Last month U.S. Congressman Blake Farenthold introduced the so-called “Your Own Devices Act,” which he claims will reinforce consumer rights and “preserves our ability to truly own the products that we buy…” But consumers’ ability to own that which they buy is not at risk. Instead, the proposal would change copyright law and alter contracts that the marketplace has come to accept, understand and rely upon.
Specifically, the bill would amend the Copyright Act “to provide that the first sale doctrine applies to any computer program that enables a machine or other product to operate.” That is, “ …if you want to sell, lease, or give away your device, the software that enables it to work is transferred along with it..,” according to a Farenthold statement.
Others have been more direct, stating outright that the effect of the proposal would be to dramatically alter current law, suppress contracts, and decree that if a person buys a device that includes software, that person would “own” both the device and the software rather than just licensing the software. But, as is well known, software accompanying technological devices is typically licensed, not sold.
The R Street Institute, which supports the legislation, has raised questions and drawn analogies that actually serve to highlight the problems with the legislation.
For example, R Street asks us to imagine selling a car but being prohibited from selling the engine to make it run. What is not made clear in the example is whether the engine is also owned. Or perhaps the car was merely rented? If the engine is not “owned” then it cannot be sold. If the car seller tried to sell the engine would we be shocked if the law stopped them from doing so if in fact they did not own it? If the car was rented from Hertz, would we say the law should allow the renter to sell the car? Of course not.
The entry also goes on to rail against “self-favoring contracts” (such contracts are typical as entities are rarely inclined to argue against their best interests), “hav[ing] to buy your own copy of the software” (apparently this is a problem and they suggest should be solved by others surrendering their property rights) and an overall complaint about the contracts into which people have entered (despite the fundamental basis that contracts serve in free markets).
There is no reason to upset contracts or property rights. Few would accept Congress arbitrarily changing the law to redistribute property to those they found more worthy.
The courts have found that intellectual property rights continue even if there is an argument that their use places restraints on the market. Few should be shocked any longer to find that in some transactions leasing is common—just because a person pays and receives something in return is not the indicator of ownership. Rather, agreements spell it out.
In truth there is much agreement: People should be able to sell, lend, borrow and give away the things that they own, but only those things that they actually own. R Street even provides an agreeable and less-damaging solution than the proposed legislation, “…there needs to be more transparency in terms of service agreements, which consumers don’t read and wouldn’t be able to decipher even if they did.”
Understandable disclosure is absolutely necessary, and the only way that a truly free market can function. This liberty-based solution is better than voiding or limiting contracts, and forcing others to surrender their property.
October 23, 2014