Legal Definitions - Computer Software Rental Amendments Act

The Computer Software Rental Amendments Act is a United States federal law enacted in 1990. This legislation is a part of copyright law and was specifically designed to protect the intellectual property rights of software developers.

In essence, the Act prohibits anyone who has purchased a copy of computer software from then renting, leasing, or lending that software to others for commercial profit. This means that while you own the physical copy or license you purchased, you cannot turn around and start a business renting it out to other users. The law aims to prevent a secondary market that could undermine the original software publishers' ability to control and profit from the distribution of their products.

Here are a few examples to illustrate how the Act applies:

• Example 1: A "Software Library" Business

  Imagine a startup company, "GameShare," that purchases multiple copies of popular video game software. GameShare then advertises a service where customers can pay a daily or weekly fee to "rent" a copy of a game, much like a video rental store. This business model would be in direct violation of the Computer Software Rental Amendments Act. Even though GameShare legitimately purchased the software, the Act prohibits them from leasing or renting it out for commercial gain, as this activity would compete directly with the original game developers' sales.

• Example 2: Professional Software Lending for Profit

  Consider an individual who buys an expensive, specialized architectural design software program. Realizing the high cost of the software, they decide to offer it to other freelance architects in their city, allowing them to "borrow" or temporarily use the software for a one-time fee. This fee is less than purchasing a full license but still generates income for the individual. This scenario would also violate the Act. The individual, as a purchaser, is lending the software for commercial gain, which the law explicitly forbids to protect the software publisher's market.

• Example 3: Online Access Service

  A tech company develops an online platform where users can pay a monthly subscription to gain temporary access to a suite of high-end graphic design and video editing software. The tech company has purchased legitimate licenses for these programs and hosts them on its servers, essentially "renting" out usage time to its subscribers. This practice would fall under the prohibitions of the Computer Software Rental Amendments Act. The company, as a purchaser of the software, is generating commercial profit by providing temporary access (akin to leasing or renting) to the software, thereby infringing on the original software developers' exclusive rights to control commercial distribution.