Transferring sample set licences

I have a general question regarding transfer of sample set licences from one user to another.

From time to time I've decided to cull my large collection of sample sets by selling licences of a few sample sets which I find myself no longer using. In doing so I've been able to fund the ongoing upgrade of my Hauptwerk console, while at the same time putting some fine sample sets into the hands of other Hauptwerk users. Some of these folk might otherwise not have been able to acquire these instruments at all had they been required to pay full price.

While a licence transfer process exists, the process itself is complex.

Purchasing a new licence is fairly straight forward, but transferring a licence is necessarily more detailed as there are many more steps involved. I'm not questioning the need for these details to be addressed. For example, before a licence can be authorised in a purchaser's system there must be proof that it has been removed from the seller's system. At present this involves a back-and-forth process involving multiple exchanges of licence file requests and updates.

I am concerned, though, with what appears to be a lack of consistency and at times of clarity with the licence transfer process.

Different sample set producers appear to have different ideas of how the process works, with some being quite unsure. Some are quite happy to facilitate the process, while others appear reluctant. There seems to be no standard licence transfer fee as the amount charged varies significantly from one producer to another. There can also be significant delays, at times greater than a week, from start to finish. Also, it's only possible to transfer a licence for a sample set which has been authorised by way of a dongle update as there's currently no legal way of transferring an unencrypted licence from the original purchaser to someone else, not even by giving it away.

My console upgrading continues, and so does the need for me to occasionally part with another licence or two in order to fund the work. In other words, I will continue to utilise the transfer process into the future from time to time.

As I said at the outset, this enquiry is of a general nature only. I'm not pointing the finger at any person or organisation in particular. As someone who has invested substantially in sample sets over the last 13 years, and who now sees the need to occasionally part with some licences, I am interested to know where things stand regarding possible streamlining of the licence transfer process. I am also interested to hear from others who have either sold a licence or purchased a licence by transfer regarding their experiences.

Andrew

Andrew

EU SOFTWARE LICENCE LAW 101

Since you are in Australia I should first say that I have no knowledge of your local law and some of the following may not be relevant.

However, I too have been frustrated by my experiences with licences, so I will explain as clearly as I can the legal situation in the EU, especially since many sample set producers appear to be (or maybe pretend to be) ignorant of the law.

Disclaimer: I am an academic (not a lawyer) with some expertise in EU IT law. But in law nothing is entirely straightforward, and my space here is limited, so do not go to law based on what I say here without getting independent advice.

The EU law is now quite clear on software licensing, since it has been repeatedly litigated and appealed by unhappy software suppliers all the way to the ECJ (European Court of Justice, the EU's supreme court).

1 Does EU Software Licence law apply to you?

Maybe. The EU law CERTAINLY applies to me as an EU citizen (at least until Brexit) and in this matter also to all sample sets owned by EU residents. Note this includes ALL the non-EU sets I own, even though these sample set producers may have no presence in the EU and invariably pretend that the sale is made under US or other law. It PERHAPS applies to any sample set produced within the EU but initially purchased by someone outside the EU (including any you have purchased as an Australian) because EU sample set producers normally have something in their terms of sale that the sale will be governed by the laws of a member state within the EU.

2 What is a software licence?

The licence is the statement of rights, responsibilities and benefits (including any limitations to them) that the current holder of the licence enjoys. Some of it means what it says.

However, in the EU, the sale of a software licence of unlimited duration is always a TRANSFER OF OWNERSHIP. (This is the key point, and the major difference to the US). Any condition of the licence (and in my experience they all have them!) that purports to limit it to just a "licence to use" is void since it is contrary to the EU's Information Society Directive, and any term that states that the licence holder may not freely transfer or resell the licence to whoever they wish is therefore also void. Subsequent acquirers become the legal owners and have the same right of resale.

The logic is that the sample set supplier has received full and fair payment when it makes the first sale, just as Ford gets full payment if it sells me a new car. Neither Ford nor the sample set supplier are disadvantaged if I choose to sell their products to someone else and neither of them deserve another bite of the cherry.

In legalese, "The first sale of a copy of a program by the rights-holder (or with their consent) in the EU exhausts the distribution right of that copy within the EU".

3 WHAT? Has the EU gone mad? Surely this can't be right?

This is very different to the position in US law, so some assume it must be wrong. Including IBM, Oracle and half a dozen other rich US multinationals who spent millions first lobbying against the directive and then appealing court decisions under it. They lost, repeatedly, and just made the EU more assertive in IT law matters (q.v. GDPR) and EU law itself more clear-cut and watertight.

4 If I actually own the sample set licence in law, why do the suppliers persist in making misleading claims that I don't?

Charitably, perhaps some do not understand the law. But some certainly do and it is hard to avoid the suspicion that it is because those sample set producers wish to encourage "FUD" - fear uncertainty and doubt - amongst their customers to discourage them from reselling which they believe damages their sales.

It is actually legally risky and ill-advised - the deliberate inclusion of such a misrepresentation of law in a software licence most likely renders the contract "unfair" (which, where the buyer is a private individual is itself an offence under EU consumer protection legislation) and may make the entire contract unenforceable.

5 If I sell, who is transferring the licence?

If I sell you a sample set, I am. I own the licence so it is mine to sell you. If you pay for it, you now own it. And you can sell it on in turn if you wish. The original sample set producer does NOT get a choice - they cannot oppose the transfer - and they MUST promptly and freely give the new owner all the benefits of the licence I enjoyed. Just as, when I sell my Ford car, Ford don't get to OK the purchaser or charge a transfer fee (believe me, they would love to!!!) before giving the new owner warranty rights and other benefits.

6 Can the sample set producer make a charge for a transfer?

NO! The transfer of the licence itself from me to you is nothing to do with them. And, by law, they may NOT make a charge for transferring the benefits of the licence.

7 Must the sample set producer support the new owner?

YES. Without hassle or delay. In ALL respects outlined in the licence or implicit in the sale.

The ECJ has ruled that this MUST include giving the new owner free and immediate access to support web sites and exactly the same access to original software downloads and updates etc that were available to the original purchaser.

8 What about encryption and HW's infamous dongles?

Encryption is really NOTHING to do with licences. The licence is a legal document on paper or a web site. And the dongle is - well - a dongle. It holds the keys to decrypt these sets. In legal-speak the combination of encryption and decryption dongle form a "technical measure" to protect rights.

9 Is it lawful for a sample set producer to oppose the transfer of an unencrypted set?

Of course not. Encryption is nothing to do with licences - encrypted, unencrypted, all the same. Dongles are nothing to do with licences. The transfer of the licence cannot lawfully be opposed. The current owner of the licence is always free to sell it and the SSP must always recognise the new owner and extend all licence rights and benefits.

10 Doesn't this amount to the EU condoning fraud?

No. It would certainly be fraudulent and a copyright infringement for me to sell you a licence for a sample set if I continued to use it. (Like ripping a music CD so I have the music on my computer and then selling you the original CD. The EU don't condone that either). It is illegal and a crime.

The ECJ permits and actually encourages the use of "technical measures" to minimise fraud, for example to ensure that the previous owner has relinquished their use of the software when they sell it. Hence the dongles etc.

It is entirely the vendors choice whether to use these "technical measures". But the ECJ has ruled that, if they choose to do so do the suppliers must have administrative systems that impose no expense, inconvenience or undue delay on subsequent acquirers.

The suppliers must make the judgment on whether the increased assurances that the "technical measures" deliver outweigh the requirement to meet the full ongoing cost of promptly transferring the licence benefits to second and all subsequent owners. If suppliers choose to avoid this ongoing financial and administrative burden by not using "technical measures" the ECJ have ruled that suppliers cannot use the resulting uncertainty about whether the original copy is placed beyond use to justify opposing licence transfers.

Apologies for the length of the post. I believe it is accurate: I hope it is clear and helpful.

- Adrian.

Thanks you very much Adrian for this thorough and carefully considered response. I hope that sample set producers in general as well as MDA and Hauptwerk look closely at what you've said.

Clearly the issues relating to copyright and licensing are complex, especially when it comes to the implications of legal differences across the globe. Hauptwerk is an international phenomenon, so licensing of the software and sample sets needs to take this into account.

I am particularly interested in the points you've made regarding unencrypted sample sets, as what you've said is markedly different from the statements and claims of many others.

One point I can make concerns the fee charged for sample set licence transfer. It's my understanding that this fee, which upfront is charged to the person acquiring the licence and is payable to the sample set producer, is in reality to cover the amount charged to that producer by MDA for their time in handling the dongle update process. My question on that point concerns the clear difference in the amount of that fee from one producer to the next, bearing in mind that the fee itself appears to be for the same service.

It would seem that the question of licence transfer has remained in the shadows for too long. Purchasing of new sample sets is by comparison a relatively simple, straight-forward process. However can be no escaping the fact that the transfer of licences can and will continue to take place.

I know that I'm not the only long-term Hauptwerk user who has found that, in time, I am no longer using some of the sample sets I own. In the last year or so I've parted with a number of licences. I believe I've charged a reasonable amount in each instance - not so low as to threaten the sample set producers themselves, or so high that there would be no reason for a prospective purchaser to buy from me, while also allowing for a reasonable recovery by myself of part of my original financial outlay. Also I believe that many of the sample sets formerly licensed to me are now in the hands of users who otherwise would not have been able to afford them had they been required to buy at full price. I am specifically aware of numerous uploads to the Concert Hall by others which have followed from licence transfers of my former sample sets.

When personal computers first emerged as household items in the late 1970's it wasn't long before third-party industries sprang up around the production of compatible hardware and software items. Some computer manufacturers resisted this, just as Laurens Hammond tried to kill off the Leslie speaker with his unsuccessful attempt to purchase the rights from Don Leslie so he could shut down its production altogether. Others embraced the trend, realising that the overall widening of the customer base would, in the end, benefit everyone. In the Leslie instance, Don Leslie didn't sell out to Hammond but continued manufacturing and selling the speakers himself. In turn the Leslie speaker gained enormous popularity among musicians, to the point where Hammond caved in and provided their instruments with dedicated Leslie output sockets in response to immense customer demand which, in turn, led not only to increased sales of Hammond's own products but also avoided seeing many prospective purchasers turn their backs on Hammond altogether.

It's my hope that the process of second-hand sample set licence transfer can be brought out of the shadows to become more streamlined and acceptable within the Hauptwerk community at large. I believe that some sample set producers fear the loss of business if their sample sets change hands instead of always being purchased new. In the long run, I feel it's more than likely that users who start out purchasing their first sample from a given producer set via licence transfer may, in time, turn to that same producer for a new purchase of another sample set, having now experienced the quality of that producer's work first hand.

I hope that in due course the Hauptwerk community at large can be advised of clearer guidelines and processes relating to the second-hand trading of sample set licences.

Andrew

Adrian: thanks for your complete explanation¡

In fact, for those already shown motives I did not went on in a transfer business.I also understand that it is time consuming operation for MDA and the organ producer; so I believe that a small percentage of the current cost of the sampled organ should be included in the transaction and sent to them .
Luis