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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 contract
is 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
       other party has no real bargaining power
The non drafting party often would not understand the
         language even if the contract was read
         terms are defined by the drafting party
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
No assent
                       to any specific terms.
        bRoad assent
                                 to the transaction

                        to any NON-unreasonable terms
                             that do not alter these
                          reasonable expectations as to
                           the terms of the transaction.
Prominent
 Eula
 Cases
1990 Congressional amendment to First Sale Doctrine
    1991 Step-Save Data Systems, Inc. v. Wyse Technology

        1996   ProCD v. Zeidenberg

           1998    Hotmail Corp. v. Van$ Money Pie Inc.
                      Groff v. Am. Online, Inc



                    2002 Comb v. PayPal, Inc.,
                      2003 Bowers v. Baystate Techs., Inc,.
1991
Step-Save Data Systems, Inc.
                     V. Wyse Technology
    Unfair to bind buyer because seller
              sent last form
     UCC 2-207 Approach should COntrol:
            Parties only Intended
               to Incorp. Terms
          which both Parties agreed
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
    User had ability to decline the terms
      acknowledging the legitimacy of
            Accept or Decline
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
 CopyRight
    EULA
   Cases
1984   Sony Corp v. Universal City Studios, Inc.



       2003 Chamberlain v Skylink Technologies
         2004 LexMark Cases
            2005 Blizzard I
                 2008      Blizzard II


                                     RealNetworks, Inc. v. DVD
                          2009       Copy Control Ass’N Inc.
1984
Sony Corp v. Universal City Studios, Inc.
                 BetaMax Case.
       EStablished fair use doctrine as
               a check to the
            "monopoly privileges"
            provided by Congress
          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.
               v. Dvd copy control assn. Inc
            DVD Copying Software
Held that Realnetworks could not prove
 that its product would not be used for
           illegitimate purposes
      High threshold requirement for
          creators of software
Eulas include
  restrictive 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
PHOTO CREDIT     Title Slide
                    Neil
               Kandalgaonkar
               http://www.flickr.com/photos/brevity/2485616531

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EULAs: Fruit of the Poisonous Tree

  • 1. The EULA: A Poisonous Tree
  • 2. HI! My Name is Peter “Deuce” Bradshaw I’m writing a paper about EULAs
  • 3. I want to share my work and research. Continue the Conversation with me Via Twitter: @BradshawLaw
  • 4. What is a EULA?
  • 6. Contract between licensor and purchaser, establishing purchaser’s right to use the software.
  • 7. Usually unseen until After purchase and Assented to by clicking “I Accept”
  • 9. existence of a contract is determined by the legal significance of the external acts of a party, rather than by the actual intent.
  • 10. In other words clicking “I Accept”
  • 12. Standard forms, included in the packaging or installation materials for software or licenses for information other party has no real bargaining power The non drafting party often would not understand the language even if the contract was read terms are defined by the drafting party 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
  • 14. No assent to any specific terms. bRoad assent to the transaction to any NON-unreasonable terms that do not alter these reasonable expectations as to the terms of the transaction.
  • 16. 1990 Congressional amendment to First Sale Doctrine 1991 Step-Save Data Systems, Inc. v. Wyse Technology 1996 ProCD v. Zeidenberg 1998 Hotmail Corp. v. Van$ Money Pie Inc. Groff v. Am. Online, Inc 2002 Comb v. PayPal, Inc., 2003 Bowers v. Baystate Techs., Inc,.
  • 17. 1991 Step-Save Data Systems, Inc. V. Wyse Technology Unfair to bind buyer because seller sent last form UCC 2-207 Approach should COntrol: Parties only Intended to Incorp. Terms which both Parties agreed
  • 18. 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
  • 19. 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
  • 20. 1991 ProCD v. Zeidenberg (Continued) Case NOT decided on clickwrap grounds, but rather on Shrinkwrap UCC 2-204 invocation set groundwork for clickwrap
  • 21. 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
  • 22. 1998 Groff v America online inc. Forum selection clause Grant of aol motion to dismiss for improper venue User had ability to decline the terms acknowledging the legitimacy of Accept or Decline
  • 23. 2002 Comb v. paypal inc. Procedural unconscionability Even where Acceptace is procedurally lacking, still enforceable if the substantive terms are Reasonable
  • 24. 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
  • 26. 1984 Sony Corp v. Universal City Studios, Inc. 2003 Chamberlain v Skylink Technologies 2004 LexMark Cases 2005 Blizzard I 2008 Blizzard II RealNetworks, Inc. v. DVD 2009 Copy Control Ass’N Inc.
  • 27. 1984 Sony Corp v. Universal City Studios, Inc. BetaMax Case. EStablished fair use doctrine as a check to the "monopoly privileges" provided by Congress Created Market for Retail Movie Releases
  • 28. 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
  • 29. 2004 Lexmark Cases Printer Cartridges lexmark cartridges encrypt authentication secquence Prophecized: Manufacturers Would lock down devices through a combination of copyright and contract
  • 30. 2005 Blizzard I Alternate servers for playing Warcraft Defendant contractually yielded right to reverse engineer Holding based on bowers
  • 31. 2008 Blizzard II World of Warcraft “bot” Analysis Similar to blizzard I in analysis and holding
  • 32. 2009 Realnetworks, Inc. v. Dvd copy control assn. Inc DVD Copying Software Held that Realnetworks could not prove that its product would not be used for illegitimate purposes High threshold requirement for creators of software
  • 33. Eulas include restrictive terms on purchasers that were not assented to by that purchaser
  • 34. Allowing content creators and manufacturers to step into the role of legislators
  • 35. These Contracts of Adhesion should be treated as poisonous Trees
  • 36. For the Protection of Consumers EULA Terms should be Held inherently unconscionable until the drafting party demonstrates their Reasonableness
  • 37. PHOTO CREDIT Title Slide Neil Kandalgaonkar http://www.flickr.com/photos/brevity/2485616531