A shrink wrap license
comes with
physically packaged software (e.g. shrink wrapped CD), where there is
notice on
the shrink wrap, or visible through the shrink wrap, that opening the
shrink
wrap constitutes assent to the license agreement found inside. A browsewrap license is on a web page, and concerns the content of a
next page
accessed by clicking a hyperlink. A
click wrap license is a browsewrap
license that requires a user to affirmatively
accept the terms of the agreement before proceeding.
Both browse
wrap and click wrap licenses are related to shrink wrap licensing. A browsewrap
or click wrap license, like a shrink wrap license, is on the “package”
(e.g. on the web page that contains the hyperlink which redirects to
the desired
content) and once the “package” is opened the license becomes in
effect. The analogy with shrink
wrap is not completely accurate, however.
Browsewrap is distinguishable
because,
although a shrink wrap notice is visible to the user before opening the
shrink
wrap, a browsewrap notice or license may
not be
readily visible to a user before clicking a hyperlink.
Click wrap is distinguishable
because, although
the person unwrapping the shrink wrap packaging may not be aware of the
notice but
is still allowed to open the package, a person cannot proceed with
opening the click
wrap licensed “package” unless they not only see the license
agreement but also accept it.
Shrink
wrap, browse wrap and click wrap licenses all are considered by courts
following the tenets of contract law.
Therefore, the UCC applies if applicable within the jurisdiction.
ASSIGNMENT
I included a lot of
cases in the
reading assignment, but assigned only parts of many of the cases so the
reading
shouldn’t be overwhelming.
Feel free to read the complete cases if you wish, but the
portions not
assigned will not be on the discussion agenda.
The
National Conference of Commissioners on Uniform State Laws (NCCUSL)
drafted a
Uniform Computer Information Transactions Act (UCITA) to deal with
topics such
as click wrap licensing. UCITA has
been nearly uniformly rejected because it is considered to be very
pro-business. Only Virginia and
Maryland have adopted UCITA. Other
states have expressly rejected UCITA, and the attorneys general of 33
states
have denounced it. Some UCITA
sections were included in the assigned readings to continue with a
theme of the
semester regarding how institutions are attempting to deal with the
issues
surrounding the internet. It is
important to note that courts do sometimes rely on UCITA whether or not
it is
enacted in that state.
See the
UCC/UCITA
sections excerpted in the accompanying document for provisions
applicable to today’s discussion.
Primarily, these sections are intended to highlight where UCITA
and the
UCC parallel each other and where UCITA “goes the extra mile.”
SHRINK/BROWSE/CLICK
– VALID OFFER AND ACCEPTANCE ON THE INTERNET
The key
case on shrink wrap is ProCD, Inc. v. Zeidenberg,
86 F.3d 1447 (7th Cir. 1996).
Please read all of this case, because it
is a good introduction for the discussion following.
Next,
consider a key case on browse wrap.
In Specht v. Netscape, 306 F.3d 17
(2d
Cir. 2002), read
the facts section of the Background (pp. 21-24) and
section III of the Discussion (pp. 28-35).
Follow Specht with the
click wrap case Feldman
v. Google, Inc., 513 F.
Supp. 2d 229 (E.D. PA 2007),
distinguishing Specht.
Read
sections II.B (pp. 232-233) and IV.B.1.a (pp.
236-238).
Now, read
Davidson
& Associates, Inc.
v. Internet Gateway, 334 F. Supp. 2d 1164 (E.D. MO 2004), sections III.A-D (pp. 1168-1173) and IV.C (pp. 1176-1178).
Note that, although copyright and DMCA issues in this case are
interesting, they are outside the scope of this discussion.
CONTRACTS
OF ADHESION
At this
point, you will have a relatively good understanding of what is and is
not
valid internet offer and acceptance.
As with any contract, though, the content must also be valid. Validity is considered carefully in the
context of unilateral form contracts and standardized contracts. As my 8th edition Black’s
Law Dictionary tells me, a unilateral standardized contract is also a
contract
of adhesion if it is “prepared by one party, to be signed by the party
in
a weaker position, usually a consumer, who adheres to the contract with
little
choice about the terms.” Remember
Carnival Cruise Lines (not assigned here) from the first year contracts
course, in which the contract was
received along with the purchased cruise ticket. In
Carnival,
the forum selection clause of the adhesion contract was upheld as not
being a
shock to the conscience. In a click
wrap license, which is a form of standardized contract and often
referred to by
the courts as an adhesion contract, almost any terms are acceptable if
they are
not unconscionable.
For the
most part, the litigation concerning unconscionable clauses in click
wrap
licensing centers around venue and forum selection.
The following cases explore the topic of
arbitration as representative.
First
read Comb
v. Paypal,
Inc., 218 F. Supp. 2d 1165 (N.D. CA 2002). Next, read Hauenstein v. Softwrap
Ltd., 2007 WL 2404624 (W.D. WA 2007),
Discussion section
II (pp. 3-5). Finally, read Bragg
v. Linden Research, Inc.,
487 F. Supp. 2d 593 (E.D. PA 2007), the
discussion of the Motion to Compel Arbitration in section
III (pp. 603-612). The underlying Bragg case is fascinating, and will probably be discussed
by Denis
in the next hour.
SUMMARY
As a
final summary, and in the interest of full disclosure, read “What
Did You Just Agree To When
You Clicked" and read this.