First Sale Doctrine Goes to the Supreme Court

When I started Openspace Store I had a grand vision to change the Terms Of Use (TOU) document that is part of the sales process for all app stores. The First Use Doctrine effects the first sale of any app/song/video/book and our modifications to the TOU made it very clear that the copyright holder was supporting the resale/gifting/lending of their copyrighted material. For those of you not up your copyright law, the first-sale doctrine is the rule adopted by the Supreme Court, in 1908, and basically says that once a copyright holder sells a copy of his work, the buyer is free to resell that copy (or rent it or give it away) as he sees fit. This doctrine is being tested YET again today by the Supreme Court. As you can imagine the copyright holders are on one side Vs. the marketplaces that profit from the current doctrine on the other. Marketplaces include players like: eBay, GameStop and Goodwill, but it also includes libraries.

We modified our Terms of Use Document to avoid and explicitly grant appropriate permission. This way a level of transparency between the copyright holder and the purchaser was clearly identified, prior to first purchase. Below are the sections of the TOU that reflect these rights. I would suggest looking closely at section 5.2 sales.

5.1           Purchases. 

  • (a)            If You are a Registered User, You will be provided with the opportunity to make purchases of licenses and other rights to access and use Software, Content and other Products through the online marketplace operated by OpenSpace through the Service (“Purchases”).  In addition to this Agreement, each Purchase will be subject to any additional terms or conditions applicable to the Purchase provided or displayed in connection with the Purchase (“Additional Terms”).  All Purchases are final and are not subject to exchanged or refund.
  • (b)            Unless otherwise expressly stated in any Additional Terms that You may enter into (or may have entered into) with OpenSpace or its Affiliates applicable to a Purchase, all Purchases of Software, Content or other Products through the Service provide You with a personal, limited, non-exclusive, non-sublicensable, non-transferable (except as set forth herein) license to the Purchased Software, Content or other Product solely use in accordance with the following conditions:
    1.  You may download a single copy of the Software, Content or other Product from the Site.
    2. You may install and use the Software, Content or other Product on an unlimited number of OpenSpace-authorized devices owned by You.
    3. You may use the Software, Content or other Product solely for Your own personal, noncommercial purposes.
    4. You may not transfer, sell or otherwise convey the Software, Content or other Product (or any rights therein) except as expressly set forth in this Agreement.
    5. You will otherwise use the Software, Content or other Product only in accordance with this Agreement and any Additional Terms.
    6. Your license to the Software, Content or other Product will terminate immediately upon any breach by You of the terms of this Agreement.
  • Unless expressly stated in any Additional Terms applicable to a Purchase, You are granted no licenses or other rights, whether by implication, estoppel, or otherwise, in or to any Software, Content or other Product or any Intellectual Property Rights (as defined below) therein or related thereto other than as expressly set forth in this Section.  You will not and will not allow any third party to, modify, copy or reproduce, perform, display, modify, create derivative works from, decompile, reverse-engineer, disassemble, attempt to derive the source code of, republish, post, transmit, sell distribute, sublicense, or in any way exploit any Software, Content or other Product (or any portion thereof).  Upgrades or updates (if any) to any Software, Content or other Products will be governed by the terms of this Agreement, unless accompanied by any Additional Terms.

5.2           Sales. 

  • (a)            If You are a Registered User, You will also be provided with the opportunity to conduct sales or transfers of the licenses or other rights to access and use the Software, Content or other Products you have Purchased through the online marketplace operated by OpenSpace through the Service (“Sales”).  In addition to this Agreement, each Sale will be subject to any applicable Additional Terms.  All Sales are final and are not subject to exchange or refund.
  • (b)            Unless otherwise expressly stated in any Additional Terms that You may enter into (or may have entered into) with OpenSpace or its Affiliates applicable to a Sale, all Sales of any Software, Content or other Products must be conducted in accordance with the following conditions:
    1. All Sales of any Software, Content or other Product must be conducted solely through the Service.
    2. No Software, Content or other Product may be sold, transferred, distributed or otherwise conveyed through any means other than the Service.
    3. Upon any Sale You may not make any further use of the Software, Content or other Product subject to the Sale.
    4. Upon any Sale You will delete all copies of the Software, Content or other Product subject to the Sale made by You or otherwise in your possession or control.
  • Following any Sale You will retain no right, license or other interest in or to the Software, Content or other Product subject to the Sale or any Intellectual Property Rights therein or related thereto.

6.              OWNERSHIP.  All Software, Content and other Products available or accessible through the Site or Service are protected by the intellectual property rights of OpenSpace and its partners, affiliates, and licensors (“Affiliates”), including, as applicable and without limitation, copyrights, trademarks, patents (and patent applications), trade secrets and other proprietary and intellectual property rights (“Intellectual Property Rights”).  All Software, Content and other Products are licensed, not sold, to You under the terms of this Agreement.  As between You and OpenSpace, all Software, Content and Products, and all Intellectual Property Rights therein and related thereto, are and will remain the sole property of OpenSpace and its Affiliates.  Use of any Software, Content or other Products other than under the express terms of the licenses granted under this Agreement will result in an infringement or misappropriation of the Intellectual Property Rights in the Software, Content or other Products.  OpenSpace reserves (on behalf of itself and its Affiliates) all rights not expressly granted to You under this Agreement.

7.              FEES AND PAYMENT.  You agree to pay all fees applicable to each Purchase as specified on the Site or through the Service in connection with that Purchase (“Fees”).  All Fees will be due and payable at the time of Purchase.  You grant OpenSpace (or a company chosen to act on behalf of OpenSpace) authority to charge or debit the credit card, debit card, bank account, online payment account, mobile payment account, or other payment method You provide in connection with Your Account or any Purchase for any Purchase You make on the Site or through the Service.  All Fees will be non-refundable once paid to OpenSpace (including upon any termination or suspension of this Agreement).  Purchases and Sales may be subject to additional fees or charges stated on the Site which are also non-refundable and You agree to pay all fees or charges incurred by You in connection with any Purchase or Sale.  Until paid in full, all past due amounts will bear an additional charge of the lesser of 1½% per month or the maximum amount permitted under applicable law.  OpenSpace may change any portion of the Fees by posting the changes to the Site or otherwise notifying You through the Service.  Such changes will take effect as to any Purchase occurring after such notice by OpenSpace.  If OpenSpace requires use of collection agencies, attorneys, or courts of law for collection on Your account, You will be responsible for those expenses. You will be responsible for all use, sales, and other taxes imposed on the Service provided under this Agreement.

If you’re interested in reviewing the remainder of the Terms Of Use document send me a note and I will happily share it.

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