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Re: Software Imports - A Grey Area?

see also...

Grey software is not black and white
This is what Microsoft said about grey imports in 1998
The Tesco ruling - what does it mean for grey MS software?

I continue to read The Register with interest.

Of late I read your article "Software Imports - A Grey Area", it brings to light many interesting aspects of grey imports. I note your disclaimer not to be a lawyer, nor am I. However, I work in the patent and trademark area and would refer you to a previous e-mail I sent (following on).

In it I disclaimed my opinion saying that I had not read the ruling of Adobe v Softman in detail, I have subsequently had the chance to do so, and the Central District Court of California has just handed down a ruling that is of potentially devastating to software house's shrinkwrap licences and their right to control the points of sale. This decision in direct opposition to the ruling from the ECJ in Tesco v Levi's.

Further, the Tesco v Levi's case does bear on Microsoft (and for that matter all other software vendors) as it allows them to control the point of sale. Applying this to a commercial transaction Microsoft would be allowed to stop a hardware vendor with a dubious reputation or simply one they did not like (perhaps because they sold dual boot systems, or included Netscape Navigator) from selling their software as part of a computer/software bundle because it was detrimental to their commercial reputation, ie. Microsoft would not want their goods to be associated with "bargain basement computer systems".

Robert Carnegie is wrong to distinguish between the sale of goods and the provision of services in his otherwise excellent letter, both are covered by trademarks. Further, copyright material is viewed as property, specifically "a close (thing) in action". Ed Korzenowski provides the common law doctrine for the beginning of Adobe v Softman decision.

Chris Winter

Chris' earlier email should have made the postbag last week, but didn't because I goofed. It puts the Tesco ruling in the case of the Adobe bundling case, and raises some valuable points. Here it is:

You might like to draw attention to the fundamentally different approach the court is taking in this case to the ruling of the ECJ in the Levi's v Tesco and Davidoff v A&G imports cases. In the latter Tesco argued that as there were no restrictions on the wholesaler from which they purchased the jeans (the exact opposite of an EULA) Levi's had given implied consent for anyone to resell their jeans wherever they saw fit. The ECJ ruled their was no implied consent and that Levi's were free to control the point of sale. This places considerable restraint on trade, generally an undesirable effect.

Applying this to the Adobe v Softman case the ECJ would hold in the EU that not only was there not implied consent but that the explicit lack of consent specifically prevented the resale of Adobe products. This is a superficial examination as these decisions often turn on the precise facts of the case but regardless of the precise details this appears to represent a fundamental difference of approach.

Unusually the pro-IP rights decision comes from the EU and the more liberal approach from the US.

Chris Winter

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