Installing Click-Wrap Software Is Copyright Infringement

If we subscribe to the view that software is licensed, not sold, then an interesting paradox arises surrounding "click-wrap" software. The end-user gets caught in a Catch-22 in which he or she must accept the EULA before using the software, but cannot do so without first committing an act of copyright infringement.

The problem is that click-wrap EULAs require the user to run the installation program in order to display and accept (or reject) the EULA. Pursuant to section 117 of the Copyright Act, only the owner of the copy of software is authorized under copyright law to use the software with a computer (using the software with a computer necessarily makes copies). This applies just as equally to the installer program.

Under this theory the end-user does not own the copy of the installer program, and is therefore not allowed to even run the installer. Doing so would be a clear act of copyright infringement. How then can the user accept the EULA and begin lawfully using the software?

The only way to avoid this Catch-22 would be to allow the end-user to read and accept or reject the EULA without having to first run any licensed software. This could be done in a couple of ways:

1. The installer program could be sold outright to the user, so that the user is the owner of the copy of the installer and may therefore legally use the installer.
2. The end-user could be required to accept the EULA before the software is even handed over to them.

The first option would require the installer program to reside on its own media, because the legal definition of a "copy" means the physical media on which the copy is recorded. The end-user can't own the installer and not own the other software if both the installer and other software are on the same disk. If they are on the same disk, then either the end-user owns both or the end-user owns neither.

The second option would make licensing software more like entering into normal, enforceable, contracts. For instance, the end-user would be presented with the license at the point of sale and would be required to accept it before taking possession of the software. The seller would be required to make acceptance of the software publisher's EULA a condition of the contract for sale. If the buyer refuses to accept the EULA, then the seller refuses to sell the license to the buyer.

Practically no retail software is ever sold in either of the above two ways. Accordingly, if the courts want to decide that software is licensed, not sold, then they must also come to the conclusion that virtually every person who has ever installed "click-wrap" software is a copyright infringer.

The other more sensible option, of course, is to come to the conclusion that the software is sold outright.