Unfallen_Satan / Member

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Is the way software companies sell licenses these days legal?

I haven't thought this through fully, but I better put something down before I forget. I want to investigate it further. This deals with the apparent contradiction between the physical copy of a software (the actual program in the user's possession) and the user's license to use said software.

The following excerpts are from Sony PSN's new Terms of Service and User Agreement (accessed on my PSP while entering the Playstation Store on Sep 29, 011:

"You are solely responsible if you do not choose to download or access the content before it is removed and for ongoing storage and safekeeping of the content. SNEI is not obligated to provide you with replacement copies for any reason." (Section 6, Paragraph 4)

"Except as stated in this Agreement, all content and software provided through Sony Online Services are licensed non-exclusively and revocably to you... solely for Your personal, private, non-tranferable, non-commercial, limited use on a limited number of Authorized Devices in the country in which your account is registered." (Section 7, Paragraph 1)

"Your compliance with all of the following are express conditions of Your license to use or access the Property. You may not sell, rent, lease, loan, sublicense, modify, adapt, arrange, translate, reverse engineer, decompile, or disassemble any portion of the Property... Property is not licensed to you for resale, public performance, display, distribution or broadcast." (Section 7, Paragraph 2)

Of course, all transactions with and all payments to SNEI are final and non-refundable, as specified at several places in the agreement. Also note here that "Property" refers to any and all components of Sony's software and hardware.

This is what it means from a contractual POV, if I understand it correctly. If I purchased a game from the PS Store but didn't download it right away and Sony decided to remove the game the next day, I would be out of luck. On the other hand, if I were to allow my friend to borrow my PS3 GTA IV to play for a while without consulting Sony first, I would violate of the Terms of Use and Sony would be well within its rights to revoke my license to all Playstation games. If I uploaded a video of my gameplay of GTA IV to YouTube without consultation, I would be in violation. Heck, depending on how strictly you interpreted the last sentence in my quote of Section 7, Paragraph 2, just by showing a group of friends my gameplay of GTA IV in my house, without receiving explicit permission from Sony first, would probably be a violation.

I have some questions about the situation:

1. What exactly am I paying for when I make a purchase from Sony? Am I paying for 1 digital copy of the software? Obviously if I can't get another copy from Sony, I can't get it again since I am not permitted to make reproductions of the "Property" and no one else is legally permitted to distribute it. Am I paying for a license to use the said software? Or am I paying for one digital copy and limited use of that 1 copy? I consider a single copy of software a physical item. Is it even legal to sell a product, or "Property" in this case, restricted by both one physical copy and limited license?

2. What is the length of the license that I purchase from Sony? Is it up to the end of my natural life? A specified amount of time? Or whatever Sony decides, which in theory could be anything from days to years? This ties closely to my first question. The answer could be for as long as I have my one copy of the "Property." If that were the case, how is one copy of the "Property" different from, say my textbook or my car? Why then are they not licensed?

My main issue is whether it is even legally permissible to license a physical product. I am not picking on Sony specifically. However, its Terms of Use brought up for me for the first time the idea that software may be considered a physical product. Something similar exists elsewhere. For example, EA Terms of Use specifically states all its products are AS IS and it makes no guarantee of any kind with regards to availability. I have read online that the code for some of Borderland's DLC can only be used to download the DLC once. In all these cases, the contract basically says I get what I pay for one time. The company may or may not provide continuing support at its discretion. That doesn't sound like something that can be licensed, but I am not an expert in legal theory. Yet.

Looking at the other side of the coin, I am not saying these big software companies are tricking consumers into these incredibly unbalanced contracts and then exploiting them. In the vast majority of cases, many provisions of these agreements are not enforced. However, I do not believe this is a good way to practice law and make contracts. The better choice is draft more fair, more understandable, but also enforceable Terms of Use so that the user knows exactly what he's getting into and is encouraged to abide by them.

I think this issue first came to the limelight during the turn of the Millennium during the drafting of the Digital Millennium Copyright Act. It was a huge deal in those days. I was too young to care about it then, but even I heard of it. Speaking of the DMCA, I think I should give it a read and then make it a part of my legal studies. Some parts of it may be out of date. In those days, the idea of distribution gigabytes of data to individual users millions of times a day was absurd. Now, many whole games are not only distributable online but are distributed exclusively online. The physical media is fading, and provisions in the DMCA that worked well then may no longer adequately protect consumers in the digital age.

Finally,I have a tangential question that I just found interesting:

3. I've often heard that companies choose to incorporate at the place with the most beneficial laws. It is then very interesting that I've found that both EA and Sony PSN's Terms of Use are governed by the laws of the State of California, San Mateo County. I've lived longer in California than anywhere else; it's my home. But I have to ask, is one of the reasons why California was the center of the tech boom a decade or two back and still a hub now...is one of them California's willingness to pass laws that favor tech companies, including game publishers, at the expense of consumers?