What Could YODA Mean For How IT Solutions Providers Sell Technology?

By Christine Kern, contributing writer

In the fall, Rep. Blake Farenthold (R-Texas) introduced a bill that could have a universal impact regarding the resale of technology.  Called the You Own Devices Act (YODA), the bill addresses embedded software that is increasingly prevalent in telecommunications and technology.

Introduced in the House on September 16, 2014, YODA “amends federal copyright law to allow the owner of a machine or other product operated in any part by a computer program to transfer an authorized copy of the computer program, or the right to obtain such copy, when the owner sells, leases, or otherwise transfers the machine or product to another person. Prohibits such right to transfer the computer program from being waived by any agreement.”

The bill also “requires any right to receive modifications to such a computer program relating to security or error correction that applied to the owner of the machine or product to apply to the person to whom the machine or product and the copy of the computer program are transferred,” and “Prohibits this Act from being construed to permit the owner to retain an unauthorized copy of the computer program after such a transfer.” Many manufacturers currently require second owners to buy new licenses before they can receive such information.

The bill is currently under review by the Subcommittee on Courts, Intellectual Property, and the Internet.

The controversy regarding this bill is due to the fact that manufacturers claim that the software is “owned” by them or by the device, not by the purchaser, according to The Hill. When buyers purchase the devices, often they are unaware of restrictions placed on software because the manufacturer is the licensee and the restrictions are embedded in the fine print of the sales agreement.  

According to this editorial in the LA Times, Manufacturers take these steps in order to protect their intellectual property — in particular, the proprietary copyrighted software that makes their devices work. The “first sale doctrine” in copyright law gives buyers the right to sell, lease, rent or give away a work after they buy it, but it does not allow them to reproduce that work. This is the concept leveraged by manufacturers to impose after-sale restrictions that effectively eliminate a buyer’s first-sale rights.

If it is passed, YODA would have the greatest impact on businesses rather than consumers, since businesses are more likely to encounter restrictions. 

The legislation faces stiff opposition from copyright holders and the intellectual property lobby, who have won ever more restrictive copyright law over the last two decades with fights about both businesses and individual purchasers.

As for the bill becoming law, as the LA Times put it, “Farenthold’s bill seems like a consciousness-raising exercise for now.”