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Microsoft

Unbundling Windows Declared Legal in Germany 187

Posted by CmdrTaco from the divide-and-sell dept.
brokeninside writes "Infoworld has an article about Germany's highest court on civil matters declaring that Microsoft can not prevent dealers from unbundling OEM software. This ruling stems from a lower court ruling in 1997 on a lawsuit against a German company for selling an OEM copy of Dos/WfWG sans hardware."
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Unbundling Windows Declared Legal in Germany More

Unbundling Windows Declared Legal in Germany

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  • um (Score:1)

    by thinkpol ( 51932 )
    I dont really think that stripping the computer of it's operating system is really a blessing. If you'll notice, it costs the same to get a computer from most places with linux as it does with windows.

  • ...what the software world would be like if this was done with MS-DOS in the USA back in the 80's.
  • The geeky German magazine, c't [www.ix.de], has a more detailed story [www.ix.de] but it's in German.

    According to ct, the key issue is that Microsoft claimed that the strategy of selling software at two different prices was necessary to protect their copyright from pirates, but the court ruled that the stategy wasn't "necessary and worthy of protection".

    Microsoft has been suing small dealers in Germany that have never entered any agreement with Microsoft for years. There are a lot of pending cases.

    The court regards the strategy to be a method of promoting Microsoft's products, and in general there is no legal protection in Germany for manufacturers to sell products at different prices to different market segments.

    German law does allow software companies to restrict the use of the software they have sold in some ways. For example, you can't resell single seat licences as network licences even if you don't have contract with the manufacturer. The court decided that the OEM licence wasn't fundamentally different than the normal licence, so this rule doesn't apply.

    Two remarks from me: First, the ruling won't be published for weeks, so no one knows how the lawyers will react, and second, although this is the German Supreme Court (more or less) Germany has a myriad of competition laws ranging from the emminently reasonable to the mind-bogglingly stupid, and the EU is hacking away at all of them even as I write, so this may not be the final word.

  • any child under 18 cannot legally form a binding contract in the US...

  • any child under 18 cannot legally form a binding contract in the US

    Exactly. No contract == no license == no license restrictions == you have all the rights of first sale and fair use.

  • Ok then, If GPL programs are included on a system that you purchase, then the buyer could take them and sell them without the source. It would be "Bundled" with the PC.
  • Many products are like this. Retailers aren't allowed to split up their family-size packages of.. say, shampoo(ie 2 bottles shrink wrapped together, and sold as a unit), and sell them individually, why should this be different for software?

    Don't mistake "the package says" for "not legally allowed to".

    You'll note that most of them don't say "this package may not be resold" anymore; most of them say "not labelled for individual sale" and have no UPC code, which makes things hard for a retailer who wants to sell them.

    --
  • Only buy from manufacturers whose recovery CDs don't reformat your HD (i.e. they just restore c:\windows). Acer's CDs don't reformat IIRC.
  • You make it sound like Microsoft has desperately wanted people to be able to resell Windows, but if it weren't for this court ruling, Microsoft would have no recourse of its own to allow that. They themselves have been the ones enforcing EULAs with that very prohibition. Did you mispeak, or did I misread?
    I think M$ found that their illegal EULA was seriously impacting their sales in Germany, and contrived to find a way to remove the EULA for German sales, without affecting the EULA for, say US sales, where they are continuing to "get away with it" ... it's a practical matter, since if they volutarily quit enforcing the EULA somewhere, their attempts to enforce it anywhere will be viewed with more suspicion.

    They traded out enforcement of the EULA in Germany for German sales, without losing enforcement of the EULA in other markets. They knew this would happen when they brought the suit, imo.... This is a win for M$, short term, at least.

    See also: another of my comments about this [slashdot.org]

  • On what do you base that assumption, Mr. Coward?

  • The key word is "marketplace". Since GPL'd software is made available without cost, I wouldn't think this could be made to apply to GPL'd software

    GPL'd software is all over the marketplace. Anything from Linux to Perl can be bought in retail outlets.

    I think you are confusing the notion of 'first sale' which only governs the physical media that software (or books or magazines) is sold on with 'the right to make and distribute copies on terms other than simple fair use' which the GPL specifically grants that other software doesn't

    First sale has absolutely no effect on the rights of the copyright holder to prevent someone from making further copies. First sale, does say that if you buy a cd, the seller can't put restrictions on what you do with it outside of writing a seperate legally binding contract.

    An example of a seperate contract would be when I worked at one company, we could buy Microsoft software at the cost of production provided we signed a contract stating that we would not sell it. Contracts such as this that are actually signed are usually enforcable. But, the usual situation is that no such contract exists in the case of most resellers that get pc's bundled with Windows from a distributor.

  • Re:um (Score:1)

    by / ( 33804 )
    However In the past many computer makers charged you for an operating system regardless of if you purchased one with the system or not. Perhaps this is why your system with linux installed cost the same as it did for one with windows.

    There's no need to hide behind qualifiers such as "perhaps". This is in fact the reason.
  • I've seen a post from someone in Germany that states that Microsoft has 98% of the desktop marketshare in Germany.
    I replied to that post here [slashdot.org]. You might want to understand that percentage of OS sales does not constituet percentage of OS in use, esp when Open Source OS's are not sold over the counter; and M$ is automatically shipped with every box. What they are actually saying is that "98% of computers shipped with M$ installed." I was addressing actual usage, which is a different animal.

    I stand by the numbers, although as I pointed out, they are a few years old (circa 1997), I seriously doubt that the percentages have changed much over the last 3 or so years. I will look for the resource, but I doubt it is publicly available anymore, since it was M$ hype, and they don't like to keep that sort of thing lying about where it can be used.

    I have also heard that eastern europe and Russia have overwhelmingly large percentages of MSDOS installations compared to Windoze, but that is purely anecdotal information, passed as an explanation of why M$ supported the bombing and continued conflict in the balkans....

  • #include <ianal.h&gt

    We had to sign an agreement saying we would not resell the software.

    If I went to a German university and had software given to me for free does this mean I could turn around and sell it?

    I don't think so. See, in this situation, you agreed to recieve a free copy of the software on the condition that you don't resell it. I can't be totally sure since IANAL, of course, but that's my take on it.

    --

  • After digesting some Ritalin, try and discover the difference between 'sponsoring' and 'bundling'.

  • Ok, let me ask you if you've read the GPL. It doesn't try and infringe upon your rights, it doesn't remove any rights you have under copyright law. It is related to click-wrap licenses only in the most superficial ways. Instead, the GPL grants you extra rights, saying that you are allowed to do things you normally wouldn't be allowed to. It also puts some restrictions on those extra rights, to ensure the extra rights are granted to everyone who can use the software.

    Apologies for the hostile tone of that, but anyway... That entire authorship thing is incrediblty confusing. Could someone tell me what these "rights of authorship" they're going on about are? Its not copyright law, because I doubt a court would say that once someone sells something, he/she can no longer enforce their copyright. Some kind of clarification would be incredibly helpful.


    -RickHunter
  • No, following my analogy, you'd be able to resell the computer AND windows together, but not just windows.
  • You gotta blast the registry, too... and it complains if there is already a folder named 'Desktop', and a few other minor things (for a fresh install w/o trashing the drive)... upgrades haven't shown to be nearly as functional. I always fresh install off of the upgrade CDs anyway...

  • True on what MS is doing. But interesting twist: what if the German courts, faced with that, rule that using technical means to circumvent the law ( eg. using hardware-specific locks to prevent legal unbundling ) is itself illegal?

  • Maybe that is why... (Score:3)

    by www.sorehands.com ( 142825 ) on Friday July 07, 2000 @08:48AM (#951083) Homepage
    Maybe that is why Microsoft is insisting that companies does not include a seperate Windows CD and just use the "recovery" CD to reinstall the WinBlows Image.

    BTW: I always hated the CDs that don't allow you to install the products without wiping the entire system.

  • The manufacturer could easily put the nutritional information on the individual packages. The reason they do not is that they were sold as a bundle. The manufacturer never intended for the candies to be sold separately.
  • they might be doing serverside parsing of xml files...
  • What effect (if any) will this have on other OS'es in Germany [...] Do you think that it will encourage Linux\BSD et all? Or are they just going to pirate Win2K.
    Last I heard M$ had a less than 30% market share in germany, anyway. This court decision could concievably boost M$ sales in Germany. Too bad, since traditionally europeans haven't been quite so careless about software purchases as amerikans.

    What makes you think they would pirate Win2k now that this court decision clears the air for purchase of it? You don't think M$ let this come to trial by accident, do you?

  • Copying? (Score:3)

    by 11223 ( 201561 ) on Friday July 07, 2000 @08:52AM (#951087)
    Microsoft had no binding contractual relationship with the dealer in question.

    What's to prevent a user from making fair use copies, then? Just make a copy of the CD and install it on two different computers that you own (which is prohibited in the contract). Because you hadn't agreed to the license agreement, does that just fall under fair use of copyrighted material? Can anyone then make unlimited personal use copies of software they "purchased"?

  • I like the quote they use:

    "The right of authorship can only be exercised once," he said. "Once the product has entered the marketplace, with the author's agreement, he can no longer engage rights of authorship"

    Maybe this means that we're finally going to start seeing some common sense legal decisions concerning software. This stuff should be just like any other product: I buy it - I own it. Period. I can give it away, sell it, put it on the mantle and admire it or throw it away as I choose.

  • They have "not packaged for individual resale" stamped on them because they don't have all of the nutrition information and ingredients listed that they are required to have by the FDA.

    Now, if a store owner pops open a bag of candy, and labels them all with the nutrition information, then it is perfectly legal for them to sell the bars. It isn't the company making the candy bars that is keeping them from reselling, but the FDA.

    With the OEM software, however, it is Microsoft telling retailers that they don't really have the Right of First Sale that is traditionally (read, always was until this new-fangled computer stuff came along) applied to the tranfer of copyrighted works. Also, most European companies have very strict anti-bundling laws (usually as anti-trust laws), making the practice illegal/unenforcable. It won't be that OEM software will cost more, it's that it shouldn't have ever cost so little.

    Besides, M$ has every reason to keep OEM software cheap, so that everybody installs their OS, and then later runs out and buys their applications. Of course, the anti-trust case in the US may change that.

  • Bundled stuff (Score:4)

    by TheTomcat ( 53158 ) on Friday July 07, 2000 @08:55AM (#951090) Homepage
    I'm sure I'll get flamed for this, but I don't think it's so wrong that you're not allowed to resell OEM Windows. I do think it's evil that they force their OEMs to bundle windows though.

    Many products are like this. Retailers aren't allowed to split up their family-size packages of.. say, shampoo(ie 2 bottles shrink wrapped together, and sold as a unit), and sell them individually, why should this be different for software?

    Maybe I'm misunderstanding.
  • the gpl does NOT require Costco or CompUSA to provide the source for the boxed copy of RedHat that they sell-- the source is to be obtained from RedHat (the distributor) not the value added reseller. Say I buy a 2 disk source and install debian distro for 2 bucks off linux mall. I can sell the binary cd to Joe Sixpack and the source cd to Dick Weed for 5 bucks each, unbundled. If Joe wants the source, he doesn't come to me according to the gpl, i'm just a reseller, Joe goes to the distributor, debian (who makes the source to the distro available). Imagine walking into Costo and trying to get them to give you for free the source CD for Corel Linux. Basically the distinction is that I'm selling the physical CD with what ever is on it. It is an entirely separate copywrite issue if I were selling copies of the CD, as then i am a distributor. And by this German ruling, the OEMs still can't make copies of windoze to sell, but they can sell the OEM disks as a reseller.
  • actually i just remembered from contract law, you also can't enter a binding contract under duress, if insane, or if intoxicated. So either install drunk or stoned, or if you like me, have to install stuff at work (sober) its still no problem. I don't want to, but work makes me, so it's duress (actually it's probably not be duress since I can quit the job) and its driven me mad:--)
  • Germany contribute to wine?? You have your facts mixed up my friend! It's the french that are into wine, the Germans are famous for their Beer!
  • The flaws in his argument notwithstanding, I'm increasingly becoming a fan of this guy [slashdot.org]. BTW, why VeryAngryGuy and not Very Angry Guy? Are you new to /.?

    It's people like him, or our old friend OOG [slashdot.org], that add colour to /., even if of a weird shade.

  • I can just tell the friend - go to ftp.redhat.com for the sources. RedHat's obligation of providing the source is now to my friend, not me.

    RedHat had the obligation of providing the source to you, but do they have it also towards your friend? With a transfer of ownership of rights you don't automaticly transfer RedHat's obligation or is this enbedded in the GPL?

  • That's a lovely theory, but I'm reluctant to buy it. Perhaps in the longrun, they may benefit from an increased user base, but in the shortrun, they're going to lose sales to resellers that may have otherwise been first sales. They don't get a dime from resale, so how would they think to get any short-term benefits? Historically, they've always encouraged piracy to build a userbase until such time as the market can support paying for it, upon which time they've always cracked down. The legal right to resale offers MS no benefits over that strategy, and moreover prevents that last crucial step of cracking down and enforcing new sales.
  • No way. This is about ownership, not copyright.
  • 51735.

    not that I have ever visited one, either ("Hey man, I was a freshman in college - I needed the program, and I only had $$ for ramen noodles!")
  • That isn't really German, dude. Your fellow AC is a Pentecostal Fundamentalist and was having a "tongues speaking" fit^Wsession...
  • >Could this mean that you could void the GPL after the initial sale in Germany?
    Nope.

    >If I've gotten a CD (say in the back of >O'Reilly's Apache book) can I now sell that
    >CD for more than the cost of the media? Of course you can. Why shouldn't you?

  • This seems to make sense to me, the OEM pays its licensing fees to M$ for whatever software, if they wanna sell it cheaper let them. M$ doesnt have to support the software if its OEM, may the retailer support it if they wanna do it this way.
  • Their market share is about 98% on the Desktop...Don't know exactly about the server, but until a few months I worked at a very big Corporation, over 10.000 Desktops...all NT 4.0 and all the servers (quite a lot) where NT server blah,blah...
    Yer dreamin', friend. I could be a bit off (I did get my figures from M$, and it was a couple years ago), but your "98% on the desktop" number is pure FUD. That's M$ Marketting's target number, not reallity.

    I'm quite happy to have a Linux-admin job now...
    Don't try to suck up to support your ridiculous claims you pathetic sleaze!

  • Copyright is still valid. You bought one copy and can sell it as you like, but you are not allowed to copy it.

  • From that page:
    <I>
    Point out the benefits of a legally licensed, preinstalled operating system. Customers have the original CD so they can reload the software. </I>

    So what's all this about recovery CDs that aren't real? Uncle Bill says that everybody has an original CD.... or does he...

  • this means that our trusty german friends can unbundle and export the source back to us NICE!!

    Ehmm, unbundling just means they can separately sell the copies of Windows that usually ship only with a PC. It doesn't mean they can decompile the software.

  • Take the next step. If I buy the shampoo, I can split and sell (at least in Germany), because I'm not bound by whatever my dealer agreed to.
  • Thank you for making me laugh again... I need a little levity on Friday afternoons at work...

  • Although German law can be recognized by other countries, that does not mean that it applies in those other countries.

    Still, a nice precident :).

  • IANAGL

    Could this mean that you could void the GPL after the initial sale in Germany?

    If I've gotten a CD (say in the back of O'Reilly's Apache book) can I now sell that CD for more than the cost of the media? Isn't that just another form of unbundling?

  • In case you hadn't noticed, that's one of the biggest complaints about Microsoft. They force resellers to sign agreements that they will charge for a copy of Windows whether or not it is installed. So if you buy a box with Linux installed, you are still paying for a copy of MS Windows. The US DOJ sued MS a few years ago for this, and got them to sign an agreement that they would stop doing it. But I still see ads for PCs with "free MS Windows". Yeah, right.
  • If American laws refuse to protect consumers, Germany may be a nice place to live. How is the cost of living?
  • What's the big deal aobut OEM software being sold anyways? Microsoft should *atleast* be happy there are copies circulating around for now.

    They'll bitethemselves in their rear end later when another OS Comes along and takes it places...

  • Not all recovery CD make you wipe out your entire system. My shiny new dell came with a Win2k Recovery CD, but when I used it, it gave me the option to do a recovery install along with a clean install. I belive my cd will only work on my dell however.

    P.S. It's not my Dell, "The Company" bought it for me, but I'm not going to complain about a P3 750!

  • What makes you think they would pirate Win2k now that this court decision clears the air for purchase of it? You don't think M$ let this come to trial by accident, do you?

    From what I understand, Microsoft does believe that unbundling Windows is the same as piracy. The article mentions that Microsoft is the plaintiff in the suit. Microsoft sued the hardware manufacturer because the manufacturer's sale of Win/DOS violated the license agreement between Microsoft and the manufacturer and, as such, was an act of piracy.

    I wish there was a similiar suit in the US, so people could dispose of old Windows disk however they pleased. Three years ago I got five bucks out of Windows 3.1 on 5.25 floppy on ebay. Its a shame that such a thing can not happen now...

  • IANAL, but as I understand it, one of the principles of copyright law is the 'First Sale Doctrine' - you have exclusive rights to duplicate your copyrighted materials, but your rights to limit its use end at the 'First Sale'.

    This idea has come under attack lately (the DMCA is basically an attempt to blast first-sale into the stratosphere), so it's nice to see it affirmed. It's a bigger deal than just software, though; it's a shot across the bow of all IP cartels.

  • Re:Ahhhh... (Score:3)

    by Black Parrot ( 19622 ) on Friday July 07, 2000 @01:54PM (#951116)
    > This means that OEM's who want to continue selling PC's with Microsoft products will have to start charging more for the PC's.

    > And this will lead to more expensive PC's for everyone, since OEM's need to offer M$ products in order to be competetive.

    No, you ignore the case where OEMs do not want to bundle MS products. They may now have an opportunity to be competitive price-wise by bundling less.

    And then there's always the heretical idea of bundling non-MS products. (Assuming any non-MS Windows software companies are still left in the game.)

    Some of you guys need to get away from the idea that everything depends on having MS stuff on your system. That, BTW, is what all these court cases are trying to protect. If you want MS stuff that's fine, but don't make me buy it too just so you can get a discount.

    Grrr.

    --
  • I was under the impression that such labeling was used because they didn't want to put the required nutrition information on every single stick of gum, or maybe couldn't fit it onto the individual packaging. Sort of an behind-covering move by the manufacturer of the product.

    You can go to a candy store where there's a big bin of gummy bears and scoop them into a plastic bag and pay by the pound. Even if you squint, I don't think you'll be able to find a label on each gummy bear. I believe I've seen also seen bins with those "bite-size" miniature candy bars.

    To get back on topic, it would still be in MS's best interest to offer a volume discount to OEMs.
    Besides the reduction in packaging costs, it would encourage the OEM to buy more copies if they come at a lower price. If the OEM then decides to sell those copies at a loss, why should MS worry?
  • He calm down...
    Don't know if leo.org [leo.org] is right with it's translation...Of course "slashdotish" is not my native language, as you could have seen from my post.
    The 98% are just what I regocnize, when I look around here in Germany. And of course has everyone on slashdot tonns of secret M$ Paper laying around. So please stop shouting or smoke something different.

    Michael

  • GPL has nothing to do with this! (Score:3)

    by (void*) ( 113680 ) on Friday July 07, 2000 @10:19AM (#951120)
    All those people attempting to raise the problem of GPL are just barking up the wrong tree. The GPL's intent is to reverse the imbalance in copyright law, by leveraging it to grant those rights that copyright law takes away by default.

    The principle of first sale or in this case, unbundling simply relates to the transfer of ownership or rights. If I sell you my T-shirt, I give up my rights to it. I can't wash it, dry it, wear it, whatever becuase it is no longer my shirt. It is your shirt now and you can do anything you like with it, in the same way that I could have done anything with it when it was mine.

    With my MS Office CD, I can copy it for backups, poke at it using a debugger, and so on. The only thing that copyright law prevents me from doing is to copy it and then Sell those copies. But I can transfer my ownership of that CD to someone else, thus giving up my rights to use it.

    Same with GPLed software. NO DIFFERENCE. I can simply take that RedHat CD (which only has bionaries) and sell it to my friend cheap. If I keep no further copies around, I am not redistributing it, but transfering it to my friend. So I don't have to give sources. I can just tell the friend - go to ftp.redhat.com for the sources. RedHat's obligation of providing the source is now to my friend, not me. I am clean.

    But since the GPL grants me the right to redistribute it, I can also choose to make copies of it to sell away! As long as I obey the conditions that I should give the binaries I must give the source. So if I make changes, if I make copies, then too bad, I am a reseller or distributor and must obey the GPL.

    So the question of copyright or copyleft as the GPL attempts to be is is orthogonal to the idea of transfering ownership, regardless of whether it is for profit or not!

    IANAL, but I should be!

  • ..In Germany, but let's be honest, just how much will this ruling effect the North American market? Hell, up here in Canada, we don't expect to see much effect on the DOJ case against Billy boy.

    It's an interesting legal precedent in Germany, and does show promise in terms of slapping down the M$ arrogance, but until there's some sort of binding international court for these sorts of things, legal ruling in one country against a intinational corporation just won't hurt it that much.

    I have to say, I'm getting tired of this anti-MS stuff all the time. Lets just get on with improving Linux on the desktop, and take over the market--that'll learn Microsoft!

  • Your refering to the 1997 rulling and NOT the news story BTW.. Your a tad off topic...

    The candy bars are a "bulk liccens" the end user is buying the bulk at a discount for doing so. This anolog to Microsoft selling bulk liccenses something I know people object to but I'm not one of those people.

    The OEM deal says the OEM must buy a copy of Windows for EVERY box he sells. The 1997 rulling says he may then sell it alone instead of with the computer.
    This means the end user is not FORCED to buy Windows as part of the pacage but may then buy Wndows as a seprate pacage. As it should be. This means the consummer gets to pick his own operating system.

    Saying otherwise is anolog to every home built by contractor X must then install appliences from company Y even if the home owner wants appliences Z.

    OEM's need to OFFER Microsoft products to compeate but the end user should be allowed to say "No" to Windows and buy something else for this computer.
    Pacage deals are good when it's an OEM working to offer a better deal to the consummer. It's bad when it's a software company trying to rob consummers of the ability to NOT buy a product they will not use.

    The accual story... OEMs desiring to sell PCs with Windows preinstalled can do so an remove pacages such as IE and replace them with pacages such as Netscape. This is exactly what Compaq did in the United States and Microsoft sued them over it.

    Now in Germany if Microsoft wants to preinstall IE thats fine... but then an OEM in Germany dosn't have to install it. They may instead go with Netscape.
    Other posablitys with this... A DrDos as a functional replacement to the Dos that Win9X runs ontop of.

    If Microsoft wishes to preinstall MsOffice with MsWindows fine but then an OEM can then rip the two appart and sell them as two diffrent products.

    That reduced price has allways been a sham. Windows is over priced to start with....
    The reduced price is something like $25 to $50... I rember when $25 was what you charged for high quality software. $200 and up was for mainframes and other such deals where you expected there to be 4 to 200 users using a single computer. I personally object to pricing policys based on the estimated amount of users on a given box. But that was how it was done and still is by some companys.

    The whole idea of selling Windows for $100 to $200 is really obnoxous.
  • Why not? As far as they are concerned, I have transferred all my rights to my friend. If they don't honor this, then I have evidently not cleanly transferred my rights to him. I don't think RedHat, the GPL or anyone else should have the right to deny me of the right to make such a transaction. Certainly, if they do deny this right, they have denied the principle of first sale. Where in the GPL does it say that this right is removed? The GPL grants us some natural rights taken away by copyright! It removes us of the right to steal code, and only that. It is not it's wording or intention to strip us of any other right irrelevant to this. To do so would be to contravene its spirit!
  • Well no. I am saying that the law should be very clear that such single actions are expressedly unlawful, in the wider context that anyone doing so is breaking the law, monopoly or not.

    Somehow, framing it under the umbrella of antitrust does not make sense, because, IMHO, the action itself is despicable, nevermind who does it.

  • Semantics aside, it's irrelevent, because such "labeled not for resale" restrictions aren't legally binding. You're not only allowed to sell the shampoo bottles separately, you're allowed to "improve" them and turn them into sexual aids, if you so desire. The general rule is that restrictions on future sales are void, and this ruling merely extends that rule to software, which companies have historically tried to pass off as a liscensed object rather than a sold object.
  • What If I want to install the Quicken program that was included, after wiping it because I was using Microsoft Money?
  • I found the article generally uninformative about Microsoft...
    Yes, it was about a court decision, not about M$. However, implications for M$ sales in Germany due to this decision are clear. M$ sales have always been weak in Germany (compared to certain other countries), and they (M$) are moving to bolster their position there. They apparently believe that the main thing hurting their sales there has been their restrictive (illegal under German Law, it now appears) licensing....

    Since Germans can now buy and sell windoze like any other piece of work, M$ hopes their sales will increase, undercutting the strong Linux/BSD support that has been emanating from .de this last decade or so.

    The whole spiel about how once an item enters the marketplace, the author loses some rights to control the terms of secondary sales. This seems like a very big deal considering how big secondary sales are. This ruling could have a serious effect on sales of software in Germany.
    I don't know about German copyright law, specifically, but I believe under International copyright agreements, the principle of right of secondary sale has been pretty much what it is for some long time now. The German court just affirmed that Yes, this law applies to M$ just like it does to everyone else. This is not a precendent except WRT to M$, who always seems to feel that they should me exempt from laws that they don't like....
    If I am a big software company, do I want to sell it to a secondary sales company and lose my rights to protect the terms under which that item is resold?
    As a copyright holder, you don't have any right to control secondary sales. Period. That was already the case, and the court affirmed it.

    M$ has long tried to gain control of secondary sales through use of an EULA. This EULA legally invalidates their copyright (as I understand it). Hence, the judge could have struck down either their copyright, or their EULA....

    It would have been better for the consumer if the court had invalidated the M$ copyright, imo, but I'm sure M$ knew that before they allowed this to go to trial. The decision they recieved will benefit them (M$) far more than it will anyone else, since it clears the way for M$ sales in germany. Such sales were legally very dubious prior to this decision by the court.

    I think it's very clear where this will lead: To an attack by M$ on the established Open Source/Linux/BSD communities in Germany.

  • a situation at my school? Microsoft signed some deal, and basically all of us students were able to acquire free copies of Visual Studios 6.0, WinNT 4.0 w/SP4. We had to sign an agreement saying we would not resell the software.

    If I went to a German university and had software given to me for free does this mean I could turn around and sell it? Or, because I did not actually purchase the software and it was given to me am I prevented from doing this?

    I don't understand how many people say this ruling makes sense. As mentioned by many other posters, it is nearly akin to being able to sell just the shampoo from a shampoo/conditioner pair sold shrinkwrapped together. Maybe it's more like buying a new car, pulling the engine out and selling that? Except selling the OS that runs a computer seems to me to be much more useful than selling the engine out of a new car.

    Then again, what's to prevent the retailers from installing their OEM copies of the software, selling those systems without the OEM Software CD's, and then turning around and selling the OEM Software? Would they be able to get away with that, and how would they be caught? hmm...

  • Because you hadn't agreed to the license agreement

    While we're on that topic, why not have your grandma, your toddler, or your cat click the "agree" button? That's the fatal flaw of shrink- and click-wrap license agreements. This would also help the Wine [winehq.com] project, as it allows legal reversing of Windows.

  • Re:Another solution... (Score:4)

    by technos ( 73414 ) on Friday July 07, 2000 @09:17AM (#951162) Homepage Journal
    I really should do that.. Blue spandex leotard, a cape, a glue gun, and fifty or so NT5 developers discs. Carrying a 2x4, I'd be the Blue Screen Of Death.

    Or perhaps go out to the Army/Navy surplus store and pick up a dress uniform and the appropriate insignia. I still have my ID badge from a trip out to Selfridge; I'll just do a little digital magic to make it read "General Protection Fault, Microsoft Corporation".

    I think I'll pull the latter on Halloween. I look far better in uniform than in spandex.
  • Let's make a good thing : send our unused MS software to a charitable organisation in Germany, where they could legaly sell the software and use the money for whatever good cause we support (suing MS, the RIAA or MPA for example :)
  • Generally, if the OEM version is cheaper than the upgrade version, it's for 1 of 2 reasons:

    1. The dealer you bought it from is not an authorized system builder, and probably bought the windows on the gray market.

    2. The distributor he bought it from is not authorized, so the copy of windows is from the black market - i.e. pulls from larger OEMs, or outright bootlegs.

    In other words, your copy of Windows is probably either gray market or black market software.

    Also, the information I used was from Windows 98 OEM, not Windows 2000. So even if you're BZZT-Right, I'm not BZZT-wrong, just BZZT-different.
  • You bring up an interesting point. I think you'd certainly be on solid ground to copy software to different computers for your own personal use. You can do the same with books and music.

    I think the more interesting ramification here is that software is a more directly "functional" sort of thing than traditionally copyrighted materials. It's easy to argue that you don't get more "functionality" out of having two copies of a book you bought. You may get more personal convenience by having a copy for home and for the office, but it still provides you with the same amount of intellectual "power", if you will.

    Software, on the other hand, can increase your "power" by copying it. If you never used two computers simultaneously, you'd have a good fair use argument, but what about installing five copies of Windows on a home network where they're all always on? It may still just be for personal use, but there's definitely an qualitative difference between that and ripping a CD, for example.

    Also, I wonder how "personal use" extends to a corporation. (A legal "person".) It's probable the whole origin of sofware "licenses" rather than sales is to prevent just this sort of thing by corporate "people".

  • Well you, since you unbundled the products on what is forbidden by the GPL. What was one product now becomes two becuase you unbundled it. Of course bundling is legal in Germany. But that does not mean that is always so. For legal, read not illegal, as long as no other laws or agreements are breached.
  • No, I'm sorry, that's wrong.

    If this was still back in the bad old days where they were required to buy a license for every machine they made, that would be the case. It isn't.

    An OEM copy of MS software doesn't necessarily have to come with a complete machine. There's any number of UK dealers who'll sell it to you with a big enough component to suggest you're building a new system. This is saying that they can go further than that, and sell software intended for bundling with new hardware by itself. That's ridiculous, and a dangerous precedent. The softwrae has been sold on condition that it's only resold with hardware, yet the reseller is now free to breach that contract.

    Loads of manuacturers sell OEM copies at a reduced price, the idea being that if it's bundled with the machine you get possible future upgrade sales and reduce the likelihood of a sale for a competitor. This case effectively kills that market in Germany as they can't really carry on with this or people will always buy the OEM part rather than the retail, losing them a fortune.

    Plenty of non-MS software gets bundled, too. When I bought this machine, it came with Lotus SmartSuite, IBM WorldBook and ViaVoice. True, none were installed but all were bundled.

    Your last paragraph betrays a total lack of knowledge verging on paranoia. Calm down, get off your high horse. OEM software deals are a good idea, they're not anywhere near as restrictive as you make out and this ruling knocks the market for them on the head. It's daft.
  • Quite possibly.

    But...

    Last time I heard, the GPL had no effect under English law. We had to have a brief law course as part of my CS degree and contracts came up. For a contract to be valid, you needed consideration.

    Basically, for it to be valid, it basically boils down to "I'll give you this if you'll give me that". Doesn't matter what this and that are, but they have to exist.

    Which is where _any_ public license hits problems under our law, as the licensee isn't entering into a vaild contract. Not receiving anything in return, see. Now, you can argue that that's a problem with the law and that it _should_ be possible until you're blue in the face - and I'd agree with you - but the fact is, right now, it looks rather like no public license actually does anything other than look pretty and act as a set of recommendations in England.

    Note I'm specifying ENGLAND. Scottish and Northern Ireland law are different, and I don't know anything about them.

  • Impact on GPL? (Score:4)

    by tdowd ( 206199 ) on Friday July 07, 2000 @09:17AM (#951184)
    Has anybody given any thought to the impact this ruling might have on the legality on the GPL, at least as interpreted in Germany? The court ruled: "The right of authorship can only be exercised once. Once the product has entered the marketplace, with the author's agreement, he can no longer engage rights of authorship". Isn't that what the GPL is, though? An attempt to compel specific behaviours based on rights of authorship? The legal fuzziness of the GPL as already seen in a slashdot conversation earlier, might only get worse. Linux fragmentation as a result? Who knows.
  • IANAL, but I think that the shield that the GPL has is that there can be no "secondary sales" because there was no "primary sale".

    LK

  • The dealer is allowed to unbundle them, but unfortunately, it won't boot...

    Unless it includes a CD of FreeBSD or Red Hat Linux or some other OS.

  • Das Vindowsdisk ist nicht fur die redistributen und debundilen. Ist easy traschen der harddisken, blowencarten und blauscreenovdeathen. Ist fuer gewerken bei das dumpkopfen. Das rubbernecken sichtseeren keepen das cotten-pickenen disken in das boxen; relaxen und watchen das blinkencursor.

  • So unbundling is now legal in Germany, what about Microsoft no longer selling anything in Germany?

    How is that a bad thing? Computers will come with a BSD or GNU/Linux system installed on the HD. If the Deutsch want their precious [preciousmoments.com] Winblowz [microshaft.com] apps, software developers will contribute to Wine [winehq.com].

    what if ... Billy says "Naw, screw it, I'll just close the company instead."

    Again, how is that a bad thing?

  • So the GPL doesn't have any meaning. That's fine. But remember, the software is still covered by copyright, and under copyright law you are not allowed to distribute it without a licence.

    The GPL explicitly says 'you do not have to agree to this License, since you have not signed it'. The GPL grants you extra rights above what copyright law gives you by default; if somebody just deleted the COPYING file then you would not be permitted to distribute the software at all.

  • Laughing uncontrollably. (Score:3)

    by technos ( 73414 ) on Friday July 07, 2000 @08:31AM (#951194) Homepage Journal
    Does this means I can finally part with the 200+ OEM copies of Win95 OSR2 and Windows98SE I have sitting in the back room, and do it legally??

    Man, does it suck to have to pay for the software and then not be eligible to sell it... Not for resale, my ass..
  • No, I don't think that follows.

    I'm not an IP lawyer - I'm a fresh CS graduate so if anyone wants to employ me get in touch ;) - but to my knowledge copyright lawyer does not say that distribution is forbidden unless stated otherwise.

    My recollection is hazy but I'm pretty sure that this came up and the opinion of our lawyer was that the license couldn't be a valid contract under our law, so distribution was little short of unrestricted free-for-all.

    Now, I'm not a GPL fan personally, but that doesn't mean that I don't think it's important that that class of license is possible. I'd want to see this sorted out fairly soon. But, it's worth our while knowing that UK law pretty much says you can do what you want.

    Anyone else?
  • German courts ruled today that computer manufacturers are alllowed to bundle non-Microsoft software with their computers. Speculation abounds about whether or not this applies to other operating systems as well. If so, this has the potential to allow OEMs to bundle computers with Linux or MacOS against Microsoft's wills. Microsoft is expected to file an appeal later today.

    satire=false;

    Sheesh. It's amazing that the courts have to uphold what should be common sense. Maybe this says something about our legal system?

  • I'm not an IP lawyer - I'm a fresh CS graduate so if anyone wants to employ me get in touch ;) - but to my knowledge copyright lawyer does not say that distribution is forbidden unless stated otherwise.


    IANAL also, of course. Maybe you have to include the magic words 'All rights reserved'. I'm not sure. But I do know that if you buy a book, you are not allowed to copy it except as permitted by the law for fair dealing or library privelege. This applies even if the book doesn't contain any sort of 'licence' or explicit statement of what you may and may not do, because (AFAIK) even something without any copyright notice is still copyrighted. It follows that a piece of software without any copyright statement or licence works the same way. I have plenty of old software at home that doesn't come with any sort of licensing nonsense, but I'd still be breaking the law if I distributed copies of it.



    So if you want to ignore the GPL, that's fine - just treat the program like any other literary work that doesn't come with a licence granting you extra rights. You can copy it as allowed for fair dealing, but not otherwise.

  • This is good (Score:3)

    by (void*) ( 113680 ) on Friday July 07, 2000 @08:33AM (#951200)
    Does anyone somehow feel that this is the way Big Monopolies should be dealt with? A clear concise ruling yet far reaching ruling that prevents MS (and fture companies) from attempting to leverage its monopoly is far far better than an expensive anti-trust lawsuit. Germany seems to be getting it right, IMHO.
  • My machines never stay in one piece forever. Eventually they disgorge their innards into other machines, the HD going into one box, the video/sound into another, the mobo/CPU yet another one. Which of these pieces is the Windows CD supposed to stick with? Where does its loyalty lie?

    Personally, I believe in the buy-once-use-on-all-machines-in-the-house approach, and unless the FBI comes tearing down my door, I don't give a shit what others say. That's the beauty of software, that you can do that sort of thing. If you could also do it with hardware--books, TVs, phones--I'd never buy more than one of anything, but alas...

    Uwe Wolfgang Radu
  • If your price is too high, look for another distributor.

    You can do this, but it changes the legality of the situation a little.

    There are very few distributors truly authorized to sell OEM system builder versions of Windows. Every one of these is about the same price.

    There are many other distributors that sell it without being properly authorized. Most of these copies of Windows are less expensive, but they are either gray market (split up from a volume purchase) or black market (pulls from large OEMS or counterfeits). The only way to assure a legal copy of Windows is to buy from one of the few distributors who is truly authorized. And pay full price.
  • I don't understand how many people say this ruling makes sense.

    Well, many people believe that the consumer has rights ("first sale", "fair use", etc.) that they cannot be asked to give up as a condition of buying a product.

    As mentioned by many other posters, it is nearly akin to being able to sell just the shampoo from a shampoo/conditioner pair sold shrinkwrapped together.

    Sounds good to me. Think about it: How many things do you own which you are legally obligated to never resell? Do you really "own" them in that case?

    Then again, what's to prevent the retailers from installing their OEM copies of the software, selling those systems without the OEM Software CD's, and then turning around and selling the OEM Software?

    What's to prevent the retailers today from installing one OEM copy of the software, selling that system without the OEM software CD, and then using that same CD to install on every other computer they sell?

    Allowing OEM software resales doesn't make committing crimes easier; even if it did, is that a reason to make those resales illegal? We need laws against doing bad things, not against doing reasonable things which make other laws harder to prosecute.

  • Yes, Bill Gates does have the right to do that. He'd be incredibly stupid to do it, because he'd be opening himself to being sued by everybody who owns stock in Microsoft for breach of contract, etc, as he simply runs the company, he is not sole owner, the shareholders are the ones who own the company.

    Now, supposing he does decide to board up M$ and move along his merry way. There will be a huge void in the support market, and anyone worthy of being called an entrepeneur would enter that market in a second.

    Capitalism solves these problems all the time. Don't think that the world would end if microsoft would go away.

  • Usually, "Not of Individual Resale" declares a product which does not contain the required-by-law information (such as nutritional info) on the individual package, but on the box. That has little to do with bundling software.

    Selling a computer is one thing, selling an OS is another. However, M$ says that if you buy a PC from, let's say, Dell, and it comes with their (Microsoft's) OS, then you cannot take that license and resell it to someone else - even if you have no intention of using it.

    Also, let's say I prefer Corel or Lotus Suites to Office. If it came with my 'bundle' M$ says I can't sell it to a friend. If I buy a 4X4 and I don't like the rims, I can buy new ones and then sell the old ones to someone who likes them. Why can't I do this with software?

  • Maybe that is why Microsoft is insisting that companies does not include a seperate Windows CD and just use the "recovery" CD to reinstall the WinBlows Image.

    According to the story, the "Windows recovery" CDs probably just unzip a Windows folder straight from the CD and leave the rest of the HD alone.

    BTW: I always hated the CDs that don't allow you to install the products without wiping the entire system.

    Two words: deltree windows

  • Re:Bundled stuff (Score:3)

    by technos ( 73414 ) on Friday July 07, 2000 @09:27AM (#951221) Homepage Journal
    Look at my situation; We lease thousands of Windows PCs, most of which are scrapped after returning from lease. As a consequence, we have been known to have hundreds of OEM CDs lying around. Per the terms of the EULA, we cannot distribute the OEM with another PC, we can't trade it, and we can't return it. Shit, even installing it on the unscrapped OEM machines is questionable, since we really can't transfer the license to the purchaser. (Most of the time we are the second owner of the machine, not the first)

    Now how does it make sense??

  • No (Score:2)

    by / ( 33804 )
    Because fair-use isn't a boundless priviledge to make infinite copies without use restrictions. There are specific uses for which you're allowed to make fair-use copies (such as backup), and infinite installs isn't one of them.

    What is far more interesting is the implication for reverse engineering, since absent a liscense or contractual obligation to the contrary, reverse engineering is permitted for all normal products.

  • Another solution... (Score:3)

    by tilly ( 7530 ) on Friday July 07, 2000 @08:39AM (#951230)
    Someone I know writes device drivers for a living. One Halloween he put together a costume out of free NT installation CD's he had been given that he was never going to use.

    I nearly died laughing when I saw it. :-)

    I am not sure that he would have resold them. Something about it being an, "abuse of computer rights"... :-) (Actually he probably would have.)

    Cheers,
    Ben
  • Only as coasters, or Frisbees, or diaphragms for the sort of women you meet down on Woodward.

    The moment you install it, we both lose license to it as EULA violators. Copyright infringment sets in at that point; We have no license to the software, so they go after you for infringement and me for contributory infringement. If I were to write off the donation, as a charitable act, they can now go after me for loads of other stuff, and the IRS will be interested in felony tax-evasion.

    Quite nice, isn't it?
  • The arguement could be made that it is the documentation which is being sold. Or possibly even 30/180/whatever days of tech support are being sold and the linux distro is just thrown in for free so that the actual item being sold isn't useless.

    LK
  • There are lots of sandwhich shops from which you can buy your lunch. However, there are only a few brands of potato chips available. Microsoft Chips are the most popular chips in the world.

    Microsoft Chips signs deals with every major sandwhich chain in the world. This deal allows the individual sandwhich shops to buy Microsoft Chips at a great discount - but only if they agree to only: (1) sell sandwhiches packaged with Microsoft Chips (2) don't sell Microsoft Chips by themselves (3) don't sell sandwhiches by themselves (i.e. sans chips) (4) Never EVER sell any other brand of chip.

    Personally, I'd rather pay a bit more and have a choice!

  • You're still allowed to take the entire family unit and resell that, even if you're not allowed to split it up. Using your analogy, you're still not allowed to sell the cd's individual files separately, but you should still be able to sell the original cd itself.
  • This does not affect the GPL *at all*.

    The GPL is only in effect if you wish to distribute (make copies of) the software to give to other people. It does not affect you if you are making a copy to install on your system.

    This ruling affects the resale of items, not the copying of items. AFAIK, the GPL does not restrict your ability to resell, say, a Redhat CD. It does restrict your ability to, say, make and distribute a knockoff of Redhat *cough*Mandrake*cough*.
  • Besides, M$ has every reason to keep OEM software cheap, so that everybody installs their OS, and then later runs out and buys their applications.

    So why isn't their OEM software cheap? An OEM copy of Windows is on average $10-$20 more than the retail "upgrade". For example, if the upgrade costs $95, the OEM version will cost $115. And with the OEM version, you have to buy at least a 5 pack to get it without a computer. You can't use the upgrade because it requires a previous operating system to be on the computer.

    The reason for this is because Microsoft has a monopoly. They know that every computer you sell has to come with Windows or it's not saleable. So they can charge whatever they want for their operating system.

    OEM office applications are slightly cheaper than the retail versions, but they often require the OEM version of Windows to be installed. So as a small computer dealer, you are likely not saving very much money on the full set of applications for the system.

    The exceptions to all of these rules are large OEMs like Dell and Gateway, who have agreements to do the manufacturing and packaging of Microsoft OEM software for their own computers. They typically get a "license only" price. They also get a discount for providing their own tech support.

  • Ahhhh... (Score:3)

    by rnd() ( 118781 ) on Friday July 07, 2000 @08:40AM (#951247) Homepage
    So does this mean that Microsoft will have less incentive to sell software to OEMs at a reduced price? Absolutely.

    This means that OEM's who want to continue selling PC's with Microsoft products will have to start charging more for the PC's.

    And this will lead to more expensive PC's for everyone, since OEM's need to offer M$ products in order to be competetive.

    Is this any different from a store owner opening up a bag of bite sized candybars and selling them despite the fact that they all have "this item is not packaged for individual retail sale" written on the label?

  • Hmm..Was this really about MS? (Score:4)

    by ejbst25 ( 130707 ) on Friday July 07, 2000 @08:43AM (#951248) Homepage
    I find it interesting to note how a seemingly small article lacking a lot of specifics needed to truly understand this is found to be very newsworthy specifically about MS. I found the article generally uninformative about Microsoft...

    However, after having read the article, (unless I misunderstand the article) I think this has more to do with every software vendor selling items in Germany. The whole spiel about how once an item enters the marketplace, the author loses some rights to control the terms of secondary sales. This seems like a very big deal considering how big secondary sales are. This ruling could have a serious effect on sales of software in Germany. Its a ruling that may cause serious reform. If I am a big software company, do I want to sell it to a secondary sales company and lose my rights to protect the terms under which that item is resold? This would definitely worry me as a secondary sales company, while the big companies might begin to shy away from contracts for this sort of product sales. This ruling seems like it would be big for any type of vendor in Germany...and it definitely will be interesting where it will lead to.

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