e-Commerce Docket Sheet

The district court has issued a written ruling supporting its December 2004 ruling from the bench in a dispute over the sale of trademark terms as keyword search terms. Government Employees Insurance Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2005). The court reiterated its ruling that the sale of trademark terms by a search engine to generate “sponsored links” in search results does not, by itself, violate the Lanham Act. The court found that there was insufficient evidence that the “mere use” of trademarks as search terms causes confusion where the sponsored advertisements did not themselves contain the trademark term. The court also ruled that where the advertisements did include the trademark term, the plaintiff's evidence, unrebutted by the defendant search engine, established an actionable likelihood of confusion.

An arbitration provision included in the terms and conditions of sale that were accessible via a hyperlink during an online transaction is binding and enforceable. Hubbert v. Dell Corp., 2005 Ill. App. LEXIS 808 (Ill. App. Ct. 5th Dist. Aug. 12, 2005). The court concluded that the purchasers had sufficient notice that the terms and conditions would be binding on them, because the hyperlink to the terms and conditions appeared on several screens during the online purchasing process, and three of the screens contained the explicit statement that the transaction was subject to the terms and conditions of sale. The court commented that the successive screens presented during the purchase “should be treated the same as a multipage written paper contract.” Noting that the transaction involved the purchase of a computer, the court also commented that “[c]ommon sense dictates that because the plaintiffs were purchasing computers online, they were not novices when using computers. A person using a computer quickly learns that more information is available by clicking on a blue hyperlink.” The court also concluded that the arbitration clause was neither procedurally nor substantively unconscionable.

A printer-cartridge manufacturer's post-sale restrictions on consumer reuse of empty printer cartridges do not violate California's deceptive and unfair business-practices law. Arizona Cartridge Remanufacturers Association, Inc. v. Lexmark International, 2005 U.S. App. LEXIS 18753 (9th Cir. Aug. 30, 2005). The appeals court rejected claims by a wholesalers' association that sells remanufactured cartridges that the manufacturer's post-sale restrictions falsely represented to consumers that the post-sale restrictions were enforceable. The court ruled that the language on the outside of the cartridge packages containing the post-sale restrictions gave rise to an enforceable contract with end-users because the end-users were given notice of the restrictions, they were given a chance to reject the transaction, and they received consideration for the restriction in the form of a reduced price for the restricted cartridges. The court also ruled that the post-sale restrictions on the patented cartridges were within the scope of the manufacturer's patent grant and therefore were not unenforceable under patent law.

A mandatory arbitration provision contained in terms and conditions that were available on a cellular phone provider's Web site and that were referenced in the monthly invoice sent to all subscribers is enforceable in a tort action brought by a subscriber. Briceno v. Sprint Spectrum, 2005 Fla. App. LEXIS 13740 (Fla. Ct. App. 3d Dist. August 31, 2005). The subscriber brought the tort action against the provider, alleging that its employees obtained password information from her when she brought in her camera-telephone for repair and then used the password to obtain and disseminate personal photographs of her body to third persons via the Internet. The court found that the terms and conditions of the subscriber contract were not unconscionable and arbitration required, because the notice on the invoice gave the subscriber “fair and clear” warning of the terms and conditions, and also permitted the subscriber to reject the terms and terminate the contract if she did not agree with the changes.

A forum-selection clause contained in a consulting agreement, but not in a related software licensing and support agreement executed later, applied to all claims arising under both agreements because the two agreements constituted a “single business transaction.” Dexter Axle Co., v. International Association of Machinists, No. 833 N.E.2d 43; 2005 Ind. App. LEXIS 1510(Ct. App. Indiana, 3d Dist. Aug. 22, 2005). The court noted evidence in the record of conversations that preceded the execution of both agreements, in which the purchaser indicated its desire to obtain software licenses and support, as well as consulting services, from the vendor. The court also ruled that the forum selection clause applied not only to breach-of-contract claims, but also to fraud and negligence claims arising from the same transaction.

The president of an online book-listing service that acted as an e-mail provider for book-dealer customers violated federal wiretap laws when he ordered employees to systematically divert and read copies of subscriber e-mails for commercial purposes. United States v. Councilman, No. 418 F.3d 67 (1st Cir. en banc Aug. 11, 2005). The appeals court, sitting en banc, ruled that the interception of e-mail messages in temporary, transient electronic storage violates the federal Wiretap Act, as amended by the Electronic Communications Privacy Act (ECPA). The court reasoned that in enacting and amending the provisions of the wiretap laws that cover electronic communications, Congress intended to prohibit interception of e-mail communications whether they are in transit or in storage at the time of the interception.

A trial court did not abuse its discretion in permanently enjoining a software licensee from the use of licensed code for breaching the non-disclosure provisions of the license agreement. DaimlerChrysler Services North America, LLC v. Summit National, Inc., 2005 U.S. App. LEXIS 18063 (6th Cir. Aug. 18, 2005) (unpublished). The appeals court ruled that the evidence before the trial court on the licensor's motion for summary judgment didn't dispute that the licensee allowed outside companies to have access to the software-program source code. The appeals court also ruled that the licensee was not foreclosed from showing during the damages phase of the trial-court proceedings that the software program in use at the time the dispute arose had been modified pursuant to the license agreement to such an extent that it no longer contained any of the code subject to the 1983 license agreement.

Written Ruling Issued In GEICO v. Google Trademark Dispute

The district court has issued a written ruling supporting its December 2004 ruling from the bench in a dispute over the sale of trademark terms as keyword search terms. Government Employees Insurance Co. v. Google, Inc. , 330 F. Supp. 2d 700 (E.D. Va. 2005). The court reiterated its ruling that the sale of trademark terms by a search engine to generate “sponsored links” in search results does not, by itself, violate the Lanham Act. The court found that there was insufficient evidence that the “mere use” of trademarks as search terms causes confusion where the sponsored advertisements did not themselves contain the trademark term. The court also ruled that where the advertisements did include the trademark term, the plaintiff's evidence, unrebutted by the defendant search engine, established an actionable likelihood of confusion.

An arbitration provision included in the terms and conditions of sale that were accessible via a hyperlink during an online transaction is binding and enforceable. Hubbert v. Dell Corp., 2005 Ill. App. LEXIS 808 (Ill. App. Ct. 5th Dist. Aug. 12, 2005). The court concluded that the purchasers had sufficient notice that the terms and conditions would be binding on them, because the hyperlink to the terms and conditions appeared on several screens during the online purchasing process, and three of the screens contained the explicit statement that the transaction was subject to the terms and conditions of sale. The court commented that the successive screens presented during the purchase “should be treated the same as a multipage written paper contract.” Noting that the transaction involved the purchase of a computer, the court also commented that “[c]ommon sense dictates that because the plaintiffs were purchasing computers online, they were not novices when using computers. A person using a computer quickly learns that more information is available by clicking on a blue hyperlink.” The court also concluded that the arbitration clause was neither procedurally nor substantively unconscionable.

A printer-cartridge manufacturer's post-sale restrictions on consumer reuse of empty printer cartridges do not violate California's deceptive and unfair business-practices law. Arizona Cartridge Remanufacturers Association, Inc. v. Lexmark International, 2005 U.S. App. LEXIS 18753 (9th Cir. Aug. 30, 2005). The appeals court rejected claims by a wholesalers' association that sells remanufactured cartridges that the manufacturer's post-sale restrictions falsely represented to consumers that the post-sale restrictions were enforceable. The court ruled that the language on the outside of the cartridge packages containing the post-sale restrictions gave rise to an enforceable contract with end-users because the end-users were given notice of the restrictions, they were given a chance to reject the transaction, and they received consideration for the restriction in the form of a reduced price for the restricted cartridges. The court also ruled that the post-sale restrictions on the patented cartridges were within the scope of the manufacturer's patent grant and therefore were not unenforceable under patent law.

A mandatory arbitration provision contained in terms and conditions that were available on a cellular phone provider's Web site and that were referenced in the monthly invoice sent to all subscribers is enforceable in a tort action brought by a subscriber. Briceno v. Sprint Spectrum, 2005 Fla. App. LEXIS 13740 (Fla. Ct. App. 3d Dist. August 31, 2005). The subscriber brought the tort action against the provider, alleging that its employees obtained password information from her when she brought in her camera-telephone for repair and then used the password to obtain and disseminate personal photographs of her body to third persons via the Internet. The court found that the terms and conditions of the subscriber contract were not unconscionable and arbitration required, because the notice on the invoice gave the subscriber “fair and clear” warning of the terms and conditions, and also permitted the subscriber to reject the terms and terminate the contract if she did not agree with the changes.

A forum-selection clause contained in a consulting agreement, but not in a related software licensing and support agreement executed later, applied to all claims arising under both agreements because the two agreements constituted a “single business transaction.” Dexter Axle Co., v. International Association of Machinists , No. 833 N.E.2d 43; 2005 Ind. App. LEXIS 1510(Ct. App. Indiana, 3d Dist. Aug. 22, 2005). The court noted evidence in the record of conversations that preceded the execution of both agreements, in which the purchaser indicated its desire to obtain software licenses and support, as well as consulting services, from the vendor. The court also ruled that the forum selection clause applied not only to breach-of-contract claims, but also to fraud and negligence claims arising from the same transaction.

The president of an online book-listing service that acted as an e-mail provider for book-dealer customers violated federal wiretap laws when he ordered employees to systematically divert and read copies of subscriber e-mails for commercial purposes. United States v. Councilman , No. 418 F.3d 67 (1st Cir. en banc Aug. 11, 2005). The appeals court, sitting en banc, ruled that the interception of e-mail messages in temporary, transient electronic storage violates the federal Wiretap Act, as amended by the Electronic Communications Privacy Act (ECPA). The court reasoned that in enacting and amending the provisions of the wiretap laws that cover electronic communications, Congress intended to prohibit interception of e-mail communications whether they are in transit or in storage at the time of the interception.

A trial court did not abuse its discretion in permanently enjoining a software licensee from the use of licensed code for breaching the non-disclosure provisions of the license agreement. DaimlerChrysler Services North America, LLC v. Summit National, Inc., 2005 U.S. App. LEXIS 18063 (6th Cir. Aug. 18, 2005) (unpublished). The appeals court ruled that the evidence before the trial court on the licensor's motion for summary judgment didn't dispute that the licensee allowed outside companies to have access to the software-program source code. The appeals court also ruled that the licensee was not foreclosed from showing during the damages phase of the trial-court proceedings that the software program in use at the time the dispute arose had been modified pursuant to the license agreement to such an extent that it no longer contained any of the code subject to the 1983 license agreement.