Honey, have you seen the car’s License Agreement?

"UNIX-Licence-Plate" by KHanger - Own work. Licensed under CC BY 3.0 via Wikimedia Commons - https://commons.wikimedia.org/wiki/File:UNIX-Licence-Plate.JPG#/media/File:UNIX-Licence-Plate.JPG
“UNIX-Licence-Plate” by KHanger – Own work. Licensed under CC BY 3.0 via Wikimedia Commons – https://commons.wikimedia.org/wiki/File:UNIX-Licence-Plate.JPG#/media/File:UNIX-Licence-Plate.JPG

With the penetration of increasingly complex software and technology, the concepts of intellectual property are getting increasingly muddled with the concepts of ‘ownership’ of property and technology. And the latest victim of this debate is something that hits close to the heart of the petrol-head (and perhaps soon-to-be ‘waterhead’ or ‘volthead’), in me – automobiles. This post deals with the copyright-related issues involved in the ownership and sale of ‘goods’ with embedded software, the current legal positions in the US and India, and the implications thereof. This post does not deal with issues relating to software patents. [Long post ahead]


With traditional goods, buying the good meant that the title and ownership of the good transferred to you. But with digital goods, there is an argument being made that buying the good actually only gives you a licence to the digital good. The actual ‘ownership’ of the content therefore remains with the copyright holder. So while earlier you would own the physical copy of the book on your table, you don’t ‘own’ the content in your Kindle, because the latter is only a licensed copy of the digital content. Amlan dealt with a theoretically similar issue in his earlier post here, discussing the difference between ‘piracy’or ‘infringement’, and ‘theft’.

Now, the eBook example is an example where the good in question is simply software. The next level of this debate comes when this software is embedded software/firmware – that is, when the software is embedded into and is an integral part of a good, which you’ve purchased. The question here then is if the embedded software itself is accepted as being only ‘licensed’, does that therefore mean that your ownership over the good itself is restricted by this license, whatever its terms may be?

Do I own my car or not?

This debate is starting to gain attention recently in the US, with arguments made by two vehicle manufacturers, John Deere and General Motors, in two separate instances, at its head. Recently, both these manufacturers submitted certain very interesting comments to the US Copyright Office in their responses to an enquiry into the Digital Millennium Copyright Act (‘DMCA’) regarding embedded software, and how much proprietors of goods can modify them.

John Deere made the same arguments referred to above, that though the owners of tractors manufactured by them owned the tractors themselves, they only licensed the software, and could not modify/remove them, or do anything to them. Recently, General Motors joined John Deere in this claim, stating that “It is [General Motors’] position the software in the vehicle is licensed by the owner of the vehicle”.

If such copyright protection is extended to embedded software, that would mean that if the license terms don’t allow for it, the ‘owner’ (or should I say ‘apparent owner’?) of the vehicle cannot change, edit or remove the software/firmware. This also means the apparent owner cannot go to anyone but the manufacturer’s mechanics for repairs (as even the repair requires you to use the software), and cannot use the ‘good’ for anything not covered by the license’s terms and agreements. For instance, if you have a car which is designed for urban roads, its software may very well actually not allow you to go on rough roads, no matter how much you try to explain to it that that’s just what Indian road-developers think ‘urban’ means. Since the owner cannot ‘modify’ the car without the permission of the licensor either, this also means that he or she would need such permission for any after-market additions – for instance, a new radio, or new tires, or new brakes, so on.

Furthermore, this gives the license-owner an immense amount of power over the ‘good’, as it can make whatever changes to the software it wants to, adding and removing functionalities as and when it deems necessary. An example of this occurred in 200, when over a copyright dispute Amazon deleted certain editions of George Orwell’s 1984 and Animal Farm from the Kindles owned by purchasers, who had purchased the books through valid means. In the illustration cited above, depending on the terms of the agreement, it would arguably usually be up to the licensor to decide what roads the car is meant for, and to change that as it deems fit. Perhaps most crucially, this also means that you cannot remove the software, and cannot therefore install different, custom software that allows you do the above. Furthermore, since the license only applies to the original purchaser, depending on the terms and conditions, you may also be banned from reselling or passing-on such ‘goods’ without the permission of the manufacturer. An important issue herein is that of the first-sale doctrine, the legal position of which in India is quite dubitable. This means that soon enough, taking the argument a step forward, you might legally not be allowed to use an electric kettle to cook Maggi! (Or Top Ramen, if you’ve shifted camps recently).

To understand the effect of these contentions, it is crucial to note here that, increasingly, embedded software is becoming a critical and fundamental component of our vehicles. While such systems are yet to make a notable penetration in the Indian market, they are increasingly commonplace abroad, and it will not be that long before these issues become prevalent in India as well. Nowadays, software control the engine of the vehicle, the security system, the power allocation – everything. And imagine the importance of software in self-driving cars!

And this does not apply to cars alone. As we move more-and-more into the era of the ‘Internet of Things’, the devices we use in our daily lives increasingly controlled by embedded software.

Legal Position in India

The legal position for this in India is a bit muddled. On the one hand, we have the 2005 judgment of the Supreme Court in TCS v. State of AP, which held that while the copyright of a computer program remains with the originator, the moment copies are made, the ‘copy’ qualifies as a ‘good’, and becomes a ‘copyrighted article’, for the purposes of sales tax. Since this was a taxation issue, the issue of ownership was not directly discussed here. Thus, while this categorisation arguably opens the door for defining the ‘goods’ as copyrighted articles separate from the copyright, what that would mean for the owner remains open for discussion.

From this discussion, an argument can be made that since a ‘good’ with embedded software is still a ‘good’ for marketable purposes, it qualifies as a ‘good’ in entirety, including the software, and therefore the owner of the good has the right to treat it however he or she wishes. But at the same time, a counter argument can also be made that the Court’s interpretation was that the ‘copyrighted article’, i.e. the disk, was the good, and that the software embedded in the disk itself was not included in this definition.

Moreover, the above judgment placed heavy emphasis on putting the ‘software’ into a different ‘medium’, the medium being the ‘good’ which was sold, using the term ‘canned software’ in this regard. Thus, while this is relevant in the case of embedded software, it does not address the issue of ownership of digital content, like the eBooks issue discussed above.

These issues are only going to get more complicated as the Internet of Things and 3D printing make it to the mainstream. Even software itself seems to be embarking on a trend of change, from ‘software as a good’ to ‘software as a service’, with Microsoft Windows being the latest and biggest to make the jump. Thus, we seem to be headed towards a future where ‘owning’ is a thing of the past, and where your car’s ‘registration certificate’ and ‘purchase invoice’ are replaced by a ‘license agreement’, with the accompanying ‘licensing fees receipt’.


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1 thought on “Honey, have you seen the car’s License Agreement?”

  1. Jagdish Sagar

    A very interesting post. In India, would the references to “adaptation” in Section 52(1)(aa) or 52(1)(ad) make any difference?

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