"Network Guy" <networrk@doit.com.no> wrote in message
news:3F17B827.4080200@doit.com.no...
Anyone dealing in used equipment should be familiar with this. Cisco is
on shaky legal ground when it comes to declaring that their software
licenses are non-transferable. There is a huge amount of used
software that is sold, quite above the board, and many software
publishers explicitly permit the users to sell their used software,
assuming that all _original_ media and manuals are transferred over,
and the original purchaser certifies that they have deleted all
copies of the software.
What we really need is a case taken to the US Supreme Court on
shrink-wrap licenses, to get some precedent set. Unfortunately,
none of the software publishers (including Cisco) have ever elected
to sue anybody who has purchased a used software license, and
received all the paperwork/magic key/etc. that was originally
included, as a result of this, there's no case to set precedent. Some
people might say this is intentional, as they know that shrink-wrap
licenses would be invalidated.
The situation is very similar to selling a used book. The Copyright
laws are used to make it illegal to make copies of a book and sell
those, unless you own copyright on the book. However, used
bookstores abound, and the courts have held that it's fine to sell
used books, despite the fact that there's no question that when
someone buys a used book, they take away revenue from the
book publisher who originally published the work, because
the buyer isn't buying a new copy of that book.
Similarly, the Copyright laws are used to make it illegal to make
copies of software and sell them, unless you own copyright on the
software itself. And there are many venues, Ebay not the least,
where people do indeed sell used software licenses. What is
missing is the SPA and the BSA have decided not to allow a
court case to happen that would rule that it's fine to sell used
software, despite the fact that there's no question that when
someone buys a used software license, they take away revenue from
the software publisher who originally published the work.
This lets them run around and claim that you cannot transfer
software license, while at the same time using the very same
copyright laws to protect their products that the book publishers
use to protect their products, laws that permit people selling
used books.
I'm sure most people in this forum are intelligent enough
to see the legal problem here. Just keep in mind that
while Cisco may be blowing air about it being illegal to
transfer the license, it is most definitely illegal to transfer any
_service contract_ that the router may have been under,
and THAT has court precedent.
Ted Mittelstaedt
Author of a book, which is legal to sell used, and when done
so, reduces royalties to him.
"Walter Roberson" <roberson@ibd.nrc-cnrc.gc.ca> wrote in message
news:bfbvve$ekf$1@canopus.cc.umanitoba.ca...
Ah! Someone with an intelligent response for a change!
The obvious counter to this argument is that the Internet today has
tremendously blurred the difference between a retail store and
a reseller. There's plenty of places online such as Datacomm
Warehouse/Microwarehouse that sell Cisco routers online, anyone
can buy them with a credit card. And to claim that Microwarehouse
is a VAR is a joke. They may label themselves as a Cisco reseller
but they aren't going to send people out to install the product and
or fix products on your network the way a real VAR would.
A plantiff would be hard-pressed in a court to make a solid definition
of the difference between a retail store and a reseller. Once upon
a time there was such a difference, and also once upon a time
you could only purchase IBM PC's from an IBM reseller. No
longer.
Also, some Cisco products (ie: the 600 series DSL CPE, the
Cisco 827) are OEM'ed to Telephone companies who sell them
to DSL subscribers. This is pretty much a retail transaction as
well. Telephone companies are not resellers.
And then of course, Cisco just purchased Linksys. In the past,
Cisco has been quick to re-brand products of acquired companies
with the Cisco name. If you read the interview with Cisco on this:
http://newsroom.cisco.com/dlls/hd_032003.html
the branding question is raised. Cisco's answer is facinating because
while it confirms they are going to use the Linksys brand name
going forward, they make no commitments that they are NOT
going to also use the Cisco name on Linksys products. And to
be frank it would be totally stupid not to do so, because it would
be of enormous advertising value to Cisco.
I would say that a Cisco lawyer that attempted to use this line
of reasoning would be a fool. It would not be that difficult to
cast serious doubt on this, there are just too many exceptions.
And worst of all, if something like this WAS accepted by a court,
it would forever bar Cisco from competing in the retail space, because
the second they decided to start selling stuff by retail, it would
undercut the legal underpinnings on the IOS license nontransferability.
Networking is becoming more and more prevalent, and the
idea that Cisco is never going to sell retail I think is false.
I have no argument over the IPSec licenses and such. All that is
export controlled and of course those licenses are going to be
treated differently.
This sidesteps my earlier point. Used software that is sold on venues
like Ebay, is shrinkwrap software. The shrinkwrap license on it
does not allow transfer either. So far there's no evidence that
the major software houses are going after the practice of selling
used ones of these licenses as well.
When I was referring to a court precident on shrinkwrap licenses, I
really wasn't using good terminology. The issue really is what limits
are fair for a software developer to set on a software license. That
is where there is a real lack of caselaw that would apply to most
situations.
Also I think your court case was a ruling on _using_ the product, not
transferring it by selling it to someone else. I would suspect the
purchaser was attempting to be able to legally make multiple
copies of software (perhaps even for his own use) not attempting
to sell a previously purchased package. (you didn't cite the case
so I can look it up, unfortunately)
Consider another scenario. Defendent buys a Pentium 200 from Dell
that comes with Win95 OEM preloaded. They later sell the system,
and include the Win95, and replace it with a new Dell system with
XP preloaded.
Now, per the letter of the license, that copy of Win95 is not permitted
to be transferred, even if included with the original equipment. So,
Microsoft could file a lawsuit against either the seller or purchaser or
both, claiming a licence violation. But I think anyone would be dreaming
if they thought a court is going to rule in favor of Microsoft in this
instance.
And consider one more scenario. Take the Cisco 1005 router. This
router is still usable today. BUT, Cisco dropped
support for the 1005 in IOS 12.2. Today, Cisco DOES NOT SELL
either new or relicense IOS licenses for the 1005. So what is
Cisco telling people who are inquiring about
getting legal on that used 1005 they bought?
Now, the 1005 is small potatos, they didn't sell that many of them.
But it is only a matter of time before the 2500 is no longer supported
and licenses won't be available for it. And that was one of the most
popular routers.
How do you think a court would rule if Cisco attempted to sue
someone who purchased a used 2501, and a used IOS license
for a 2501, from the seller, specifically because a 2500 IOS
license was UNAVAILABLE from Cisco? Yet, the router itself
works perfectly fine? I really don't think such a lawsuit would
ever be filed, despite the fact that the mere existence of a whole
shitpile of used 2500's out there, cuts into the sales of the new
routers, like the 1700s.
This is quite true. However the hole here is that in many routers - the
1600 series for example - the original media is hardware itself, that goes
with the router when it's sold. In short, the purchaser of the used device
is NOT making a copy of the firmware from the media to the router, because
espically in the run-from-flash routers, the distribution media is an
integral
part of the router.
And also this one again sidesteps the issue. The issue isn't copying
software,
the issue is transferring the right to USE the software. In many of the
routers, using the existing software that is in the router does not require
that
the end user make a prohibited copy. And when the seller sells the used
router, if their only copy of the software is on the media, and the media is
an integral part of the router, it is obviously impossible for the seller to
retain a copy of the software, thus the seller isn't "copying the software
and
giving the copy of the software to the buyer"
And as far as arguing that the user is copying the software from the media
to the RAM, not only does this not apply in the case of a device like the
1601 (non-R) unit, but even in the 1601R units, the copy from the media
to the RAM is being done without the user's control, by the device itself.
Once again, while the "copying" argument has validity when trying to
stop ROM piracy, this is a sale of a non-pirated, used ROM. It's not
a copy.
Agreed.
What all this really boils down to is a question of damages to Cisco.
Clearly, it costs a lot of money to write IOS. Cisco has chosen to
reduce the price of their routers by selling IOS license separately,
and charging more money for IOS that has more features in it,
with the idea that it costs more to write the additional features,
thus the people that want those features are going to have to pay
more. Because they are using this pricing model, they have an
interest in preventing people from just buying the router, then making
a copy of the expensive IOS, perhaps from a router they already
have.
Additionally, since new IOS release trains have more features, Cisco
has an interest in preventing people from copying IOS from successive
release trains.
So far so good, nobody can argue about this (at least, reasonably)
Where I see Cisco as being on shaky legal ground, is that their
emphasis on licensing for used Cisco gear is twofold. First, it is
to get paid multiple times for the same thing. For example, someone
buys an Enterprise license and pays Cisco $2000, well 2 years later
Cisco wants another $2000 when the router is sold. Yet the IOS code
running on the router is the same code as 2 years earler, Cisco didn't incur
a nickel of costs for it, and they were already compensated by the
first buyer. Second, it is to artifically adjust the costs
of used gear, to make it less of a cost benefit to the customer. Just look
at
the pricing for IP-Only used licensing for a Cisco 1600. Originally,
when the IP Only IOS was purchased new for the 1600, it cost
$15. Today, a relicense (part # LL16RC=) for IP Only costs
$200. And once again, this is for the identical code.
This is a perversion of the intent of the copyright laws. Copyright
law was enacted to assist people to make money from the efforts
of their labor creating something. It was not enacted to help people
create something then have them and their descendents live off the
residuals forever. It was also not enacted to permit companies
to create perpetual-motion machines that just generate cash,
with no effort, forever.
With used equipment, Cisco has already got compensated for their
efforts to construct the device, by the original purchaser. They
already got compensated for their efforts to write the software, by
the sale of the original IOS license. They are not owed a perpetual
cash flow by the rest of the world, just because they happened to
create something that lasts a bit longer than they would like.
It would be like if the automakers were permitted to collect a
cash bounty from everyone who purchased a used car, to make
the prices of the used cars the same as the prices of new cars,
so that the existence of used cars didn't impact their sales of new
vehicles (which clearly they do)
Cisco is certainly entitled to collect ongoing revenue from people who
continue to update their routers to the latest IOS code. They have
a mechanism to do this, with service contracts. But the pricing on
IP Only relicensing for older routers is atrocious, and Cisco cannot make
one
cogent argument for deserving to be paid multiple times for the same
software license, just because someone stops using their router and
sells it used. Neither can any other software developer, which is
why none of them, Cisco included, are suing anyone over this.
My personal opinion is that if someone buys a used Cisco router, and
the seller sends them not only the used router, but the paperwork and
box that is the shrinkwrap license, then I consider them licensed, period.
Naturally, licensing doesen't equal rights to obtain newer firmware,
and more importantly, most used Cisco routers on the market (at least
the ones that I have bought) do NOT come with the shrinkwrap license
box. Those of course, must be considered unlicensed, and the proper
license purchased for them.
Ted
