Why You May Not Own the Products You Buy [e183]

April 29, 2015

Nasir and Matt talk about John Deere’s recent filings with the Copyright Office and how them and others are trying to protect their products through the argument of implied licenses.

Full Podcast Transcript

NASIR: All right. Welcome to our podcast where we cover business in the news and add our legal twist. My name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: So, what are we doing today, Matt? Should we continue with our podcast today?

MATT: I was thinking about writing a “Dear John” letter.

NASIR: Wow. That’s a really great transition.

MATT: It’s not even a pun or even clever.

NASIR: It’s not even a pun. You just took John Deere and just made it Dear John.

MATT: I know you don’t watch the NBA playoffs – or at least I don’t think you do.

NASIR: I hear about it.

MATT: One of my favorite NBA players of all time, Reggie Miller, he’s long retired but he does the play-by-play for games and he said something, it was some game, I think, last Thursday or Friday, and he said something about, “They’re doing blah blah blah with, like, Steph Curry not on the floor.” He’s like, “No pun intended,” and he said that statement and I was just sitting there and I was like, “That makes no sense. What you said was not a pun at all.” I was like, “I can’t be the only one who picked up on that,” and, the next day, I looked on this site and the title was like, “Reggie Miller has no idea how puns work.” It’s basically you would just make a statement and then he said, “No pun intended.” There was no connection at all. It was just a sentence.

NASIR: That reminds me of Michael Scott’s use of the phrase “Catch 22” in The Office. Catch 22. He also does not know what that means.

MATT: Well, circling back to the Dear John thing, this is a John Deere theme story, the tractor company.

NASIR: Also big in Indiana, right?

MATT: Yeah, probably. I would assume, I guess, yeah. I’m sure there’s other companies but I know I worked at a place that had lots of John Deere stuff. But, yeah, this is a pretty interesting issue and it’s not just John Deere. I know GM has been big on this as well. We’re talking about ownership. What John Deere is saying is it’s filed something in…

NASIR: Yeah, US Copyright.

MATT: US Copyright Office, yeah, saying that, you know, people shouldn’t be allowed to modify the tractors. What they’re saying is, “We have our equipment that we sell to customers and it’s protected by copyrights.” I think the key part for this situation is the tractor has a chip with some code in it, this software, and so you don’t actually own the tractor. It’s an implied license for the life of the vehicle or the life of the tractor to operate that. It’s a pretty interesting subject because, you know, you go out and buy something, it’s not just tractors, too. I mean, the majority of the population is not going out and buying these big machines because where would you park it? What’s another good example? Like, iTunes music or something like that. Or GM, like I said, so cars, if there’s some sort of software in it. So, you go out and buy a product, you know, you think you own it but some of these companies are saying, “Well, you don’t actually own it. It’s just an implied license because we have the copyright protection on this software.”

NASIR: I would say this is pretty complex. I mean, it’s a very sophisticated argument and kind of goes very closely to John Deere’s approach on protecting its intellectual property. It might be a myth; I don’t know if people think that or not but a lot of people think that John Deere owns the color green and no one can use it. It is true that the colors – the green background with the yellow logo and writing – is part of their trademark, but they don’t necessarily own it. But, at the same time, you know, there are other machines that can have that color. The exact same color? I don’t know. That shade of green with the yellow and so forth? Probably not; that would be more close to the trademark infringement. My point is that John Deere is finding ways to even more restrict use of its intellectual property. And so, what Matt’s discussing regarding the ability to modify your tractor software, it does sound kind of weird now but, really, it’s not too strange in the last four or five years with the passing of the Digital Millennium Copyright Act where, you know, you guys may be more familiar with the restrictions that you may have, for example, in downloaded movies or music or even being able to unlock your iPhone or your iPad, and these kinds of restrictions are all through copyright law – believe it or not – and John Deere is saying, “Look, we have software that is protected under DMCA and copyright law as well and so, therefore, it should have the same kind of protections.”

MATT: It’s a weird thing to kind of wrap your head around. There’s some other articles that were posted saying, you know, “We need to stop this because this is destroying the idea of ownership,” things like that, but I don’t think they necessarily understand or have fully thought out the reasoning behind it. It’s not like these companies are selling a product to consumers and, you know, claiming that it’s more of a rental or whatever they want to call it. You know, they’re calling it “implied license.” But these companies are wanting to prevent any sort of alterations or modifications to the product by going into the code or going into the software and changing it that way. I mean, what’s a classic example? A classic example would be jailbreaking an iPhone, is that the right?

NASIR: Yeah, unlocking, jailbreaking, yeah.

MATT: Yeah, something like that. And so, why are these companies so concerned about these sort of things happening? Like John Deere, why does it care if someone buys a tractor and they make modifications to it and they change it? Is it safety concerns? Is it branding? Or they just really have a strong hold on ownership? Is it like a chef where you go to a restaurant and you order something and there’s no modifications to the menu because this is the way that it needs to be? I mean, that’s a weird analogy but…

NASIR: Yeah, I understand. There has been a general pushback in these kinds of restrictions because, you know, when you buy something, there is this understanding that you own it. Going back to jailbreaking and unlocking your phones and being able to modify, you know, for example, when you buy a vehicle and a car, you can repair it, modify it however you want. But, now, because it has certain technology that’s not physical, that is in software form, now you can’t modify that. What’s interesting about the DMCA is that, even if you’re not doing it for non-pirating purposes, okay? Technically, the DMCA makes it illegal to circumvent these restrictions – I think they call it “digital rights management” – and that’s the software, the protection, the security protocols that are used so that you can’t copy that, but even circumventing that in order to jailbreak your phone or whatever is enough to violate that. Now, all of a sudden, you know, those that are in their cars, I’m sure would want to be able to take off the software governor that restricts the maximum speed because they want to race their car or mess with the timings of their engine and so forth. But, now, because of this DMCA or copyright law, you can’t do that and that’s basically what John Deere and other vehicle manufacturers are also starting to argue, by the way.

MATT: I don’t know if it’s necessarily – it’s obviously a protection issue but it’s not really preventing competitors from coming in and looking into things. I mean, there’s a difference between somebody buying something and modifying it through the software as opposed to somebody buying it and then just copying what they did to produce their own separate thing. Like, there’s going to be infringement on that. I get where they’re coming from but I still think this is a pretty weird idea and I don’t know if a lot of consumers necessarily even know about this or know how a lot of these things work. I think it’s one of those things where people buy something and they just assume that they own it, full and outright. If they really knew the details behind this, they’d probably get upset about it. But, at the end of the day, what’s the alternative? You don’t have to buy it. You can buy something else. Maybe not a John Deere tractor but, you know… if all the car companies are doing this, that’s one thing; but, if only one or two, then there’s alternatives.

NASIR: You know, copyright law, trademark law, and these kinds of things actually encourage competition to the extent that people aren’t penalized for innovating and so forth – or actually rewarded for innovating – but it seems to me this kind of slow creep of big corporate product control doesn’t really go towards the protection of innovation but rather it’s starting to push back the other way. I think, rightfully so, there is a lot of backlash from these kinds of claims and I’m kind of glad this kind of claim by John Deere is making the attention that it is.

MATT: I was trying to see when they submitted this proposal or whatever they submitted to the Copyright Office just to see because we’re going to get some sort of decision on this in the near future, I believe.

NASIR: The aspect that they alleged that it’s an implied license is interesting because what they mean is that, when someone bought a tractor, there wasn’t in there specific expressed license that you can use this and it’s only for temporary purposes. And so, what they’re saying is that, because we didn’t assign you the license or the ownership to this intellectual property, just because you bought the hardware doesn’t mean that you own it. I wonder if, in the future, they’re going to start, like other software developers say, “Okay, we’re going to sell you this tractor but sell you with it a license agreement for the software that restricts your use for modification.”

MATT: Yeah.

NASIR: Everyone’s pretty much accepted that, if you buy a book from the bookstore, you’re free to sell that at a garage sell. But, if you go to amazon.com and download an ebook and print it out, you can’t sell that. It’s kind of a cultural acceptance but, not only that, it’s much easier for Amazon to put in its terms and conditions that, “Hey, you can’t sell this ebook.” So, they could do the same thing with the tractor and have a cultural shift. But I would find it strange that farmers and other users of tractors alike would be too tolerant with that kind of shift, you know?

MATT: Yeah, I bet we’ll see them go that route as well. What’s one other thing that someone’s going to sign to buy something? They might not even notice.

NASIR: It’s going to slowly creep into more corporate control of this stuff.

MATT: They’d buy this big tractor and it comes with a CD or a disc that they have to put in their computer to accept a license agreement.

NASIR: Press ACCEPT or whatever.

MATT: Well, that’s a crazy thing too and I think GM – I don’t know if they did this or they just threatened to do this – they’ve even talked about locking people out the car because they have the power to do that which is crazy. I mean, I think that’s going a step too far but they really want to protect what they have.

NASIR: Well, for example, Tesla, the car actually gets updates from corporate and that’s where things are headed. Your hardware that you’re using has very little hardware. It’s mostly software that’s actually running the actual brains of it. It’s not as simple as it was. I think everyone can relate and understand to the concept but it’s just like, “Are we there yet? Do we want to stretch it that far?”

MATT: Yeah. So, we’ll have to keep an eye on this with these claims that are filed because I think this will be a pretty big thing that’ll affect a lot of different companies and products and consumers as a whole. It should be pretty interesting

NASIR: Very good. So, I think that’s our episode. I want to make sure everyone is aware of our iTunes channel to be able to leave a five-star review. That helps us out quite a bit.

MATT: You won’t own it.

NASIR: Yeah, you don’t own this podcast either; you just have an implied license to listen to it.

MATT: One last thing, you mentioned the thing about the colors of John Deere, I mean, wasn’t that the exact same colors as that, remember that New Jersey pizza place?

NASIR: Yeah, it was.

MATT: With the turnpike logo or whatever? It was like the exact same colors, right?

NASIR: It was, and, if they were using it in the similar industry, then I think there would be a definite likelihood of confusion there.

MATT: Yeah.

NASIR: Even though there was already a likelihood of confusion. Actually, I think what ended up happening with that case is it was dismissed, but not on substantive grounds, right? It was because of the location of when it was filed or something. I can’t remember.

MATT: Yeah, I don’t recall either. I should have never brought it up.

NASIR: Yeah, most people don’t even know what we’re referring to. You have to go back to a very early episode.

MATT: Yeah, it was a while ago.

NASIR: Yeah. Okay! All right. Thanks for joining us, everyone.

MATT: Yeah, keep it sound and keep it smart!

Legally Sound | Smart Business

By

The Podcast Where Nasir Pasha and Matt Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to info@legallysoundsmartbusiness.com.

Get Business Legal Updates

Please provide your full name.
Please provide a valid email address.
We respect your privacy, and we will never share your information. Unsubscribe at any time.
Legally Sound Smart Business cover art

Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
Apple Podcast badge
Google Podcast badge
Spotify Podcast badge

Latest Episodes

July 14, 2021

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

June 16, 2021

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific…

February 4, 2021

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them – is there a “right way” to fire an employee? We would like to thank our guests for this episode: Amr…

December 2, 2020

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and…

November 16, 2020

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we’re marking this down in the ‘wins’ column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect…

September 15, 2020

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping…

July 31, 2020

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now…

June 12, 2020

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but…

May 11, 2020

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of…

April 4, 2020

One word–interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment…

April 4, 2020

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It’s a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the…

April 4, 2020

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can…

August 7, 2019

GrubHub is subject to two “matters of controversy” that have likely become common knowledge to business owners: “fake” orders and unfriendly microsites.

May 28, 2019

In this podcast episode, Matt and Nasir breakdown the legal issues of the subscription industry’s business on the internet. Resources A good 50-state survey for data breach notifications as of July 2018. California Auto-Renewal Law (July 2018) Privacy Policies Law by State Why Users of Ashley Madison May Not Sue for Data Breach [e210] Ultimate…

March 12, 2019

In recording this episode’s topic on the business buying process, Matt’s metaphor, in comparing the process to getting married probably went too far, but they do resemble one another. Listen to the episode for legal advice on buying a business.

December 3, 2018

Nasir and Matt return to discuss the different options available to companies looking to raise funds through general solicitation and crowdfunding. They discuss the rules associated with the various offerings under SEC regulations and state laws, as well as more informal arrangements. The two also discuss the intriguing story about a couple who raised over…

July 24, 2018

Flight Sim Labs, a software add-on creator for flight simulators, stepped into a PR disaster and possibly some substantial legal issues when it allegedly included a Trojan horse of sorts as malware to combat pirating of its $100 Airbus A320 software. The hidden test.exe file triggered anti-virus software for good reason as it was actually…

April 17, 2018

Attorneys Matt Staub and Nasir Pasha examine Mark Zuckerberg’s congressional hearings about the state of Facebook. The two also discuss Cambridge Analytica and the series of events that led to the congressional hearings, the former and current versions of Facebook’s Terms of Service, and how businesses should be handling data privacy. Full Podcast Transcript NASIR:…

March 10, 2018

The Trump presidency has led to a major increase in ICE immigration enforcement. It’s critical for business owners to both comply with and know their rights when it comes to an ICE audit or raid. Nasir, Matt, and Pasha Law attorney Karen McConville discuss how businesses can prepare for potential ICE action and how to…

February 5, 2018

New years always bring new laws. Effective January 1, 2018, California has made general contractors jointly liable for the unpaid wages, fringe benefits, and other benefit payments of a subcontractor. Nasir and Matt discuss who the new law applies to and how this affects all tiers in the general contractor-subcontractor relationship. Click here to learn…

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how…

December 7, 2017

In recent months explosive amounts of high profile allegations of sexual harassment, assault, and varying acts of inappropriate behavior have transcended every sector of our professional world. With a deluge from Hollywood and politics, and the private workforce, accusations have inundated our feeds and mass media. This harassment watershed has not only been felt within…

November 16, 2017

If you are not familiar with the EB-5 program started in 1990 to give green cards to certain qualified investors in the United States, then you may not have been alone a few years ago. Currently, the EB-5 program has since exploded since its inception and now hits its quotas consistently each year. The program…

October 10, 2017

Government requests come in multiple forms. They can come in as requests for client information or even in the form of investigating your company or your employees. Requests for Client Information General Rule to Follow Without understanding the nuances of criminal and constitutional law and having to cite Supreme Court cases, any government requests for…

August 24, 2017

Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

June 23, 2016

Nasir and Matt discuss the criminal charges facing FedExinvolving the alleged transportation of illegal drugs. They also talk about how business owners should address working with customers that may be breaking the law.

June 15, 2016

The guys return after a long break to discuss why Yahoo is auctioning off over 3,000 patents and how this decision will affect the longevity of the company.

May 25, 2016

Nasir and Matt discuss the increase in the salary thresholdfor exempt employees and how employerscan try to avoid paying overtime as a result.

May 18, 2016

Nasir and Matt discuss the Baltimore law that makes it very difficult to operate food trucks in the city. They also discuss all the legal restrictions tohaving a food truck.

May 11, 2016

Matt listens to Nasir recap the developing battle in his hometown of Vandalia, Ohio over whether a Dunkin Donuts can move into a location in close proximity to a local favorite donut shop. They then discusswhether the issue is more legal or personal.

May 9, 2016

The guys kick off the week by discussing a Nevada employee who is claiming she was fired for not supporting the Scientology beliefs of her employer.

April 27, 2016

The guys discuss the massive floods in Houston,how employers responded, and why one meteorologist became a local hero. They also discuss the steps businesses should take in preparing for storms outside the workplace.

April 20, 2016

The guys discuss the boycott of Amazon over the products of an unnamed presidential candidate. They also talkabout how a business should handle a boycott and whether it’s possible to exit one unscathed.

April 13, 2016

Click here to read HubSpot’s response on this topic. Nasir and Matt discuss the trend in startups to compensate programmers and other early employees with stock options and how the company culture at HubSpot isn’t what it seems.

April 6, 2016

Nasir and Matt discuss various lawsuits against social media platforms in which users are accused of artificially inflating their social currency.

We represent businesses.
That’s all we do.

Oh, and we love it.

We love our work. We love reviewing that lease for your new location. We thrive on closing that acquisition that nearly fell through. We’re fulfilled when we structure a business to grow, raise capital, and be legally protected.

We focus on developing close relationships with our clients by being like business partners. A partner who provides essential, personalized, proactive legal support.

We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

Our team is made up of attorneys and staff that share these values and we are retained by clients who want the same.

Pasha Law PC operates in the states of California, Illinois, New York, and Texas.

Meet Our Team

Fractional General Counsel Services

Pasha Law Select offers the expertise of a high-end general counsel legal team for every aspect of your business at a fixed monthly rate. Pasha Law Select is deliberately designed to allow our legal team to be proactive, to anticipate, and to be comprehensive in serving our clients. To be great lawyers, we need to know our clients. We can’t know our clients unless we represent a select number of clients in the long-term. This is Pasha Law Select.

Learn More