Autodesk AutoCAD New York: Copyright Infringement and the First Sale Doctrine

The First Sale Doctrine, codified in 17 U.S.C. § 109, allows the owner of a legally made copy of a copyrighted work to resell that specific copy without the copyright holder’s consent. In practice, this doctrine protects the resale of books, CDs, and DVDs. But the key legal distinction arises when the copy is licensed, not sold.

In the context of software such as Autodesk AutoCAD, U.S. courts have drawn a firm line between ownership and licensing. If a user is merely granted a non-transferable license, the First Sale Doctrine will not protect the redistribution or resale of that software.

In 2010, the Ninth Circuit Court of Appeals ruled in a landmark decision: Vernor v. Autodesk, Inc. The case involved Timothy Vernor, who had acquired secondhand copies of AutoCAD Release 14 from Cardwell/Thomas & Associates, Inc. (CTA), a company that originally licensed 10 copies of AutoCAD.

Autodesk’s license agreement included several strict terms:

• The company retains title to all software copies.
• Users receive a nonexclusive, nontransferable license.
• Transfers, rentals, and modifications are expressly prohibited.
• Users must obtain an activation code tied to the serial number of their specific version.

After purchasing used versions at an office sale, Vernor attempted to resell the software on eBay. Believing himself protected by the First Sale Doctrine, he filed a declaratory judgment seeking confirmation that his resale was lawful. The district court initially agreed.

However, the Ninth Circuit vacated that decision, emphasizing that CTA had never owned the copies—they were licensees. Because Autodesk’s license imposed transfer and usage restrictions and clearly stated that users held only licenses, CTA lacked the legal right to resell. Therefore, Vernor could not lawfully resell those copies either.

Another argument advanced by Vernor involved Section 117(a) of the U.S. Copyright Act, which permits the making of copies as an "essential step" in the utilization of software—commonly to allow installation on a personal device.

The court clarified that this protection only applies to owners, not licensees. Since neither CTA nor Vernor had ownership of the AutoCAD copies, the essential step defense did not apply. Consequently, installing the software even for personal use without a valid license could constitute infringement.

Autodesk maintains a rigorous system to enforce its licensing terms:

• Every AutoCAD copy is assigned a unique serial number.
• Installation requires an activation code tied to the product.
• Users must verify their serial number with Autodesk to receive the code.
• Unregistered or upgraded copies cannot be reactivated without Autodesk approval.

This system makes it nearly impossible for unlicensed parties to install or operate the software legally. More importantly, it provides evidence that Autodesk enforces licensing with clear intent and technical mechanisms, supporting the argument that its users are licensees.

New York software users fall under the jurisdiction of federal copyright law. Although the Vernor decision was issued by the Ninth Circuit, its reasoning has been persuasive nationwide, including in New York federal courts.

This means:

• Selling a used copy of AutoCAD in New York without Autodesk’s consent is likely infringement.
• Users who install AutoCAD without a license or on unauthorized devices may breach both contractual and copyright obligations.
• Even if purchased secondhand, such software may not be lawfully resold or reinstalled.

In New York, purchasers of Autodesk AutoCAD software are typically considered licensees, not owners. This status prevents them from claiming protection under the First Sale Doctrine or Section 117 of the Copyright Act.

The Vernor v. Autodesk ruling makes clear: where a software vendor retains title, restricts transfer, and limits use, the end user is not the legal owner of the copy. Resale of AutoCAD in such cases is not just a contract violation—it is federal copyright infringement.

As software licensing continues to dominate the digital marketplace, New York users should be cautious: owning a disc or installer doesn’t mean owning the software itself.