Vernor v. Autodesk, Inc.

Autodesk, Incorporated (Autodesk) (defendant) created and owned the copyright for the computer-design program AutoCAD. There were many versions of AutoCAD, and Release 14 was accompanied by a software license agreement (SLA). Release 14’s SLA stated that Autodesk retained title to copies of the software, that users obtained only a nontransferable license, and specified various restrictions on the use of the software. For instance, the SLA stated that users could not rent or lease the software, or use the software outside of the Western Hemisphere. One of Autodesk’s customers licensed 10 copies of Release 14 in March 1999. After purchasing licenses for an upgraded version, the customer sold several copies of Release 14 to Timothy Vernor (plaintiff). Vernor maintained an eBay account to sell various secondhand goods. When Vernor listed a copy of Release 14 on eBay, Autodesk filed a notice with eBay and Vernor under the Digital Millennium Copyright Act (DMCA), alleging that sale of the Release 14 copy violated Autodesk’s copyrights in the program. Vernor filed a cross-notice under the DMCA, alleging that Autodesk’s copyright claim was invalid. When Autodesk did not respond, eBay reinstated Vernor’s auction. The same process occurred with three other copies of Release 14. However, on the fourth occurrence, eBay suspended Vernor’s account for repeated claims of copyright infringement. Although the account was reinstated after the cross-notice, Vernor filed an action for declaratory judgment to establish that his sales of Release 14 were allowed under the first-sale doctrine. Vernor and Autodesk each filed a motion for summary judgment after the close of discovery. The district court granted Vernor’s motion, and Autodesk appealed.