sweatyboatman's Journal: EULA's and Product Contracts

EULAs and click-wrap agreements are completely bogus and probably wouldn't hold up in court. Yet, recently (as I was remaking an evaluation version of a product for the company I work for) I found myself putting in place a EULA. Even though I find them reprehensible. It's just a standard one (in fact I got most of it from this), but I initially tried to make some changes to it so that it was more in tune with "Fair Use". And I found out that I didn't really want to make changes. I wanted it to be as strict as possible.

Remember when your mother told you "your face will stick that way!" Well, your face didn't stick that way and there was no chance that it would. But it got you thinking (at least when you were younger) and sometimes, it made you hesitant to pull out all the face-making stops. That's what the EULA is for the software publisher. It's just a warning. Not a contract.

What software publishers want is the user happily installing the software and enjoying the product and recomending it to all their friends. They want them to think highly of the company that made the software, not to be scared or threatened.

But they have to balance what they want with what they don't want. What software publishers don't want are people hacking the software, reverse engineering, or reselling it as their own. And the EULA just says "Please don't do these things! PLEASE!" Beyond that, it's not really a contract, there's no signature, no record of agreement, no bargaining, etc. so it can't bind the user to anything.

Happily there are plenty of laws restricting the way a person can use a product they bought. They're all pretty much covered in a EULA and then some. It's the "and then some" that make people chomp at the bit. But for software publishers, it's just a little extra padding.

The EULA is not a contract

The EULA is not a contract. That's the irony. It shouldn't be presented as a contract and it's not enforceable as a contract. In reality it's a reminder to the user of what his/her rights under law are. And maybe it's a little wishful thinking on the part of the software publisher as well.

By presenting as a contract and filling it with CAPSLOCK and lawyer-sounding words like liability they make most users think that there's bite in the bark. But there aint. It'll kinda freak out some users, but fortunately, they see it only once. And then they get to use the product which is (hopefully) very nice and they forget all about that mean ol' EULA thing.

Where EULAs Get Into Trouble

EULAs that piss people off (and I can't really think of one that doesn't) generally contain a lot of stuff that isn't covered in current copyright law. This gives EULAs a bad name. Since they're dressed up like contracts, it appears like you're signing away rights. But you're not signing anything and a EULA isn't really a contract.

The big offender is: "We are not responsible for this software crapping out". Which really should read "We are not responsible for unintended results from misuse or misnhandling of the software". This means that if I am selling you a disk formatting program and you format your disk without backing up your pulitzer-prize worthy novel, well that's your damn fault. Same as if I sell you a bathtub and you slip and fall in it. As long as I took reasonable precautions and didn't design my product to hurt you, I am not liable.

A EULA that says the publisher is not responsible for any damage that comes from any use of the product is full of shit. But again, since the EULA isn't really a contract, just a notice, it's not really neccesary that it be factually accurate. Instead, they're just covering their bases and trying to discourage as many lawsuits as possible.

Then there's the part about making copies. There isn't much law to back up that you can't make copies for your own personal use. You can make as many copies as you want, according to law. The EULA is not a contract and should not be enforceable and thus cannot bind you not to make copies. However, copyright law prevents you from distributing those copies.

In fact, following up on this point, you should logically have the right to install the software anywhere you like as long as the only person using it is the purchaser. But this brings up a problem. What about a family with one computer, should they buy a copy for each of the family members? Etc... And here we get into some trouble.

Software and Copyright Law

When we start talking about software the way people actually use it, things start getting pretty messy.

When you go to the bookstore and buy a book, you're getting a device that presents a story to anyone capable of reading the language the book is printed in. Now, this means that you can share the book with friends, donate it to the library, etc. However, it's very difficult to create another copy of the book yourself, so there's never the case where more than one person's using the same book at two different locations.

With software, copying the disk is easy. A feature of computers. And there's nothing wrong with copying the disk. There's something very wrong with giving that disk to others for their use.

However, and here's the part where software publishers get into trouble. What they sell you, what's on the disk, is not the software you bought. It's a system for building the software on your computer. If publishers wanted to force the book model on software, they would come to your home and install the software there.

The installer, which is what you get physically, allows you to install on multiple systems. The purchased item is separate from the used item. And this means that you can use the same installer to create different software on different machines for multiple users. And the EULA can't prevent this. It's just reminding the users that they're not supposed to do that.

What Software Publishers Do

So, say you click past the EULA without reading it (have you ever read a full EULA?). How are you supposed to know what you're supposed to be able to do and what you're not supposed to be able to do? Well there's the obvious rule. If you can do it, you're probably allowed to do it.

Software developers have an enormous amount of flexibility in how they build their software. If they didn't want you to do something, they would just make it hard/impossible for you to do it. Some things they can't prevent: physically copying the media is the big one. And that bugs them, which is why they try to prevent such copying.

But then they pay because the user, who's supposed to be enjoying the software, instead is frustrated because he/she can't do what they want with it. This is tricky. If you're distributing a demo, it may be good that they're frustrated. If they purchased it from you or if your prices are too high then they'll resent you. So we try to disuade the user from doing it by saying "Shame on you for wanting to do that" in the EULA. And we try to pass laws.

Breaking Fair Use

As I said ealier, everyone has the right to copy as part of fair use. But the publishers try to prevent this. Which is a violation of our fair use rights. To the publisher however, it's the same as writing restrictions into the code. It's just a way of making sure the software is used as it should be

Fair Use cannot handle the way software is distributed. It's designed around millenia of trade with physical objects, where part of the value of the thing was in its physical presence and copying was expensive as well.

The DMCA and other such legislation are attempts to restrict fair use in digital media. They hope to use new legislation to change the way people think about it. But this is bass-akwards.

Fair Use arose out of common law understandings of what a sale and purchase is. So any new laws addressing what one can and cannot do with purchased software should reflect the current common law model. Which is the following:

Extensions to Fair Use

The sale of software represents a license as follows.
Holders of the license:

1. Can use the software on as many systems as they use
2. Can share use of the software on their computers with others
3. Can be copy the software for the purposes of back-up or use on personal systems
4. Can resell the license to another person

The following exceptions apply

• The license holder may not sell "the software", only the license
• 1-4 are transferred whole upon sale of the license
• The license holder does not have explicit rights to hack, reverse-engineer, or otherwise fiddle with the software
• The license holder may not in any way portray the software as his/her own work

Obviously, I am not a lawyer, but I think that these extensions to the law would accurately reflect the current common-sense understanding of what is meant by a purchase of software. /blockquote.