Tag Archives: website

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.

Illegal Content still viewable? Wikileaks persists!

It’s been a week since District Judge Jeffrey White ordered the shutting down of Wikileaks, a whistle-blower wiki dedicated to releasing confidential information that exposes unethical behavior. The website is, admittedly, domainless (Wikileaks.org has been wiped from the DNS) but quite viewable – if difficult to find in its current incarnation (http://88.80.13.160).

Wikileaks domain, wikileaks.org, was hosted by a California based company (Dynadot, Inc.) and was removed quite quickly. It is quite unlikely Wikileaks will disappear anytime soon however, as it is hosted by prq Inet, a Swedish-based company dedicated to hosting the unhostable (read: illegal) and whose client-list boasts the likes of Piratebay and Seedler, torrent websites consistently used for the pirating of copy written material.

Judge Jeffrey White discovered first hand the effects of what has become known as the “Streisand effect”, that is, attempting to silence a source and succeeding only in drawing more attention and publicity to it.

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.

Safe Harbor for Websites

The DMCA provides in section 17 U.S.C. section 512(c) several “safe harbor” provisions for service provider's connection to infringing online materials. These safe harbor provisions are usually applicable when a service provider is either unaware, unable to be aware, or unable to regulate the content that is being transmitted or shared. However, the DMCA safe harbor provisions were initially intended to protect for Web Hosts and service providers, and not necessarily the web sites themselves, but that was before the introduction of user content based websites such as YouTube, Myspace, Craigslist, and many others.

However, the DMCA does require that service providers adopts and utilizes policies to both terminate repeat infringers and apply standardized acceptable procedures in the prevention of copyright infringement.

If you are planning on developing, operating, or maintaining a website which authorizes, encourages, our utilizes user generated content, there several things which one should take into account in regards to protecting yourself from law suit.

1. Ensure that your website and its use falls under the specifications of the DMCA “safe harbor” provisions, whether that be section 512(c) or any other provision.

2. Develop a policy and procedure in which the website is able to remove content which has been flagged as infringing material and notification of both the content provider and the user who submitted the infringing material.

3. Let your site take its natural course. In other words, it would behoove the website owner to minimize the control of material submitted by users on the website. The more control the Owner and maintainers of a website exert, the more the owner/maintainer will be responsible for the content which users upload.

4. Do not target any revenue generating plans at infringing or potentially infringing content. One of the major downfalls of Grokster were the advertisements which encouraged users to infringe on copyrighted materials.

5. Do not directly infringe either by content posted by the owner or maintainer of the website, or encouraged. If you encourage infringement or post the content yourself, it is more likely that a court will deny any “safe harbor” provision protections.

6. Attempt to the largest degree possible the licensing of content from providers. The more licensing agreements a website is able to sign, the less likely someone will bring suit.

Please consult an attorney for any specific advice in regards to the DMCA, or Website Compliance.

 

*This article was written by Jeffrey C. Neu, Esq. an Internet and Technology Lawyer in New Jersey.