e-Commerce Docket Sheet

Arbitration Clause in User Agreement
Does Not Apply to Phone-Sales Agent

An arbitration clause contained in a ticket broker Web site's online user agreement, which applied only to online activity or use of the Web site, is not applicable to a telephone sale initiated by an agent of the ticket broker. Kushner v. StubHub, Inc., 2008 Ohio 3241 (Ohio Ct. App. June 26, 2008). The appellate court affirmed the lower court's ruling denying the online ticket broker's motion to compel arbitration and found that the arbitration clause in the user agreement was unenforceable as to the telephone transaction. The court found that the only reasonable interpretation of the user agreement was that it applied only to online purchases and transactions, rejecting the ticket broker's argument that the user agreement applied to any and all services provided by the broker to any user who ever filled out an online registration form.

An arbitration clause that was added pursuant to the Internet-modification provisions of a service agreement is not unconscionable between two Internet-savvy corporate parties. Margae, Inc. v. Clear Link Technologies, LLC, 2008 U.S. Dist. LEXIS 46765 (D. Utah June 16, 2008). The court granted the defendant's motion to enforce, holding that the plaintiff agreed to arbitrate any claim relating to the Internet marketing services provided to the defendant pursuant to their agreement. The court rejected the plaintiff's argument that it was unfair for the defendant to grant itself a unilateral right to modify the contract by posting a new one on its Web site, concluding that the plaintiff continually visited the defendant's Web site, which contained a link to the amended agreement, and that the litigants were “Internet-savvy corporate parties that entered into a contract on the Internet and agreed to make changes through the Internet.”

A licensor can make out a claim for copyright infringement against a licensee that allegedly violated the distribution provisions of a license involving instructional videotapes where the licensee distributed the tapes for sale or transfer without authorization. Gold Cross Safety Corp. v. PHH Vehicle Mgmt., 2008 U.S. Dist. LEXIS 50354 (D. N.J. June 27, 2008). The court denied the defendant's motion to dismiss its copyright claim, holding that a licensor who enters into a contract for a non-exclusive license may bring suit for copyright infringement if the licensee's use goes beyond the scope of the license. The court allowed the plaintiff to proceed with its copyright claim, rejecting the defendant's argument that where a copyright holder agrees to the distribution of the copyrighted material, any dispute involving distribution should be governed by contract law. The court also found that it could not rule on the defendant's affirmative defense based on the first-sale doctrine because it found the license agreement's distribution provisions to be ambiguous.

A cause of action based on the alleged misappropriation of musical work may be cognizable under copyright law, but not under the Lanham Act, because unfair-competition claims protect only the producer of the goods, not the authors of creative content. Brainard v. Vassar, 2008 U.S. Dist. LEXIS 46154 (M.D. Tenn. June 12, 2008). The court dismissed the plaintiff's Lanham Act claims, holding that under the Supreme Court's Dastar decision, claims of false authorship, when raised to protect an author's interest in the intellectual content of communicative products, were not actionable under '43(a) the Lanham Act, and should instead be pursued under copyright law. The court found that the plaintiffs did not allege to have produced items that have been incorrectly labeled by the defendants or that the defendants misled the public as to the origin of goods, but instead alleged that the defendants stole their song and sold it under their own authorship, a claim not cognizable under the Lanham Act.

The patent-exhaustion doctrine prevents a patentee from further asserting its right in patented methods substantially embodied in products permissibly sold by its licensee to third-party downstream manufacturers. Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109 (U.S. June 9, 2008). The Supreme Court reversed the Federal Circuit's ruling that the patent-exhaustion doctrine did not apply to method patents and held that the licensee's authorized sale of computer chipsets that substantially embody the method patents to the defendant third-party manufacturer exhausted the plaintiff's patent rights. The Court held that the patent-exhaustion doctrine applied to method claims; otherwise, patentees seeking to avoid patent exhaustion “could simply draft their patent claims to describe a method instead of an apparatus.” The Court also found that the parties' licensing agreement, which required the licensee to give its customers notice that the patentee had not licensed those customers to practice its patents, did not, in fact, restrict the licensee's right to sell its products to downstream purchasers who intended to combine them with computer hardware the licensee did not supply.

Arbitration Clause in User Agreement
Does Not Apply to Phone-Sales Agent

An arbitration clause contained in a ticket broker Web site's online user agreement, which applied only to online activity or use of the Web site, is not applicable to a telephone sale initiated by an agent of the ticket broker. Kushner v. StubHub, Inc. , 2008 Ohio 3241 (Ohio Ct. App. June 26, 2008). The appellate court affirmed the lower court's ruling denying the online ticket broker's motion to compel arbitration and found that the arbitration clause in the user agreement was unenforceable as to the telephone transaction. The court found that the only reasonable interpretation of the user agreement was that it applied only to online purchases and transactions, rejecting the ticket broker's argument that the user agreement applied to any and all services provided by the broker to any user who ever filled out an online registration form.

An arbitration clause that was added pursuant to the Internet-modification provisions of a service agreement is not unconscionable between two Internet-savvy corporate parties. Margae, Inc. v. Clear Link Technologies, LLC, 2008 U.S. Dist. LEXIS 46765 (D. Utah June 16, 2008). The court granted the defendant's motion to enforce, holding that the plaintiff agreed to arbitrate any claim relating to the Internet marketing services provided to the defendant pursuant to their agreement. The court rejected the plaintiff's argument that it was unfair for the defendant to grant itself a unilateral right to modify the contract by posting a new one on its Web site, concluding that the plaintiff continually visited the defendant's Web site, which contained a link to the amended agreement, and that the litigants were “Internet-savvy corporate parties that entered into a contract on the Internet and agreed to make changes through the Internet.”

A licensor can make out a claim for copyright infringement against a licensee that allegedly violated the distribution provisions of a license involving instructional videotapes where the licensee distributed the tapes for sale or transfer without authorization. Gold Cross Safety Corp. v. PHH Vehicle Mgmt., 2008 U.S. Dist. LEXIS 50354 (D. N.J. June 27, 2008). The court denied the defendant's motion to dismiss its copyright claim, holding that a licensor who enters into a contract for a non-exclusive license may bring suit for copyright infringement if the licensee's use goes beyond the scope of the license. The court allowed the plaintiff to proceed with its copyright claim, rejecting the defendant's argument that where a copyright holder agrees to the distribution of the copyrighted material, any dispute involving distribution should be governed by contract law. The court also found that it could not rule on the defendant's affirmative defense based on the first-sale doctrine because it found the license agreement's distribution provisions to be ambiguous.

A cause of action based on the alleged misappropriation of musical work may be cognizable under copyright law, but not under the Lanham Act, because unfair-competition claims protect only the producer of the goods, not the authors of creative content. Brainard v. Vassar, 2008 U.S. Dist. LEXIS 46154 (M.D. Tenn. June 12, 2008). The court dismissed the plaintiff's Lanham Act claims, holding that under the Supreme Court's Dastar decision, claims of false authorship, when raised to protect an author's interest in the intellectual content of communicative products, were not actionable under '43(a) the Lanham Act, and should instead be pursued under copyright law. The court found that the plaintiffs did not allege to have produced items that have been incorrectly labeled by the defendants or that the defendants misled the public as to the origin of goods, but instead alleged that the defendants stole their song and sold it under their own authorship, a claim not cognizable under the Lanham Act.

The patent-exhaustion doctrine prevents a patentee from further asserting its right in patented methods substantially embodied in products permissibly sold by its licensee to third-party downstream manufacturers. Quanta Computer, Inc. v. LG Electronics, Inc. , 128 S. Ct. 2109 (U.S. June 9, 2008). The Supreme Court reversed the Federal Circuit's ruling that the patent-exhaustion doctrine did not apply to method patents and held that the licensee's authorized sale of computer chipsets that substantially embody the method patents to the defendant third-party manufacturer exhausted the plaintiff's patent rights. The Court held that the patent-exhaustion doctrine applied to method claims; otherwise, patentees seeking to avoid patent exhaustion “could simply draft their patent claims to describe a method instead of an apparatus.” The Court also found that the parties' licensing agreement, which required the licensee to give its customers notice that the patentee had not licensed those customers to practice its patents, did not, in fact, restrict the licensee's right to sell its products to downstream purchasers who intended to combine them with computer hardware the licensee did not supply.