e-Commerce Docket Sheet

Web Arbitration Clause
Before Purchase Does
Not Cancel Unconscionability

The online availability of a service agreement containing an arbitration clause, which could have been viewed by a consumer prior to his purchase of a mobile phone in a brick-and-mortar store, does not overcome the consumer's claims of procedural unconscionability based on the fact that the agreement may not have been available in the store at the time of purchase. Trujillo v. Apple Computer, Inc., 2008 U.S. Dist. LEXIS 32128 (N.D. Ill. Apr. 18, 2008). The court denied the defendant's motion to compel arbitration on the consumer's purported class-action suit, but allowed the parties to rebrief the issue and submit additional affidavits. The court noted that the availability of the service agreement prior to the plaintiff's purchase of the mobile phone “may be a critical factor in determining the issue of procedural unconscionability,” but due to the insufficiency of facts on the record, the court ordered the parties to make supplemental submissions. The court rejected the defendant's argument that the service agreement's online availability was sufficient, stating that the defendant has not “cited any Illinois case supporting the proposition that an agreement is available prior to the customer's purchase of a product only if the customer goes and looks for it elsewhere (including on-line).”

Section 230 of the Communications Decency Act (“CDA”) immunizes a Web hosting company from liability for alleged defamatory content of the Web sites it hosts. Kruska v. Perverted Justice Foundation Inc., No. 08-0054 (D. Ariz. July 8, 2008). The court granted the defendant's motion to dismiss, finding that the defendant, as a Web host, was not responsible for any of the third-party content of the allegedly offending Web sites, and therefore, could not be considered an “information content provider.” The court also dismissed the plaintiff's Lanham Act claims based on the defendant's logo being present on the Web sites, concluding that such unfair competition claims would be applicable only if the Web site owner were using the defendant's mark without permission and the defendant itself brought suit. In this case, the presence of the defendant's logo on the allegedly offending Web sites, according to the court, “no more infers support of the contents found there than if the manufacturer of a television's distinctive logo would infer the manufacturer's support for what is being shown on the screen.”

A software program that enables users of the online video game World of Warcraft to “cheat” by automatically performing in-game tasks with an automated “bot” and avoid the game's security technologies does not violate the anticircumvention portions of the Digital Millennium Copyright Act (“DMCA”). MDY Industries, LLC v. Blizzard Entm't, Inc., 2008 U.S. Dist. LEXIS 53988 (D. Ariz. July 14, 2008). The court granted the software-maker's motion for summary judgment on the game-maker's DMCA claim under Section 1201(a)(2), which applies to the circumvention of protective measures that control access to software, but denied its motion on the Section 1201(b)(1) claim, which applies to technological measures that protect copyright rights, due to material issues of fact. The court found that the game's anti-bot security measures did not control access to the game-maker's copyrighted software because users already had full access to that code once the game's client software was placed on the user's computer. Consequently, the court held that Section 1201(a)(2) did not apply and the “cheat” software's capability to evade the security measures did not violate the statute. However, the court granted the game-maker's motion for summary judgment on its contributory copyright claims, finding that game players were licensees who were permitted to copy the copyrighted game client software only in conformance with the game's terms of use, and that when users launched the game using the “cheat software,” they breached the terms-of-use restriction on the use of “bots” and exceeded the game's license. The court also found that when the “cheat software” was run, it necessarily created copies of the game client software to random access memory (“RAM”). Ultimately, the court concluded that the copying of the game software to RAM, coupled with the unauthorized user activity outside of the game's license, constituted copyright infringement.

Under New York law, a company's failure to exercise an option to continue using an instant-messaging application under a software license agreement in a timely manner will not be excused on equitable grounds. Facetime Communications, Inc. v. Reuters Limited, No. 08-4730, 2008 U.S. Dist. LEXIS 56223 (S.D.N.Y. July 22, 2008). The court granted the licensor's motion for summary judgment, ruling that the licensee's right to use the licensed software expired when the option was not timely exercised. The court stated that “New York takes an exceedingly hard line on time-limited options,” requiring holders to comply strictly with the terms of the agreement. The court rejected the licensee's equitable arguments, finding that while New York courts have been known to permit late exercise to avoid a disproportionate forfeiture, such a doctrine has thus far been limited to the landlord-tenant context. In this instance, the court found that there is “absolutely no authority for the proposition that having to rework the software would constitute a forfeiture, as opposed to a loss for the [licensee] ' a loss that [the licensee] could have avoided by diligently protecting its rights.

A print-on-demand (“POD”) publisher that transforms a .PDF manuscript into a finished book for a fee the author pays, but does not review, edit or market manuscripts or finished books, is not liable for an alleged defamatory book, absent a finding that it knew or had reason to know of the alleged defamation. Sandler v. Calcagni, 2008 U.S. Dist. LEXIS 54374 (D. Me. July 16, 2008). The court granted the publisher's motion for summary judgment. The court determined that because the POD publisher, unlike a traditional publisher, does not undertake to review, edit or fact-check any of its publications, it had no means of knowing whether defamatory material was contained within the works that it published and could not be found liable for defamation. The court also ruled that a POD publisher that transformed a manuscript into a book with no editorial control and no communal process with the author had no duty to inspect the work for defamatory content.

Web Arbitration Clause
Before Purchase Does
Not Cancel Unconscionability

The online availability of a service agreement containing an arbitration clause, which could have been viewed by a consumer prior to his purchase of a mobile phone in a brick-and-mortar store, does not overcome the consumer's claims of procedural unconscionability based on the fact that the agreement may not have been available in the store at the time of purchase. Trujillo v. Apple Computer, Inc., 2008 U.S. Dist. LEXIS 32128 (N.D. Ill. Apr. 18, 2008). The court denied the defendant's motion to compel arbitration on the consumer's purported class-action suit, but allowed the parties to rebrief the issue and submit additional affidavits. The court noted that the availability of the service agreement prior to the plaintiff's purchase of the mobile phone “may be a critical factor in determining the issue of procedural unconscionability,” but due to the insufficiency of facts on the record, the court ordered the parties to make supplemental submissions. The court rejected the defendant's argument that the service agreement's online availability was sufficient, stating that the defendant has not “cited any Illinois case supporting the proposition that an agreement is available prior to the customer's purchase of a product only if the customer goes and looks for it elsewhere (including on-line).”

Section 230 of the Communications Decency Act (“CDA”) immunizes a Web hosting company from liability for alleged defamatory content of the Web sites it hosts. Kruska v. Perverted Justice Foundation Inc., No. 08-0054 (D. Ariz. July 8, 2008). The court granted the defendant's motion to dismiss, finding that the defendant, as a Web host, was not responsible for any of the third-party content of the allegedly offending Web sites, and therefore, could not be considered an “information content provider.” The court also dismissed the plaintiff's Lanham Act claims based on the defendant's logo being present on the Web sites, concluding that such unfair competition claims would be applicable only if the Web site owner were using the defendant's mark without permission and the defendant itself brought suit. In this case, the presence of the defendant's logo on the allegedly offending Web sites, according to the court, “no more infers support of the contents found there than if the manufacturer of a television's distinctive logo would infer the manufacturer's support for what is being shown on the screen.”

A software program that enables users of the online video game World of Warcraft to “cheat” by automatically performing in-game tasks with an automated “bot” and avoid the game's security technologies does not violate the anticircumvention portions of the Digital Millennium Copyright Act (“DMCA”). MDY Industries, LLC v. Blizzard Entm't, Inc., 2008 U.S. Dist. LEXIS 53988 (D. Ariz. July 14, 2008). The court granted the software-maker's motion for summary judgment on the game-maker's DMCA claim under Section 1201(a)(2), which applies to the circumvention of protective measures that control access to software, but denied its motion on the Section 1201(b)(1) claim, which applies to technological measures that protect copyright rights, due to material issues of fact. The court found that the game's anti-bot security measures did not control access to the game-maker's copyrighted software because users already had full access to that code once the game's client software was placed on the user's computer. Consequently, the court held that Section 1201(a)(2) did not apply and the “cheat” software's capability to evade the security measures did not violate the statute. However, the court granted the game-maker's motion for summary judgment on its contributory copyright claims, finding that game players were licensees who were permitted to copy the copyrighted game client software only in conformance with the game's terms of use, and that when users launched the game using the “cheat software,” they breached the terms-of-use restriction on the use of “bots” and exceeded the game's license. The court also found that when the “cheat software” was run, it necessarily created copies of the game client software to random access memory (“RAM”). Ultimately, the court concluded that the copying of the game software to RAM, coupled with the unauthorized user activity outside of the game's license, constituted copyright infringement.

Under New York law, a company's failure to exercise an option to continue using an instant-messaging application under a software license agreement in a timely manner will not be excused on equitable grounds. Facetime Communications, Inc. v. Reuters Limited, No. 08-4730, 2008 U.S. Dist. LEXIS 56223 (S.D.N.Y. July 22, 2008). The court granted the licensor's motion for summary judgment, ruling that the licensee's right to use the licensed software expired when the option was not timely exercised. The court stated that “New York takes an exceedingly hard line on time-limited options,” requiring holders to comply strictly with the terms of the agreement. The court rejected the licensee's equitable arguments, finding that while New York courts have been known to permit late exercise to avoid a disproportionate forfeiture, such a doctrine has thus far been limited to the landlord-tenant context. In this instance, the court found that there is “absolutely no authority for the proposition that having to rework the software would constitute a forfeiture, as opposed to a loss for the [licensee] ' a loss that [the licensee] could have avoided by diligently protecting its rights.

A print-on-demand (“POD”) publisher that transforms a .PDF manuscript into a finished book for a fee the author pays, but does not review, edit or market manuscripts or finished books, is not liable for an alleged defamatory book, absent a finding that it knew or had reason to know of the alleged defamation. Sandler v. Calcagni, 2008 U.S. Dist. LEXIS 54374 (D. Me. July 16, 2008). The court granted the publisher's motion for summary judgment. The court determined that because the POD publisher, unlike a traditional publisher, does not undertake to review, edit or fact-check any of its publications, it had no means of knowing whether defamatory material was contained within the works that it published and could not be found liable for defamation. The court also ruled that a POD publisher that transformed a manuscript into a book with no editorial control and no communal process with the author had no duty to inspect the work for defamatory content.