Tag Archives: internet

PERHAPS IT’S TIME TO GET RID OF THAT BROWSEWRAP AGREEMENT

On August 18, 2014 the 9th Circuit Court of Appeals affirmed a district court’s holding that Kevin Khoa Nguyen could not be compelled into arbitration with Barnes & Nobel for a claim arising out of Mr. Nguyen’s online purchase of a HP Touchpad that Barnes & Nobel later cancelled.

Barnes & Nobel argued that by accessing their website, Mr. Nguyen consented to the site’s Terms of Use (“TOU”), which provided: “By visiting any area in the Barnes & Nobel.com Site, creating an account, [or] making a purchase via the Barnes & Nobel.com Site… a User is deemed to have accepted the Terms of Use.” The compulsory arbitration language was contained in the TOU as well.

While the 9th Circuit’s analysis focused on the applicability of the arbitration provision, their holding calls into question the validity of browsewrap agreements in general.

A website’s Terms of Use is a contract between the website owner and the website visitors. In order for any contract to be legally binding, it is required that the parties to the contract manifest their assent to be governed by the terms of the contract. See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir. 2004) (“While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally changed the principles of contract”). In keeping with the tradition that assent may be expressed in writing, orally, or by conduct, many website owners and online service providers use “clickwrap” or “browsewrap” agreements to bind their online consumers. Users consent to clickwrap agreements by some form of affirmative express consent, typically clicking on an “I Agree” box, before accessing the website or online service. On the other hand, a browsewrap agreement does not block a user from accessing the website or online service and the agreement is accessible to the user via a hyperlink, which is typically located on the bottom of the website. Since browsewrap agreements lack the user’s explicit assent (no “I Agree” box), the enforceability of the browsewrap agreement hinged on whether the user had actual or constructive knowledge of the website’s TOU. Until this opinion, constructive knowledge was generally inferred where notice of the TOU was conspicuously displayed and placed on the website.

In Nguyen v. Barnes & Nobel, the 9th Circuit found that Mr. Nguyen did not have actual or constructive knowledge of Barnes & Nobel’s browsewrap TOU. They held that since there was no evidence Mr. Nguyen read the TOU or that he even clicked on the TOU hyperlink, he did not assent to the TOU and therefore cannot be bound by the TOU’s terms. This is despite the fact Barnes & Nobel had placed hyperlinks to its TOU on every page of their website and in the online checkout process, and such links were underlined and off-set in green typeface. Without more, the court held that this did not surmount to constructive notice of the TOU.

What’s more? The court provided examples from caselaw where the courts found users had assented to browsewrap agreements:

  • com, Inc. v. Verio, Inc.: Defendant admitted that it was fully aware of the terms on which plaintiff offered access to its online service and defendant repeatedly accessed plaintiff’s service;
  • Airlines Co. v. Boardfirst, LLC: Defendant continued its breach after being notified of the terms in a cease and desist letter;
  • Ticketmaster Corp. v. Tickets.com, Inc.: Defendant continued to breach the TOU after receiving a letter from plaintiff quoting the browsewrap contract terms.
  • Zaltz v. JDATE : The court enforced the forum selection clause of the browsewrap agreement where prospective members had to check a box next to the statement “I confirm that I have read and agreed to the Terms and Conditions of Service.”
  • Fteja v Facebook, Inc.: The court enforced the forum selection clause in a browsewrap TOS where notice below the “Sign Up” button stated “By clicking Sign Up, you are indicating that you have read and agree to the Terms of Service” where “Terms of Service” was a hyperlink and there was evidence the plaintiff had clicked “Sign Up.”
  • Cairo, Inc. v. Crossmedia Servs, Inc, No. 04-04825, 2005 WL 756610 (N.D. Cal. Apr. 1, 2005): The court enforced the forum selection clause in website’s TOU where every page on the website had a textual notice that read: “By continuing past this page and/or using this site, you agree to abide by the TOU for this site, which prohibit commercial use of any information on this site”).
    • Compare the decision in Cairo with Pollstar v. Gigmania where the court refused to enforce a browsewrap agreement where textual notice appeared in a small gray print against a gray background.

Interestingly, the 9th Circuit affirmed the district court’s second holding that Mr. Nguyen was not prevented from denying the applicability of the arbitration clause even though he took advantage of the TOU’s choice of law provision when bringing this lawsuit. The court distinguished this case from previous cases which applied the doctrine of direct benefit estoppel because Mr. Nguyen was not a third party beneficiary to the TOU, but a primary party to the TOU; and the choice of law provision was not a benefit intended to benefit Mr. Nguyen specifically.

Although browsewrap agreements were not technically invalided per se by the court, this opinion and the court’s recommendations on the extra steps make browsewrap agreements the much less attractive option.

Network Solutions sued for Poaching Domains

According to the suit and Network Solutions internal policies, after a customer searches for a .com domain on Network Solutions’ web site, the domain would be "purchased" by Network Solutions. The Internet Corporation for Assigned Names and Numbers (ICANN) established a grace period, whereby consumers could purchase a top level domain name (TLD), and return the domain within five days fo purchase, establishing a domain name purchase grace period.

This grace period has been exploited by registrars, who purchase TLDs to measure their profitablity, only to return the ones that are less profitable.

Network Solution calls its policy a “consumer protection measure,” and claims it is necessary to prevent customers from losing prospective domains to “front-runners,” who monitor domain search logs and quickly buy up searched domain names for themselves, hoping to sell them back to their original searchers.

Once purchased by Network Solutions, the domains can then cost as much as $34.99, or any price Network Solutions deems appropriate. The temporary purchasing of the domain forces users, for a period of four days, to purchase their domain through Network Solutions and at the inflated price..

Microsoft Bids for Yahoo

After an unsolicited $44.6 billion bid by Microsoft to purchase outstanding Yahoo shares on February 1th, Chairman of the House Energy and Commerce Subcommittee on Commerce, Trade, and Consumer Protection House, Rep. Bobby L. Rush (D-IL) has stated that a confidential briefing will be held with his panel in the coming weeks.

Additionally House Judiciary Committee Chairman John Conyers (D-Mich.) and chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Sen. Herb Kohl (D-Wis.) are holding a February 8th hearing on internet competition.

Microsoft and Yahoo both operate in essentially the same arena: Google’s shadow. A merger between the two companies could bring Google its first real competition in the internet advertising market.

Yahoo is said to still be undecided as to how to proceed forward, CEO Jerry Yang sent a letter to his 14,300 employees stating that "There's obviously been a lot of talk about Yahoo in recent days, and we won't let it distract us from pursuing our transformation strategy" and assuring them that the board is working in "a complex and evolving landscape", with the help of outside advisors. The letter goes on to mention “strategic alternatives”, leading some to believe Yang’s Yahoo is not for sale – voluntarily, anyway.

First Web Dating Site Law…in NJ?

The new law requires online dating services to disclose prominently on their sign-up pages whether they conduct criminal history background screenings on their members.

The disclosure can be made either through email, via a "click-through" agreement, or something similar requiring New Jersey residents to acknowledge receipt of notification, on the user profile, on the Internet dating service home page, or on the web page a New Jersey resident would use to register.

Microsoft Removes Licensing Restrictions From Windows Server 2008

Microsoft will allow users to run any type of database, and no longer require a CAL or limit the amount of users allowed to access the server provided it is an Internet Facing Front-End server.  The intent is to compete with open source alternatives such as the LAMP stack.  Read the full story here.

Verizon enters the Search Market!

If you type in an inadvertent or invalild website name, you will no longer be directed to your default search engine, or receive a "Host Not Found" message. Instead, you will be directed to a Verizon search page (if you are a Verizon subscriber for internet.)

Just wait for the lawsuits to happen. Google, Yahoo, AOL are going to file against Verizon for unfair competition and potentially monopolization antics.

How does this work?

Well, by changing the way their DNS servers work in trying to find a new site, they used to redirect to the preferences of the web browser's default search engine. If we all remember, Microsoft, after intense litigation opened their Browser (Internet Explorer) to other default search engines.

Verizon is now being preemptory, by pushing a new search page, with Verizon branding. A lot of people are arguing that this is a breach of net neutrality, the principle that all content on the Internet should be accessesd freely and equally. Supporters of net neutrality believe that Internet providers may redirect users from their preferred Web pages or content to content the provider favors–such as redirecting a user from Google's search page to Verizon's.

What to do if I don't want Verizon Searches?

If you don't want to have your search results interfered with, Verizon has set up an "opt out" procedure to reset your DNS settings.

Copyright: What is it?

Copyright applies to almost any and every area of work, but can not be used to replace patent or trademark. In otherwords, copyright just protects a final product, as in a painting, or a poem, but will not protect a technique or method, such as how the painting was created, a business methodology, or a working piece of machinery. These will often fall under patent law.

A few points to remember about copyright and the legal system in the United States is that it is generally speaking the first to create and not the first to file. What that means is if you create the work first, but someone else registers the "copyright" with the United States before you, that someone else's rights are not above yours. You as the creator, as long as you can demonstrate that you created your work before the other artist will be recognized as the copyright holder.

Another point is that the amount of protection given can sometimes be tied to the amount of commercial value a product has. So, although technically speaking an email someone writes would and could be copyrighted, because it has little if any commercial value, the protection given by the courts and the law would be minimal. Similarly, a poem or book written but never published, although it hasn't been published yet, it would definetly be viewed as a potential valuable work, and could be protected vigorously.

Lastly, copyright must be boiled down to an actual piece of work or creation. You cannot copyright an idea in your head of how something will look or what the poem will be, write it down, draw it, create it. Do whatever you have to do to get it out of your head and on to a tangible medium.

 

Ticketmaster v RMG – Preliminary Injunction Granted.

On October 16, 2007, the Honorable Audrey B. Collins granted Ticketmaster a preliminary injunction forbidding RMG Technologies form using automated programs or "bots" to navigate Ticketmaster's website and purchase tickets.

RMG's technology allowed its customers to circumvent Ticketmaster's identification and security precautions, thereby allowing RMG's clientèle to purchase tickets faster than Ticketmaster's human clients, allowing for the mass purchase of tickets for resale value at much higher prices.

Interesting in this case, is that the Judge found that the harm done to Ticketmaster was not loss of sales (as RMG clients were purchasing all the tickets from Ticketmaster at full market value), bu the harm to goodwill and reputation, citing customer complaints about the unavailability of tickets.

Furthermore, the court also found grounds in the claim of Computer Fraud and Abuse Act(CFAA), citing that RMG "intentionally accesse[d] a computer without authorization or exceed[ed] authorized access, and thereby obtain[ed] information from any protected computer," 18 U.S.C. section 1030(a)(2)(c), or that RMG "knowingly cause[d] the transmission of a program… and … cause[d] damage without authorization to a protected computer." This portion falls into previous rulings that use of a computer to the extent that it may cause harm or slow down a computer has been deemed a violation of the CFAA. However, because Ticketmaster failed to demonstrate a minimum of $5,000 in damages (which should have been a fairly easy step.) the court avoided ruling on the CFAAA claim as to the preliminary injunction, citing that RMG was sufficiently in breach of other claims that it was not necessary.

Lastly, we see again that a company which advertises that software or an application is able to circumvent any other companies protection measures, is going to get you into trouble. We first saw this type of ruling from the courts in Metro-Goldwyin-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) where the courts ruled that because Grokster advertised that its application and file sharing techniques allowed second party individuals to violate copyright laws, Grokster was liable for "intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting form direct infringement while declining to exercise a right to stop or limit it." Although this is not file sharing of media files as is the more common modern version of copyright infringement, a website is considered copyrighted material, and therefore circumventing protective measures to gain access to a copyrighted website will get you into trouble both with the DMCA and Copyright Law.

In the end, do not advertise that your application, software, or techniques circumvent protective measures, or allow for the violation of any law or right, including copyright.