d then "sell or otherwise dispose of the possession of the copy" without the copyright holders consent. See Bobbs-Merrill Co. v Straus 20 U.S. 339, 350, 52L. Ed.1086, 28 S Ct 722 (1908).
Under the first sale doctrine, software producers were concerned that companies would spring up that would be able to purchase a copy of a computer program and then lease it or lend it, like a video tape rental store, to the consumer without infringing the copyright on the program. Consumers would then be able to duplicate the programs without having to purchase them and thus infringe the copyright . It would be far too expensive for the copyright holder to identify and sue each individual copier. Software producers, therefore, wanted to be able to sue directly the companies that were renting the copies of the programs to individual consumers.
The first sale doctrine stood as a wall between the software producers and their ability to successfully sue the software rental companies for infringement . Therefore by making the license personal and non-transferable and characterizing the original transaction between the software producer and the software rental company as a license rather than a sale , software producers attempted to circumvent the first sale doctrine and establish a basis in contract law for suing the software rental companies directly.
In 1990, recognizing the problem, the American Congress amended the first sale doctrine as it applies to computer programs and phono records. See Computer software Rental Amendment Act of 1990, Pub.L. No. 101-650, 104Stal. 5134 (codified at 17 U.S.C.A. 109 (b) (West Supp.1991)) Subsequently, only non-profit libraries and educational institutions were allowed to lend or lease copies of software and phono records, See 17 U.S.C.A. 109(b)(1)(A) (West Supp. 1991)
However, the software users insisted that they had an implied right to copy the software because most soft...