Fair Use or Foul?

Where copyright law and contract law intersect, it’s not always easy figuring out what the rules are. An interesting case in point is that of a reader who was not quite sure what he could and could not do with a Windows Vista upgrade.

“I have a shiny new Vista upgrade disk obtained legitimately and for free with the Vista upgrade coupon that came with a new Toshiba laptop I bought my wife in November 2006,” the reader wrote. “But my wife wants nothing to do with Vista — she likes the installed XP Media OS just fine. What can I do with the Vista upgrade disk? Can I sell it on eBay? Or install it, heaven forbid, on my old Gateway system?”

The reader didn’t have any doubts about how Microsoft would answer those questions, but it did seem to him that neither he nor his wife had agreed to any restrictions on the use of the Vista upgrade when they bought the Toshiba laptop. “There was nothing in the meager Toshiba paperwork that said it could only be used on a Toshiba system or, more specifically, only on the one I bought. But on the upgrade disk it says ‘for use only as an upgrade to a qualifying Toshiba PC.’ It seemed such a waste not to use it, so I chose to install it on my Gateway. Does that make me a crook?”

Well, that’s an interesting question. Let’s see — the reader purchased a computer from Toshiba that came with a promise, included in the price of the system, to deliver a Vista upgrade when it was available. As far as he can tell, the notice printed on the disk itself was the first time Toshiba told him there were any strings attached to how he could use the upgrade, and of course he didn’t see that until months after he’d purchased the computer for his wife. So it’s a bit like being told after the fact that the free blender that with your appliance purchase can only be used in your garage.

On the other hand, the Toshiba system (and his older Gateway system, for that matter) doubtlessly came with a version of the standard Windows XP OEM End User License Agreement that said something like “the software is licensed with the computer as a single-integrated product and may be only be used with the computer.” It also would have a provision saying the EULA applies to updates and supplements of the software. And the Vista OEM EULA that came with the upgrade disk would also have the non-transfer clause prohibiting use on another system. (The EULAs for retail versions of Windows are somewhat different in that they allow transfer of the OS to another system.) So in installing it on his Gateway, the reader was arguably violating several license agreement terms.

So does that make the reader a criminal? Not being a lawyer myself, I certainly can’t provide a definitive answer – and, as we’ve heard, even if I were a lawyer it would be easy to find another one whose opinion would be 180 degrees from mine. But since we are all supposed to be responsible for reading software EULAs and deciding what we can and cannot do based on them, we have the right to debate the topic.

My own take is that in the reader’s case it would come down to whether copyright law or contract law is applied. Copyright law would actually favor the reader’s position, as post-sale restrictions on usage go directly against its fair use and first sale doctrines. But if contract law trumps, then the reader is out of luck. And, of course, Microsoft is likely to have the last laugh anyway when its activation and WGA validation updates eventually make the Vista update unusable on his Gateway. After all, in our DRMed world, vendors get to be prosecutor, judge, and jury.

For his part, the reader still feels the Vista upgrade should be his to do with as he pleases. “I received a ‘Toshiba’ Vista upgrade disk, legitimately obtained and never installed on a Toshiba system,” the reader writes. “And when I installed it on my Gateway, the prior copy of XP that was on it was retired. So why can’t I use the upgrade on it? It seems like with the confusion over all these OEM restrictions that Microsoft is doing its customers a disservice.”

What do you think? Post your comments about this story below.