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Software Imports – A Grey Area?

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I'm no fan of Microsoft, and I'm also no lawyer, but I agree with some of the commentators - the Tesco/Levi case doesn't bear on Microsoft at all. I
honestly think you're spinning your wheels, if that means what I think it means.

The Tesco lawsuit was about European law on importation of trademarked goods from outside Europe, using the trademark. Whether Tesco could legally buy
Levi jeans in the U.S., yank the trademark label off them, and _then_ sell them, I don't know. I suspect that unless they did it in secret, and never
admitted that these were in fact Levi jeans, they'd still be trading on the strength of the Levi name and therefore infringing European trademark law -
right or wrong. For all I know, it may be technically illegal for Levi jeans to be sold second-hand by Oxfam.

For that matter, denim is named after a place in France. We might suppose that it would be quite easy to design and manufacture jeans of equivalent quality to Levi's to sell at a fraction of the price. The only missing value is the theoretical fashion statement of the brand name. And Asda supermarkets have their own clothing brand-name, George.

How far we should go anyway into taking menial jobs from British or European workers and sending them to much poorer countries with lesser workers' rights is not a simple question, so I'm going to note and then ignore it.

But Microsoft doesn't sell goods, they sell a service - the service of being allowed to use their copyrighted software - and it can only be used on the terms of their licence. Their packs of OEM software state in the licence agreement, I think, that it's only valid when sold with a new PC. So if you buy an OEM pack on its own, it will work but - according to Microsoft - you don't legally own a licence.

It's possible that this and other licence conditions are not enforceable or binding. Obviously Microsoft would prefer that they were. And, in fact, it
seems that they prefer to do without OEM packs at all - they just allow PC manufacturers to buy licences, without software disks at all, as PCs are shipped out. This way, in the scenario where the PC company goes bust, it isn't holding a stock of licences to sell on.

Likewise - perhaps - Microsoft could sell OEM packs and licences tied to a particular supplier's retail business, so that the packs are not legally
valid for anyone else. Indeed, Microsoft thinks this is what it's already doing.

For that matter, restrictions that the law doesn't provide, Microsoft can probably implement through future versions of their famous Product Activation. Buying Microsoft software can require entering into a direct relationship with Microsoft - already implicit, since Microsoft itself owns the software which is installed on our hard disks - a relationship which will be conducted according to their whim. How about pay-per-view software?

Robert Carnegie
Glasgow, Scotland




Quite a different result would be reached in the United States, under the Supreme Court's interpretation of the "first sale" doctrine. Once an article is placed into the stream of commerce (regardless of locale), the exclusive copyright (and by implication, trademark) holder cannot seek protection from the importation and sale of grey market goods.


See Quality King v. L'anza The holding is in line with the common law rule against restraints on alienation.
I was curious as to the basis of the Tesco opinion, whether this was based in public policy (e.g. protectionist economic rationale), anti-dumping statutes, or common law.

If there's a direct link to the opinion, I would greatly appreciate it! Regards,
Ed Korzeniowski

Many thanks to Reg readers who came up with a fine selection of links:-

The EU judgement can be found at here and here. As backgrounders, the Advocate General's opinion is online here and there's a nice FAQ here. Particular thanks to Paul Dundas, Chris Winter and Roy Bratin for the links. ®

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