The net effect of the Ninth Circuit's ruling is to limit the "You bought it, you own it" principle asserted by such organizations as the Electronic Frontier Foundation (or EFF).

[2][3] Under the first-sale doctrine, copyright holders give up the right to control the distribution of copies of their works after an initial first sale to the original purchaser.

Thus, in Autodesk's view, the first-sale doctrine did not apply - the original parties were never owners of their copies and so had no authority to resell the software to Vernor.

An important aspect of this case is that CTA, who originally bought the software, had purchased an upgrade to it and then sold the older versions.

[4] As the district court analyzed the case, the crucial issue was whether the transfer of the copy of the software from Autodesk was a sale or a license.

[5] The earliest precedent is followed because a panel of Circuit judges are bound by stare decisis to follow their court's prior panel decisions and only depart from them if there has been intervening Supreme Court precedent on point or an en banc decision of the Circuit holding otherwise.

[11] The district court also rejected Autodesk's assertion that Vernor was bound by license terms of software he did not install or agree to.

The court cited both "thorny issues" of implicit consent and the absurdity of asserting the transferability of a license that, by the definition of its terms, was nontransferable.

[12] Judge Consuelo Callahan, writing for the Ninth Circuit, agreed with the district court that the crucial issue was whether the arrangement was a sale or a license.

Its analysis covers the same four cases analyzed by the district court, but derives different principles from them: We read Wise and the MAI trio to prescribe three considerations that we may use to determine whether a software user is a licensee, rather than an owner of a copy.

The district court's ruling tried to harmonize used-software sales with the first-sale doctrine consumers are familiar with in the context of used books, music CDs, and movie DVDs by treating used copies of software similarly.

Under the district court's Vernor v. Autodesk ruling, the enforceability of these terms would have had to be weighed against the countervailing policies implicit in the Copyright Act.

The Ninth Circuit's decision sets out a summary of the policy questions involved and suggests that Congress could amend the statute if it wanted a different result.

Here's the analysis: Although our holding today is controlled by our precedent, we recognize the significant policy considerations raised by the parties and amici on both sides of this appeal."

For instance, Autodesk argues in favor of judicial enforcement of software license agreements that restrict transfers of copies of the work.

Vernor contends that our decision (1) does not vindicate the law’s aversion to restraints on alienation of personal property; (2) may force everyone purchasing copyrighted property to trace the chain of title to ensure that a first sale occurred; and (3) ignores the economic realities of the relevant transactions, in which the copyright owner permanently released software copies into the stream of commerce without expectation of return in exchange for upfront payment of the full software price.

The ALA fears that the software industry’s licensing practices could be adopted by other copyright owners, including book publishers, record labels, and movie studios.

Congress is free, of course, to modify the first sale doctrine and the essential step defense if it deems these or other policy considerations to require a different approach.