-) Tj 0 -13.1 Td 1.21 Tw (rials. The ALA further contends that judicial enforcement of) Tj 0 -13.1 Td 3.52 Tw (software license agreements, which are often contracts of) Tj 0 -13.1 Td 1.1 Tw (adhesion, could eliminate the software resale market, require) Tj 0 -13.1 Td 2.25 Tw (used computer sellers to delete legitimate software prior to) Tj 0 -13.1 Td 3.21 Tw (sale, and increase prices for consumers by reducing price) Tj 0 -13.1 Td .38 Tw (competition for software vendors. It contends that Autodesk's) Tj 0 -13.1 Td .37 Tw (position \(1\) undermines 17 U.S.C. §) Tj 0 Tw ( ) Tj .37 Tw (109\(b\)\(2\), which permits) Tj 0 -13.1 Td 1 Tw (non-profit libraries to lend software for non-commercial pur-) Tj 0 -13.1 Td .88 Tw (poses, and \(2\) would hamper efforts by non-profits to collect) Tj 0 -13.1 Td 2.3 Tw (and preserve out-of-print software. The ALA fears that the) Tj 0 -13.1 Td 2.24 Tw (software industry's licensing practices could be adopted by) Tj 0 -13.1 Td 3.55 Tw (other copyright owners, including book publishers, record) Tj 0 -13.1 Td 1.2 Tw (labels, and movie studios.) Tj 12 -26 Td .16 Tw (These are serious contentions on both sides, but they do not) Tj -12 -13.1 Td .47 Tw (alter our conclusion that our precedent from ) Tj /F4 12 Tf 100 Tz (Wise) Tj /F2 12 Tf 100 Tz ( through the) Tj /F4 12 Tf 100 Tz 0 -13.1 Td 2.47 Tw (MAI) Tj /F2 12 Tf 100 Tz ( trio requires the result we reach. Congress is free, of) Tj 0 -13.1 Td .7 Tw (course, to modify the first sale doctrine and the essential step) Tj 0 -13.1 Td 2.63 Tw (defense if it deems these or other policy considerations to) Tj 0 -13.1 Td 1.2 Tw (require a different approach.) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 156 -136.5 Td 1.1 Tw 0 Tc (13886) Tj 90.7449 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) Tj ET Q q 1 0 0 1 0 792 cm 0 G .5 w 156 -140.25 m 456 -140.25 l s Q endstream endobj 83 0 obj 3717 endobj 81 0 obj << /Type /Page /MediaBox [0 0 612 792] /Parent 68 0 R /Resources << /Font << /F1 6 0 R /F2 7 0 R /F4 9 0 R >> /ProcSet 1 0 R >> /Contents 82 0 R >> endobj %%Page: 25 25 85 0 obj << /Length 86 0 R >> stream q BT 0 Tr 0 g 1 0 0 1 156 643.5 Tm /F1 12 Tf 100 Tz 141.834 -8.4 Td 1.2 Tw 0 Tc (VI.) Tj /F2 12 Tf 100 Tz -129.834 -26.2 Td 3.58 Tw (The district court did not consider Vernor's claim that) Tj -12 -13.2 Td .53 Tw (Autodesk misused its copyright. Copyright misuse is an equi-) Tj 0 -13.2 Td 1.67 Tw (table defense to copyright infringement which precludes the) Tj 0 -13.2 Td 2.9 Tw (copyright holder's enforcement of its copyright during the) Tj 0 -13.2 Td 1.77 Tw (misuse period. ) Tj /F4 12 Tf 100 Tz (See Practice Mgmt. Info. Corp. v. Am. Med.) Tj 0 -13.2 Td 2.6 Tw (Ass'n) Tj /F2 12 Tf 100 Tz (, 121 F.3d 516, 520 n.9 \(9th Cir. 1997\). The district) Tj 0 -13.2 Td 1.3 Tw (court reasoned that a misuse defense would not benefit Ver-) Tj 0 -13.2 Td .03 Tw (nor since he prevailed on copyright infringement below. Since) Tj 0 -13.2 Td 1 Tw (we reverse the district court's grant of summary judgment in) Tj 0 -13.2 Td .8 Tw (Vernor's favor on copyright infringement, we remand for the) Tj 0 -13.2 Td 1.75 Tw (district court to consider Vernor's copyright misuse defense) Tj 0 -13.2 Td 1.2 Tw (in the first instance.) Tj /F1 12 Tf 100 Tz 139.5 -26.2 Td (VII.) Tj /F1 12 Tf 100 Tz -127.5 -26.2 Td .58 Tw ([11]) Tj /F2 12 Tf 100 Tz () Tj 3 Tw ( ) Tj .58 Tw (We vacate the district court's grant of summary judg-) Tj -12 -13.2 Td 2.37 Tw (ment in Vernor's favor and remand. We hold that because) Tj 0 -13.2 Td .89 Tw (CTA is a licensee, not an owner, the ) Tj (ªsale) Tj (º of its Release 14) Tj 0 -13.2 Td .3 Tw (copies to Vernor did not convey ownership. Vernor is accord-) Tj 0 -13.2 Td .2 Tw (ingly not entitled to invoke the first sale doctrine or the essen-) Tj 0 -13.2 Td 1.14 Tw (tial step defense, on behalf of his customers. We remand for) Tj 0 -13.2 Td 3.26 Tw (further proceedings consistent with this opinion, including) Tj 0 -13.2 Td 1.2 Tw (consideration of Vernor's copyright misuse defense. ) Tj /F1 12 Tf 100 Tz 12 -26.2 Td (VACATED AND REMANDED.) Tj 1 0 0 1 0 792 Tm /F2 11 Tf 100 Tz 428.5 -136.5 Td 1.1 Tw 0 Tc (13887) Tj -181.7551 0 Td (V) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (ERNOR) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw ( v. A) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (UTODESK) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (, I) Tj /F2 7.7 Tf 101.2 Tz .79 Tw (NC) Tj /F2 11 Tf 100 Tz 0 Ts 1.1 Tw (.) 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