eBay Reseller of OEM Software Denied First Sale Defense

By Zi Wang In Adobe Sys. v. Hoops Enter. LLC (N.D. Cal. 2012), the court rejected the first sale defense asserted by an eBay reseller of original equipment manufacturer (OEM) copies of software, drawing a distinction between licenses and sales of copyrighted works. Adobe sued the defendants for copyright infringement, alleging that the defendants sold OEM copies of Adobe software through the use of eBay and other websites.  The defendants countersued Adobe for a declaratory judgment of copyright misuse.  In particular, the defendants contended that Adobe’s assertion of copyright protection contravened the first sale doctrine, as codified in 17 U.S.C. § 109.  The defendants also asserted the first sale doctrine as an affirmative defense. The defendants obtained OEM copies of Adobe software that had been unbundled from the hardware with which they were originally packaged, such as Dell and Hewlett-Packard computers.  The defendants then re-bundled the software with items such as a piece of photo paper, a blank DVD, or

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Supreme Court Extends Exhaustion Doctrine

Supreme Court Finds Sale of Device Extends Patent Exhaustion to Unlicensed Method Claims   In Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. ___; 86 USPQ2d 1673 (June 9, 2008), the Supreme Court held that the doctrine of patent exhaustion applies to unlicensed patented methods used by a sold patented device and that LG’s sale of such devices to Intel, who then sold such devices to Quanta, exhausted LG’s patent rights against downstream purchasers.  The unanimous decision, authored by Justice Thomas, overruled the decision by the Federal Circuit which had held that method patents were not within the scope of the patent exhaustion doctrine.