Bill Introduced To Protect Owners Rights

by | Sep 19, 2014 | Association News

Farenthold bill addresses critical digital rights issue, preserves right to sell

U.S. Representative Blake Farenthold (R-TX) has introduced a bill that will protect the rights of people and businesses who own products that rely on the manufacturer’s software to function. Farenthold’s “You Own Devices Act” (YODA) would permit users who want to sell, lease, or give away a device to turn over the software license, too.

Farenthold echoed widespread concerns that some manufacturers have already moved to use their essential software as a way to limit or even completely eliminate the ability of consumers and businesses to sell or transfer ownership of products that can only function with their original software. In statement issued from his office, Farenthold said, “YODA would simply state that if you want to sell, lease, or give away your device, the software that enables it to work is transferred along with it, and that any right you have to security and bug fixing of that software is transferred as well.”

The issue of license fees and right to use has been a constant feature of commercial use technology markets over the past twenty years. But the remarkable spread of both software and cloud technologies into everyday consumer products ranging from smartphones to refrigerators have transformed the issue into a matter that could potentially impact every consumer. Manufacturers could in theory attempt to make virtual renters out of their customers, essentially selling them an experience instead of a product.

The ASCDI, an international alliance of technology and communications channel and service companies urged its membership in the US to back the bill. ASCDI President Joe Marion said, “These manufacturers claim that you don’t have the right to resell or choose who services your product because it contains intellectual property that you never owned in the first place! That gives you two options when you are done using their product. You can throw it into a landfill and buy another one from the manufacturer or you can give it back to the manufacturer who will have the ONLY right to resell the used product. The choice is pollution or feeding their monopoly. The Farenthold bill fixes this growing problem and preserves our right to choose. It ensures that when you buy a product that has a software component, YOU own it and have the right to sell, lend or even give it away.”

If manufacturers attempted to curb ownership rights through extensive use of software licenses and fees, vital credit and leasing markets could be impacted as well. Since leasing and finance plans require that an asset have a predictable after market value, leasing and lending for technology based capital products might be affected. Additionally, companies that now place a technology product on their balance sheet as an asset might find instead that they have purchased a recurring expense.

In statement released this morning, Andrew Shore, Executive Director of the Owners’ Rights Initiative, “Ownership is a bedrock concept in American society. In Wiley v. Kirtsaeng the Supreme Court confirmed that when you purchase a good you own it and you have the right to dispose of it as you wish. However, some rights holders are trying to separate the software that is the engine of those goods from the good itself. They’re requiring second owners to buy new licenses to ensure the new owner can get critical updates and patches to ensure the good can function. In a society where everything from our cars to our washing machines have critical software, this has the effect of turning ownership rights into pure fiction.

The ASCDI’s Joe Marion added, “Consumers, resellers, charities should consider Representative Farenthold a hero and give him the support he deserves.”


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