The EULA: A Poisonous Tree

HI!My Name is

Peter “Deuce” Bradshaw

I’m writing a paper

about EULAs

I want to share

my work and

research.

Continue the

Conversation with me

Via Twitter:

@BradshawLaw

What is a

EULA?

End

User

License

Agreement

Contract between

licensor and purchaser,

establishing purchaser’s

right to use the software.

Usually unseen until After

purchase and Assented

to by clicking

“I Accept”

Objective Theory of

Contracts

existence

of a contractis determined by the legal significance

of the external acts of a party,

rather than by the actual intent.

In other words

clicking

“I Accept”

Contracts of

Adhesion

Standard forms, included in the packaging or installation

materials for software or licenses for information

terms are defined by the drafting party

other party has no real bargaining power

The non drafting party often would not understand the

language even if the contract was read

Reflects interests of the party with superior bargaining

power, likely to be the drafting party

Presented on a "take-it or leave-it" basis with no

negotiation

BLanket Assent

Theory

to any NON-unreasonable terms

that do not alter these

reasonable expectations as to

the terms of the transaction.

to any specific terms.

to the transaction

No

ass

ent

bRoa

d ass

ent

Prominent

EulaCases

Congressional amendment to First Sale Doctrine

ProCD v. Zeidenberg

Hotmail Corp. v. Van$ Money Pie Inc.

Groff v. Am. Online, Inc

Comb v. PayPal, Inc.,

Step-Save Data Systems, Inc. v. Wyse Technology

Bowers v. Baystate Techs., Inc,.

1990

1991

1996

1998

2002

2003

1991

Step-Save Data Systems, Inc.

UCC 2-207 Approach should COntrol:

Parties only Intended

to Incorp. Terms

which both Parties agreed

Unfair to bind buyer because seller

sent last form

V. Wyse Technology

1991

ProCD v. Zeidenberg

“Agreement” specifically limited the use

of the application program and listings

Zeidenberg argued that this was a

“non-Agreement”

License appeared in 3 forms:

Packaging; Text in the manuaL; Text

displayed each time software loaded

1991

ProCD v. Zeidenberg (Continued)

UCC 2-204 controls:

“Any manner sufficient to Show

Agreement.”

Accepted terms by not returning disks

“Shrinkwrap licenses enforceable

unless terms are objectionable on

grounds of general contract law

1991

ProCD v. Zeidenberg (Continued)

Case NOT decided on clickwrap grounds,

but rather on Shrinkwrap

UCC 2-204 invocation set groundwork

for clickwrap

1998

Hotmail v van$ money pie

Pornography and Spam messaging

against user agreement

Grant of Injunction without discussion

of assent or enforceability

Passively acknowledging the

legitimacy of clickwrap

1998

Groff v America online inc.

Forum selection clause

Grant of aol motion to dismiss for

improper venue

acknowledging the legitimacy of

Accept or Decline

User had ability to decline the terms

2002

Comb v. paypal inc.

Procedural unconscionability

Even where Acceptace

is procedurally lacking,

still enforceable if the

substantive terms are Reasonable

2003

Bowers v. bayside techs inc.

Copyright & Agreement

contract claims are preempted if the

work is within the subject matter of

copyright

courts typically find that

contractural rights are

not equivalent to copyrights

Collision Of

CopyRightEULA

Cases

1984

2009

2005

2008

2004

2003

Sony Corp v. Universal City Studios, Inc.

Chamberlain v Skylink Technologies

LexMark Cases

Blizzard I

Blizzard II

RealNetworks, Inc. v. DVD

Copy Control Ass’N Inc.

1984

Sony Corp v. Universal City Studios, Inc.

EStablished fair use doctrine as

a check to the

"monopoly privileges"

provided by Congress

BetaMax Case.

Created Market for Retail

Movie Releases

2003

Chamberlain v. Skylink Technologies

Garage Door Openers

Warranty and Website Did Not

Explicitly Bar the Plaintiff’s Use

Sellers Can dictate terms for

consumer use

2004

Lexmark Cases

Printer Cartridges

lexmark cartridges encrypt

authentication secquence

Prophecized: Manufacturers Would lock

down devices through a combination of

copyright and contract

2005

Blizzard I

Alternate servers for playing Warcraft

Defendant contractually

yielded right to reverse engineer

Holding based on bowers

2008

Blizzard II

World of Warcraft “bot”

Analysis Similar to blizzard I in

analysis and holding

2009

Realnetworks, Inc.

DVD Copying Software

High threshold requirement for

creators of software

v. Dvd copy control assn. Inc

Held that Realnetworks could not prove

that its product would not be used for

illegitimate purposes

Eulas includerestrictive terms

on purchasers that were

not assented to

by that purchaser

Allowing content creators and

manufacturers to

step into the role of legislators

These Contracts of Adhesion

should be treated as

poisonous Trees

For the Protection of Consumers

EULA Terms should be Held

inherently unconscionable until the drafting party

demonstrates their

Reasonableness

PHOT

O CR

EDIT Title Slide

Neil Kandalgaonkarhttp://www.flickr.com/photos/brevity/2485616531