Does fair use apply?

As I’ve mentioned before, this idea has occurred to book publishers -- many times, in fact. They thought of it at least as early as the 1800s, which is why we have more than 100 years of court decisions affirming the “first sale” doctrine of copyright law. Once the publisher has sold a copy of a book or other copyrighted work, first sale says purchasers may do whatever they please with their copy except make a copy of it. Time and again, courts have ruled that notices printed in a book prohibiting its resale; mandating the price it can be sold for; or limiting where, when, or to whom it can be sold are not binding on the purchaser.

Let’s pause here to address a few readers' objection to the software-book comparison. They understood and agreed that a pure consumer product such as TurboTax ought to be treated the same as books or other copyrighted products, but they worried about software licensing in business-to-business transactions. For example, what about when one software company licenses technology to another? Am I saying that the licensing company can put no contractual restrictions on how its technology is used or to whom it might be sold?

No, of course not. But the very fact that the question comes up shows the absurdity of treating consumer software purchases as a form of licensing when they are as ordinary as a book purchase. A real license involves a real contractual relationship with terms and limitations both parties understand up front, not a hidden list of restrictions you can’t even see until you've made the purchase. Book publishers also used to claim their products were “licensed, not sold,” but that didn’t make it so. And Intuit's not wanting TurboTax customers to pass along their CDs also doesn’t make doing so piracy.

The software business and the book business are very different, and the same can be said for the movie, music, TV, radio, and computer magazine businesses. Yet can anyone doubt that, one way or another, digital technology is going to change how we do business with our customers? Sooner or later, a common set of rules will exist. Maybe those rules will include the fair use and first sale principles we’ve taken for granted for so long, or maybe the rules will be hidden away in sneakwrap licenses and enforced by digital rights management technology. We have a choice. What’s at stake is how free we are to share information, which means what’s at stake is how free our society really is.