Overstock Told That 'Browserwrap' Agreement Is Unenforceable

from the or-is-it? dept

It's still not entirely clear what online agreements are actually enforceable and which aren't. We've seen cases go both ways, with a recent ruling even noting that terms that are a hyperlink away, rather than on the agreement page itself, may be enforceable. But the latest case, involving online retailer Overstock went in the other direction. A court found that Overstock's arbitration requirement was unenforceable, because, as "browserwrap," the user was not adequately notified. Eventually, it seems that someone's going to have to make it clear what sorts of online terms are actually enforceable (if any). Until then, we're going to see a lot more lawsuits like this one.

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Forget Clickthrough EULAs; Are There Really Walkby EULAs For NYC Parks?

from the please,-tell-me-this-is-a-joke dept

Boing Boing points us to something that I'm seriously hoping is a joke (please, please, please, someone tell me this is a joke/parody/Photoshop/etc.) -- involving Madison Square Park in NYC, which is supposedly now being managed by HSBC -- and thus (again, I'm hoping this is a joke) the lawyers have decided to put up giant end user license agreements (EULAs) that you supposedly agree to by entering the park:

[Photo: Rod Townsend] Assuming this does turn out to be fake (please!), what's scary is how unsurprising it would be -- and how many people seem to immediately assume that it is, in fact, true. We're so used to such EULAs in every day life, that seeing something like this just wouldn't strike all that many people as being obviously fake.

Now, if this is actually real, then, things are even worse. It's difficult to believe (by any stretch of the imagination) that such a thing is even remotely legally enforceable. Already there are questions about the legality of "clickthrough" EULAs, and one would have to imagine that the enforceability of a "walkby" EULA is even more in doubt. So, whether or not this is true, fake or a joke... it's a rather depressing sign (literally) of the times.

Update: In the comments, Shawn points out that this is likely associated with HSBC's "Soapbox" ad campaign, which only makes it marginally less ridiculous (but no more enforceable).

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xkcd Uses Clickthrough EULAs To Eternal Advantage

from the well,-there-we-go dept

And here's a little Friday afternoon fun for you. The latest xkcd comic takes on the issue of automatic end user license agreements that seem so common these days:

If they're going to be allowed, you might as well use them to your advantage.

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Will Psystar Represent A Key Case Concerning Enforceability Of EULAs?

from the let-the-lawsuits-begin! dept

A few weeks back, a company named Psystar made some news by offering to sell PCs with Mac OS X installed. This raised questions about how legit this offer was. After all, when Steve Jobs returned to Apple years back, he killed off all licensing deals that allowed any kind of Mac clones. However, the company has been showing off the clones it's created. Now, the questions are all about whether or not Psystar's actions are legal. The company (of course) says it is legal, and that it's buying a legal copy of the operating system and installing it on PC hardware. However, the end user license agreement (EULA) includes the following:

"This License allows you to install, use and run one (1) copy of the Apple Software on a single Apple-labeled computer at a time. You agree not to install, use or run the Apple Software on any non-Apple-labeled computer, or to enable others to do so."

That would seem to preclude what Psystar is doing. The News.com article above does an excellent job laying out the legal issues here. While the courts have found various clickthrough EULAs enforceable (even though no one -- including the companies themselves seem to read through them), it's possible that Psystar could attack the EULA from other directions. As the article notes, it could try to use the first sale doctrine (which allows you to resell copyrighted products you've bought) but that likely won't fly. What may be most effective (even if it's still a long shot under the law) is to claim that the EULA illegally "ties" the software to Apple's own hardware. However, making a claim about tying is quite complicated, and it seems unlikely that Psystar would prevail. This seems unfortunate for the market -- as getting some additional competition into the market would only help drive innovation. But, under the current law, it's difficult to see how Psystar can win.

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AP Examines Just How Ridiculous ISP Contracts Are

from the just-so-you-know dept

We recently learned that customers of Verizon's FiOS service don't get to see the full terms of service they're agreeing to until after it's been installed. But, of course, no one actually reads those kinds of things, because if you did, you'd probably never agree to it. To help you out, the Associated Press took some time to read through various ISP end user license agreements (EULAs) and discovered that ISPs put a ton of ridiculous stuff in the fine print, which is basically to give them many different options to kick you off if they suddenly decide you've become a problem. Or, in some cases, it's because lawyers want to protect the ISPs from ridiculous lawsuits, which leads them to put in clauses warning customers that the ISP (in this case, Verizon) doesn't own the internet, so that people know they can't sue Verizon for something that happens online. Verizon recently removed that clause, apparently realizing that it was a bit extraneous.

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Companies Don't Even Read Their Own EULAs Carefully

from the so-why-should-we? dept

A couple of funny stories that came out this week illustrate the extent of the problem with the End-User Licensing Agreements that we're constantly being asked to "agree" to every time we use a new piece of software. First, an Italian site noticed that the EULA for Apple's newly-released version of Safari for Windows requires that "The software allows you to install and use one copy of the Apple Software on a single Apple-labeled computer at a time." Obviously, most Windows users do not have an "Apple-labeled computer," which would suggest that they'd be violating Apple's license (and therefore infringing copyright) if they installed Safari at all. That would be ridiculous, and sure enough, a quick call to Apple confirmed that this was an oversight on Apple's part, and that you can, in fact, install Safari on a non-Apple Windows machine. The same day the Apple story was making the rounds, Chris Soghoian noticed that if read literally, Google's terms of service would prohibit anyone under 18 from using any of Google's websites. It reads "You may not use the Services... if you are not of legal age to form a binding contract with Google." As Chris points out, in most states you have to be 18 to form a binding contract, suggesting that those under 18 are prohibited from using the service. He notes that a lot of other companies, including Facebook, MySpace, and Microsoft, have friendlier terms, either limiting the services to those 13 and over or saying nothing about age at all.

This is another good reason that we should be skeptical about the idea that these kinds of perfunctory EULAs and TOSs should be treated exactly the same way as ordinary contracts signed by two human beings. When it's in their interests, companies try to argue that these kinds of contracts should be strictly enforced, for example claiming that it trumps the first sale doctrine. Yet it's been clear for a long time that users almost never read these agreements. Now it seems that even the lawyers nominally in charge of writing them don't review them very carefully. If neither party to these "contracts" takes them seriously, might that suggest that the courts should be skeptical of considering them to be contracts at all?

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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If You Don't See The Terms Of Service Until After You Buy, Are They Valid?

from the seems-a-bit-unfair dept

There have been lawsuits over software packages that only allow you to see the end user license agreement (EULA) after you've already paid for the software, but does that apply in other situations as well? Broadband Reports points us to the news that for people who sign up for Verizon's FiOS fiber optic broadband, you don't get to see the full terms of service until after it's installed. Verizon claims it's just easier this way -- and that all the important points are explained ahead of time. It also says that users can cancel within 30 days with no penalty if they're uncomfortable with the terms. However, that leaves out the fact that a lot of time and effort went into installing the actual FiOS system, which could also disrupt other systems (in fact, in a few cases -- though certainly not all -- a FiOS installation cuts the old copper line). So, in that case, it would be difficult to just go back to what you had before.

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National Consumer Council Notices That EULAs Are Unfair

from the you-just-noticed? dept

This seems rather obvious at this point, but the National Consumer Council in the UK has released a report pointing out that software end-user license agreements (EULAs) are unfair. The problems with EULAs have been widely discussed before. They're generally dense and full of legal language, so that users have no idea what they're agreeing to. They're non-negotiable, so it's not like a standard contract either. Often people need to agree to them before they can even read all the terms ("by opening his package, you have agreed to..."). The end result, of course, is that no one reads them. If you did, you would probably never agree to what they said anyway. So, while this is nothing new, it's nice to see consumer protection groups shining a light on how EULAs are very often unfair.

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Supreme Court Allows EULAs On Seeds

from the don't-drop-those-appleseeds,-johnny dept

Richard Ahlquist writes: "A farmer has now felt the wrath of the SEULA or the Seed End User License Agreement! It turns out one farmer who goes by the name Homan McFarling decided after his crops came in to hold some of the seed generated from his produce and use it to replant the next year. Evidently the seed police at Monsanto found out about this (perhaps he didn't buy any new seed the next year) and sued McFarling. That was in 1999. Fast forward to today and you will find that the Supreme Court has decided that he did indeed violate the license agreement by planting his own seeds and he is being fined $375,000.

The story presents an interesting thought. These genetically engineered strains are built to thrive better than our existing crops. Once the seed manufacturers have managed either through attrition or engineering to destroy our natural plants, they will control the agriculture world wide because in order to grow anything you need seeds. If it's illegal to hold seeds from the crop you grew to replant because of the license agreement it would effectively mean an end to many smaller farms as they become unable to compete with the superior seed and the prices charged for it. Now where is that trademark application so I can trademark SEULA....."

We wrote about this case initially a few years ago, when it was going to the appeals court, where we hoped there would be a little common sense applied, recognizing how silly it is to tell someone they cannot replant seeds from the very plants that they, themselves, grew. It's rather unfortunate that the Supreme Court disagreed. The real problem here is yet another artifact of bizarre intellectual property laws. Tangible goods and digital goods are very different. Intellectual property laws try to make digital goods more like tangible goods, but due to the nature of those goods, it actually provides even more control -- such as when it comes to limiting what a buyer can do after they've bought the product. It's quite depressing that, rather than helping people realize how these laws are problematic, they've just made producers of tangible goods start to drool about the possibility of putting similar rights on tangible goods.

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