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FYI: You may not own the car you just bought

FYI: You may not own the car you just bought

…at least not all of it

Do you own the software, or just a license to own the software? That’s the question currently being posted to the U.S. Copyright office by manufacturers and lobbyists who are fighting to prevent innovators from changing the way a vehicle’s computer works.

Hard-hitter companies John Deere and GM are leading the charge in a series of hearings before the U.S. Copyright Office, claiming that people who buy cars and other vehicles controlled by sophisticated computers own them subject to an “implied license,” meaning that because the vehicles can’t run without the software that controls the computers, consumers can’t own the software outright.

From the Consumerist:

GM’s claim is all about copyright and software code, and it’s the same claim John Deere is making about their tractors. The TL;DR version of the argument goes something like this:

  • Cars work because software tells all the parts how to operate
  • The software that tells all the parts to operate is customized code
  • That code is subject to copyright
  • GM owns the copyright on that code and that software
  • A modern car cannot run without that software; it is integral to all systems
  • Therefore, the purchase or use of that car is a licensing agreement
  • And since it is subject to a licensing agreement, GM is the owner and can allow/disallow certain uses or access.
  • The U.S. Copyright Office is currently holding a series of hearings on whether or not anyone other than the manufacturer of a car has a right to tinker with that car’s copyrighted software. And with the way modern design goes, that basically means with the car, at all.

    John Deere’s claims go further into detail:

    Thanks to DMCA 1201, John Deere claims it still owns the tractor you thought you bought from it. Instead, John Deere claims you’re really just licensing that tractor:

    In the absence of an express written license in conjunction with the purchase of the vehicle, the vehicle owner receives an implied license for the life of the vehicle to operate the vehicle, subject to any warranty limitations, disclaimers or other contractual limitation in the sales contract or documentation.

    How nice of John Deere to say that your ability to operate the vehicle is really subject to the “implied license” it granted you.

    This idea doesn’t just apply to innovators who want to sell a product or promote their “jailbreaking” skills; if the Copyright Offices sides with the manufacturers, the ruling will apply to tech junkies who seek to “jailbreak” their devices to check for additional functionality, possibilities for increased functionality, and safety issues.

    The hearings started this week, and we expect to hear something by July. We’ll keep you posted as this latest battle for property rights progresses.

    You can read the manufacturers’ claims here.


    Donations tax deductible
    to the full extent allowed by law.


    John Deere, Case, Caterpillar, and several foreign devils thank you very, very much.


    Does this mean that they are going to support that software for the lifetime of the car?

      You wish. More likely they’ll issue a “software update” that will limit your top speed to 50mph and decrease your gas mileage to 27mpg.

      I’ll stick to my ’93 Saturn SL1, which still gets 35mpg in city.

      sequester in reply to Valerie. | May 22, 2015 at 9:04 pm

      An IP Lawyer (anyone care to stand up?) will tell you that many states recognize the validity of the “click through licenses” that accompanies many software programs.

      Funny though, I don’t remember my car coming with a software license agreement on the screen. If it is in the owner’s manual it is well hidden. The paperwork one signs when buying a car usually does not contain a software license.

      So where is the contract I have agreed to?

      legalbeagle in reply to Valerie. | May 22, 2015 at 9:12 pm

      It means that despite their failure to include a real contract with real terms, these firms still want to be able to charge you an annual fee based on a fictitious “Implied contract”.

      They might also be able to control how you sell you car.

      Sorry guys, you gave us a real contract when the car was purchased and it did not include the right terms. Go pound sand.

        platypus in reply to legalbeagle. | May 23, 2015 at 11:56 am

        I like your thinking but further along that line is my question – who is liable for a breach of this (assumed to be valid) contract? Why would GM (or any other manufacturer) not be liable for the failure to protect the software (if it’s 3rd party software)? I have never heard of ‘pass through’ liability. How could such be accomplished without some sort of immunity theory? And why wouldn’t the same rationale also apply to impose liability on the insurance companies issuing comprehensive policies on the vehicle itself (for damage)?

        All I know is that the law does not favor implied conditions in contracts. This should screw up the legal system even worse than it already is, which should be entertaining (in a demented sort of way) to say the least.

          sequester in reply to platypus. | May 23, 2015 at 2:03 pm

          For redistributable software it usually falls on the distributor to present the proper contractual provisions to the user.

          If GM claims “ownership” do they also want to be deemed liable under the “vicarious liability” doctrines in many states in case driver negligence?

      genes in reply to Valerie. | May 22, 2015 at 9:19 pm

      Does MS support any OS for the life of the PC or Laptop it came on?

    Hey, some things shouldn’t be “jailbreaked”.

    Like airplanes.

    I think most of the time the bank owns the vehicle.

    OnTheLeftCoast | May 22, 2015 at 8:33 pm

    Yeah, and then they’ll lobby for legislation mandating destruction of any car for which the manufacturer is no longer actively supporting the software. It’s for the children.

    Drive Linux !!

    nordic_prince | May 22, 2015 at 8:47 pm

    I heard about this. It takes a special kind of stupid to come up with crap like this ~

    An implied license isn’t worth the paper it’s not printed on.

    I suspect the intent is just as much to avoid liability from a highly aggressive plaintiff’s bar who play to juries that like to assign blame to the entity with the deepest pockets. Do scenarios like this sound familiar? “Teenage girl speeds drunkenly around curve in the rain, flips vehicle, killing herself and her three friends in the SUV. Manufacturer assigned 99% blame, driver 1% blame. $100 million verdict to be appealed.”

    Consider also that government mandates for fuel economy and pollution control have a lot to do with how a vehicle can be allowed to operate; if an end-user alters the software to change these settings, the manufacturers don’t want to be blamed.

    To be sure, there’s some profit in licensing and branding involved; have your vehicle serviced at your authorized service representative who proudly displays the brand X logo, etc.

    Also, consider that in the UK, and perhaps more of Europe, where vehicle codes are required to be public, thieves spoof vehicle unlock codes very easily (you can find articles about this happening to some popular, and expensive, German vehicles). Vehicle theft in seconds can occur.

    In any case, I do want to point out that this is not as simple as it may have seemed at first blush.

      randian in reply to Zhinlo. | May 22, 2015 at 11:10 pm

      “Also, consider that in the UK, and perhaps more of Europe, where vehicle codes are required to be public”

      Everybody can find out the radio unlock codes to my car? That’s insanely stupid!

        Paul in reply to randian. | May 22, 2015 at 11:34 pm

        There is a difference between source code and cryptographic keys. The code defines the logic, but encryption algorithms cannot (theoretically) be broken without the crypto keys.

      Sanddog in reply to Zhinlo. | May 22, 2015 at 11:17 pm

      If the plaintiff wants to allege the vehicle’s software caused whatever damage they’re going after, make them prove it.

    Is the license transferable or do I have to return the vehicle to the manufacturer?

    This could be part of a campaign to prevent the aftermarket industry from supplying chips which can communicate with a car’s onboard computer.

    I’m sure Government Motors would be very happy if the consumer must bring his car in to a GM franchisee whenever a warning light appears on his dash, rather than taking it in to his regular local garage.

      Paul in reply to tom swift. | May 22, 2015 at 11:40 pm

      It sounds similar to Xerox versus the after market printer cartridge companies, doesn’t it?

      These car companies are so ossified, they’re grasping at straws here. Thery’re going to piss off their customers and create more openings for more competitors to kill them. Then they’ll whine for more bailout money.

    it won’t be long and we’ll all be able to manufacture our own cars from printed parts.

    Bruce Hayden | May 22, 2015 at 11:46 pm

    Interesting problem. Logically, shrink wrap/click wrap licenses are highly suspect. One big problem is that you don’t see the terms of the license until after you have agreed to it. So, how do you know the terms of the agreement? You don’t, which is why UCC II just ignores after supplied terms for non-merchants (which, here, means consumers). And absent those after supplied terms, what you have bought is a copy of the software, and not a license to it.

    That is how the law was supposed to work. But then a federal judge, Easterbrook (if I remember correctly) decided that everyone was doing it (shrink wrap licenses), and so they must work just the way that the big software companies wanted them to (I.e. Transactions were icenses and not sale of single copy of software), and therefore both the Restatement of Contracts and UCC II were irrelevant. I believe this is the same judge who ignored Heller and McDonald, and determined that assault weapon ban was Constitutional because, well, the city wanted it to be. I just get the feeling that just wanting a specific result is sufficient justification for this judge.

    Moving on – since then, whenever the question of whether you had a sale of a single copy of software or a license is raised, everyone seems to look back at that badly decided Easterbrook decision, and say “license”, without bothering to discuss it in terms of contract formation fundamentals.

      Bruce Hayden in reply to Bruce Hayden. | May 23, 2015 at 9:12 am

      Thinking about this a bit more, figured that it needed a bit of fleshing out.

      When you buy software, or really something with software inside it, the natural assumption is that you bought the software. Or, more accurately from a legal point of view, that you bought one copy of the creative work with the attached legal right to execute it as expected. A lot of companies don’t like this though because of the First Sale doctrine, which says that once they sell the software, or really the object that it is embedded in, whether that be a diskette, DVDS, a toaster, or even a car, they have lost control over that physical copy of the software. First Sale means that whomever buys the copy now controls it.

      Which is why the big software vendors, like Microsoft, etc., invented shrink wrap licenses. The theory was that you would have to agree that you had the software under license, instead of having purchased that copy of it that you just bought before you could execute the software. Except that you were not provided this critical element of the contract between you and the software vendor before you went through line and paid for the software at the cashier. You were not put on formal notice of this contract provision until hours, if not years later, when you installed and activated it.

      Anyone who has survived Contracts in law school can probably see the problem with that, since there was no real meeting of the minds between the customer and the software vender. Contract formation is obviously a legal question, and there are two somewhat primary sources to guide the law when heading off into uncharted territory, as this part of the law did, a couple decades ago. One is the Restatement (Second, I believe, at that time) of Contracts. The other is the official commentary for the Uniform Commercial Code (UCC) II (sale of goods). Restatements are put together by panels of experts in various parts of the law, explaining the theory behind that section of the law. While there are a number of these, probably the most important are the Restatements of Contracts and of Torts. The result from both the Restatement and UCC II was that since customers thought they were buying a copy of the software, that is what they bought, instead of the license to use the software that the software venders wanted.

      You can probably see how this ties into the current discussion. You go to the car dealer, and buy a car. Or, for me, an individual. You think that you have bought everything that you need for it to work, and that inevitably includes a copy of the software. Except that GM doesn’t want to have sold you the copy of the software (thanks to the First Sale doctrine), but rather licensed you to use it. They don’t bother to tell you this before you buy the car. Rather you find out years later. Think of it as secret provisions to the sales contract that they alone know. Which is why the law should be clear here – except that we live in an era of rampant crony capitalism, where the biggest companies buy whatever law they want.

    I could understand were the manufacturers to state,in the title transfer or the sales agreement or in the warranty itself, that the warranty is voided if the software is replaced or modified by third parties. Yet that doesn’t seem to be the case here so maybe the manufacturers will find a compliant judge willing to rule in their favor.

    But, nah, that would never happen, would it?

      Actually they do void the warranty if a customer puts in aftermarket software. GM’s policy is outlined in the warranty manual included with the owners manual. Owners can get around this by uninstalling the aftermarket software before taking the vehicle in for repair.

    Another reason not to buy GM cars. After the corrupt auto union bailout I swore off Chrysler and GM.

    Seems analogous to Microsoft telling you that you can’t install an operating system other than Windows on the Windows-based PC you just bought. They may own the copyright to the code, and you may not be able to tinker with it, but they do not own the hardware, which was purchased outright. You should be able to remove the OS from the computer and replace it with another. I don’t see a copyright infringement in such an act.

    I owe my computer, but I can only license the operating system. However, there are other operating systems I could use if I am unhappy with one. Isn’t this more of an antitrust issue? Once a car is paid off and you own the title, shouldn’t you be able to change the software?

    Does this mean that the auto manufacturers are taking on liability as well?

    I see this more as a push to put shops and mechanics out of business and monopolize the industry.

    I can see its also going to create a market for vehicles without these computers so this is no longer an issue.

      smalltownoklahoman in reply to TB. | May 23, 2015 at 7:11 am

      Somewhat agree. I could also see that a lot of these shops instead agree to become “licensed” to operate on these vehicles for an annual fee and the costs of these licenses being passed on to customers. I also agree with Exiliado about Linux, could be a huge opportunity for them if this is allowed to go through.

    CloseTheFed | May 23, 2015 at 9:56 am

    Fact is, a lot of men in my area LOVE to alter their cars for better performance, changing chips, et cetera, and for off-roading. If the car mfgrrs. are going to prohibit these changes, a whole after-market industry will be affected, and an entire leisure activity will be affected also.

    This is THE pits. Personally, I love a good junkyard!

    The absolute solution to this legal pissing match is to opt out. Buy, restore, and drive pre-1980 vehicles only. Most states issue no-fee classic car plates for any car older than 30 years which is an added benefit.

    Never play a rigged game unless you must play.

    My first thought is of Linux. So, if these companies are claiming they are licensing the code, then the car can come with software and an open source code be plugged in. That means these companies will be forced to provide standard API’s and charge separately for the hardware and the software. That will be a nightmare for the companies. This will not be just MS Windows and the various hardwares, this will also lead to forcing Apple to open up their hardware. The whole thing will get quite nasty.