Do software customers have any rights at all under the law, or does the industry's claim that its products are Licensed, Not Sold give software companies carte blanche? That is the real question raised by the case of Wall Data vs. the L.A. County Sheriff's Department.
Over the last week I've been telling the story of how the sheriffs came to be found guilty of copyright infringement over their use of Wall Data's Rumba terminal emulation program in county jail facilities. It's a tale filled with ghostly images and broken trust, so if you haven't been following it you might want to catch up with the first and second episodes before continuing with this narrative.
Wall Data based its case on the indisputable fact that the sheriffs had made more copies of Rumba than it had licenses for. But the sheriffs argued that, since those extra copies were unusable under their network security system, the copies were legal under the fair use and essential step principles of copyright law. Had that defense gotten a true hearing, this case might have provided some landmark clarification of the rules, no matter which side won. Unfortunately, that's not what happened.
Instead, the real focus of the original trial was the EULA. Since the Rumba CDs were supposed to come with a shrinkwrap end user license agreement (although it's not clear if the EULA was actually there), the plaintiffs argued that the sheriffs were prohibited by the EULA from making the extra copies. Ironically, the Wall Data EULA was actually rather ambiguous on this point, since its basic license grant allowed use of the software "on a single Designated Computer for which the software has been activated," and the sheriffs argued that the unused copies obviously were not activated. But the plaintiffs' overall interpretation of the EULA prevailed. Even if, as the defense contended, Wall Data employees had given oral permission to make the extra copies, the plaintiffs said it made no difference because the EULA "specifically provides that any statements by employees are not to be relied upon."
In the end, though, the most important thing about the EULA was simply its existence. Because Rumba had a license agreement, the plaintiffs argued, the sheriffs had purchased "licenses" of the software, not "copies." This may not seem like all that important a distinction to you, but it was central to the courts deciding that the sheriffs did not have the rights under copyright law that they were claiming.
As I discussed last week, the Ninth Circuit, in which jurisdiction this case fell, is home to the discredited MAI vs. Peak decision. In that case the court stated baldly that if software is licensed, the customer is not the "owner of a copy" and therefore not entitled to the protections of Section 117 of the Copyright Act.
In reviewing the Wall Data case, not only did the Ninth Circuit affirm this principle, it added the rather perverse doctrine that the more severe the restrictions imposed by the license, the more clearly the customer does not qualify to be the owner of a copy. Well, as maybe the foremost expert around on nasty license terms, let me just assure the court that they are unlikely to find any commercial software with less severe terms than the rather mild EULA Wall Data used. So far all intents and purposes, it would seem like the court's ruling makes Section 117 a dead letter. Talk about judicial activism, where are the far-right fanatics when we need them?
But, in my not-so humble opinion, there's something even stranger about this case. If the license agreement is all that matters, why is it a copyright infringement case at all? At heart, this case is really a contract dispute, so why isn't this a breach of contract lawsuit instead? Well, that would have allowed the defense to bring in a lot of evidence - including LA. County's master vendor agreement with the re-seller who actually sold them Rumba - that the original judge excluded because it might "confuse the jury" to hear that side of the story. Pretty amazing. But just what kind of legal system are we living in -- at least here in Ninth Circuit territory -- where software customers don't have the right to fight a charge of copyright infringement with the rights Congress explicitly gave them in the copyright statutes?
So that's my take on the case of Wall Data v the Los Angeles County Sheriffs. Now, finally, you get to be the judge. Post your comments on my website or write me directly at Foster@gripe2ed.com.
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