eBay seller sues Autodesk for the right to sell used AutoCAD

A lone quixote in Seattle is suing Autodesk for sending copyright infringement notices to eBay, where he is a professional seller. At issue is Tim Vernor's listings for used copies of Autodesk's AutoCAD software -- Autodesk says that when you buy its software, you only "license" it and so you don't get the right to sell it after you're done with it. Vernor is seeking $10 million.
Autodesk is using the Digital Millennium Copyright Act to have legal copies of their software removed from eBay so they can sell more new copies. The latest version of AutoCAD software is around $4,000 a copy. Autodesk's lawyer, Andrew S. Mackay states "AutoCAD software is licensed, not sold and that license is not transferable." AutoCAD software is available for purchase at most major software retailers. There is no indication your purchase would be different from any other until you get it home and open the box. There is a piece of paper tucked inside that says it is a licensing agreement with the statement "by opening the sealed software packet(s), you agree to be bound by the terms and conditions of this license agreement". This is called a "shrink wrap" contract. It cannot be read until you open the package which according to the contract constitutes agreement. US courts have not held a "shrink wrap " contract to be valid. Furthermore the Digital Millennium Copyright Act is only intended to enforce copyright violations, not breach of contract.

The lawsuit also alleges perjury since the notice that was sent to eBay is required to be signed under penalty of perjury and fraud. Using illegal means to make a legal gain (i.e. sell more new copies) is a civil definition of fraud. Autodesk's attorney Andrew S. Mackay is currently under investigation (# 07-24456) by the California State Bar Association for his actions in this matter.

Link (Thanks, Bruce)


  1. I kept thinking as I read this article…What if I bought a new car and when I got it home I discovered a contract in the glove box.
    The contract said that I cannot sell this car ever, even if it is still in excellent condition, because it is important that the manufacturer be able to sell new cars at full price???

  2. Finally someone who stands up against these “we want it all” companies. You have my full support, Tim!


  3. …I would have to agree with this lawsuit. I have been using Autodesk products for over 17+ years in the Manufacturing Industry and all the companies I have worked for have always had issues dealing with Autodesk’s upgrade tactics!

    Here’s an example of today’s issue if you want to start your own business using Autodesk Products.
    1. Open your doors for business.
    2. Buy AutoCAD.
    3. Bid a Job.
    Sounds pretty simple right? …well look a little deeper into the steps stated.
    – You can only buy the latest copy of AutoCAD. period!
    – Your client has to have work created with his version of AutoCAD (one prior to yours because he’s been in business for many years)

    Why is this acceptable/legal practice for any software company?

    Here’s the skinny: These software giants have figured out how to force you to upgrade! Many places of business can operate for years with the same version of a software! The consumer should have that choice! Consumers should be able to open a business and buy used versions of software!

    It’s all about GREED! It’s just WRONG!

  4. US courts have not held a “shrink wrap” contract to be valid.

    The author of the article is wrong and neglected to fact check. US courts have enforced shrink-wrap licenses for at least 10 years. See ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir., 1996). See also Wikipedia.

  5. Justin,

    I had to pull down my 1l casebook on contracts and was about to log into lexis to support disagreeing with the person Cory is quoting (presumably Tim Vernor, but the link is to a Randall Newton of AECnews.com.) You beat me to it.

    Generally, courts have the power to deny enforcement of “contracts of adhesion,” which are contracts lacking a true negotiation, where terms are “stuck to the deal” on a take-it-or-leave it basis. This is the source of a fair amount of consumer protection law in the retail world; as there hasn’t been anything like a dickering or bargaining process in most retail cases it’s hard to justify holding a customer to an agreement they never made.

    However, in the world of software shrink wrap and click-through “contracts” courts currently overlook the “adhesion” aspect of the matter. There is no charitable explanation for why this is the case. At present courts typically do enforce contracts of adhesion where the subject matter is software. Which is a shame and an embarrassment for our legal system.

  6. I had the same problem when trying to auction used copies of Novell Netware 3&4 and an unopened copy of v5 Novell gave to me.

  7. The ProCD case involves a click through contract that has to be clicked each time the program is run. The defendant clicked agreement. In a shrink wrap contact it says you agree just by opening the box with the contract being inside the box- you cannot read it until the box is opened. Also the ProCD case involves copying the data which is what copyright law is supposed to do while the autocad case involves selling a legally purchased copy which is protected by copyright law and is called the first sale doctrine.

  8. “Autodesk says that when you buy its software, you only “license” it and so you don’t get the right to sell it after you’re done with it.”

    Anyone else have serious Harry Potter 7 Goblin law flashbacks?

  9. I don’t understand the statement of facts. I have seen similar agreements, but normally you open the package, see the license agreement and read it. If you agree, then you break the seal on the media envelope. The above quote is suggesting the license agreement is inside the CD envelope? Or are they thinking the license refers to the shrinkwrap on the retail box? I doubt that was the case. There was probably a sealed CD and the seal says “read the license agreement before breaking this seal”

  10. “Autodesk is using the Digital Millennium Copyright Act to have legal copies of their software removed from eBay so they can sell more new copies.”

    Autodesk is an it, not a they. Mr. Vernor’s lawyer, in contrast, is a hack.

  11. There is a related issue being what ‘perpetual license’ actually means. Autodesk and many others license conditionally, requiring that you must use FlexLM to manage the licenses, and FlexLM is bound to the IP or MAC address of the machine. If you later need to move your Autodesk software to another machine, you can only do so if there is a paid support agreement in place.

    In other words, the ‘perpetual license’ is only valid for the machine it was originally installed on, unless you pay annual support fees, forever.

    It should be illegal to call this a ‘perpetual license’.

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