The High Court of England and Wales recently decided, in Southwark London Borough Council v IBM,  EWHC 549 (TCC), that the provision of a licence of software was not a sale of goods, so the implied warranty of fitness for purposes contained in the Sale of Goods Act did not apply to the contract. (See paragraphs 94 – 98.)
The court went on, in obiter, to find that software could be a ‘good’ within the meaning of the Act, but in this case it was not sold (paragraphs 96 & 97). Providing the software on a CD gave enough tangibility to constitute a good, and the court was not prepared to separate the medium from the message. A 1996 case was cited in which another court had done just that.
Does either of those holdings surprise you: that a licence was not a sale of goods, or that software might be a ‘good’? Would Canadian law — common or civil — produce a different result? Would software cease being a good if it were transferred by electronic means, e.g. downloaded? Does that distinction make any sense?
I am aware of American attempts at law reform about technology licensing, notably the Uniform Computer Information Transactions Act (UCITA) in the 1990s. UCITA cannot be considered a complete success. I am also aware of some US cases that have applied sales legislation (based on Article 2 of the Uniform Commercial Code) to licences.
Are there problems resolving this sort of problem in Canada, or for that matter in the US or elsewhere? The result in the Southwark case seems right based on the facts described by the judge.
Note that the court in the Southwark case was the “High Court (Technology and Construction Court)”. Would it help if Canadian jurisdictions had such a specialty court? If so, does that combination (technology and construction) appeal to you?