The EULA: A Poisonous Tree
HI!     My Name isPeter “Deuce” Bradshaw  I’m writing a paper      about EULAs
I want to share    my work and     research.    Continue theConversation with me    Via Twitter: @BradshawLaw
What is a EULA?
EndUserLicenseAgreement
Contract between  licensor and purchaser,  establishing purchaser’sright to use the software.
Usually unseen until After    purchase and Assented             to by clicking                 “I Accept”
Objective Theory ofContracts
existence    of a contractis determined by the legal significance    of the external acts of a party,  rather than by the ...
In other words        clicking    “I Accept”
Contracts ofAdhesion
Standard forms, included in the packaging or installation   materials for software or licenses for information       other...
BLanketAssentTheory
No assent                       to any specific terms.        bRoad assent                                 to the transact...
Prominent Eula Cases
1990 Congressional amendment to First Sale Doctrine    1991 Step-Save Data Systems, Inc. v. Wyse Technology        1996   ...
1991Step-Save Data Systems, Inc.                     V. Wyse Technology    Unfair to bind buyer because seller            ...
1991ProCD v. Zeidenberg   “Agreement” specifically limited the use   of the application program and listings     Zeidenber...
1991ProCD v. Zeidenberg (Continued)             UCC 2-204 controls:       “Any manner sufficient to Show                 A...
1991ProCD v. Zeidenberg (Continued)   Case NOT decided on clickwrap grounds,         but rather on Shrinkwrap     UCC 2-20...
1998Hotmail v van$ money pie     Pornography and Spam messaging         against user agreement   Grant of Injunction witho...
1998Groff v America online inc.           Forum selection clause     Grant of aol motion to dismiss for              impro...
2002Comb v. paypal inc.        Procedural unconscionability           Even where Acceptace          is procedurally lackin...
2003Bowers v. bayside techs inc.          Copyright & Agreement   contract claims are preempted if the   work is within th...
Collision Of CopyRight    EULA   Cases
1984   Sony Corp v. Universal City Studios, Inc.       2003 Chamberlain v Skylink Technologies         2004 LexMark Cases ...
1984Sony Corp v. Universal City Studios, Inc.                 BetaMax Case.       EStablished fair use doctrine as        ...
2003Chamberlain v. Skylink Technologies            Garage Door Openers      Warranty and Website Did Not     Explicitly Ba...
2004Lexmark Cases          Printer Cartridges     lexmark cartridges encrypt       authentication secquenceProphecized: Ma...
2005Blizzard IAlternate servers for playing Warcraft        Defendant contractually    yielded right to reverse engineer  ...
2008Blizzard 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 SoftwareHeld that Realnetworks ...
Eulas include  restrictive termson 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 ...
PHOTO CREDIT     Title Slide                    Neil               Kandalgaonkar               http://www.flickr.com/photos...
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EULAs: Fruit of the Poisonous Tree

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EULAs: Fruit of the Poisonous Tree

  1. 1. The EULA: A Poisonous Tree
  2. 2. HI! My Name isPeter “Deuce” Bradshaw I’m writing a paper about EULAs
  3. 3. I want to share my work and research. Continue theConversation with me Via Twitter: @BradshawLaw
  4. 4. What is a EULA?
  5. 5. EndUserLicenseAgreement
  6. 6. Contract between licensor and purchaser, establishing purchaser’sright to use the software.
  7. 7. Usually unseen until After purchase and Assented to by clicking “I Accept”
  8. 8. Objective Theory ofContracts
  9. 9. existence of a contractis determined by the legal significance of the external acts of a party, rather than by the actual intent.
  10. 10. In other words clicking “I Accept”
  11. 11. Contracts ofAdhesion
  12. 12. Standard forms, included in the packaging or installation materials for software or licenses for information other party has no real bargaining powerThe non drafting party often would not understand the language even if the contract was read terms are defined by the drafting partyReflects 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
  13. 13. BLanketAssentTheory
  14. 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.
  15. 15. Prominent Eula Cases
  16. 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. 17. 1991Step-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. 18. 1991ProCD 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. 19. 1991ProCD 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. 20. 1991ProCD v. Zeidenberg (Continued) Case NOT decided on clickwrap grounds, but rather on Shrinkwrap UCC 2-204 invocation set groundwork for clickwrap
  21. 21. 1998Hotmail 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. 22. 1998Groff 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. 23. 2002Comb v. paypal inc. Procedural unconscionability Even where Acceptace is procedurally lacking, still enforceable if the substantive terms are Reasonable
  24. 24. 2003Bowers 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
  25. 25. Collision Of CopyRight EULA Cases
  26. 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. 27. 1984Sony 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. 28. 2003Chamberlain 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. 29. 2004Lexmark Cases Printer Cartridges lexmark cartridges encrypt authentication secquenceProphecized: Manufacturers Would lockdown devices through a combination of copyright and contract
  30. 30. 2005Blizzard IAlternate servers for playing Warcraft Defendant contractually yielded right to reverse engineer Holding based on bowers
  31. 31. 2008Blizzard II World of Warcraft “bot” Analysis Similar to blizzard I in analysis and holding
  32. 32. 2009 Realnetworks, Inc. v. Dvd copy control assn. Inc DVD Copying SoftwareHeld that Realnetworks could not prove that its product would not be used for illegitimate purposes High threshold requirement for creators of software
  33. 33. Eulas include restrictive termson purchasers that were not assented to by that purchaser
  34. 34. Allowing content creators and manufacturers to step into the role of legislators
  35. 35. These Contracts of Adhesion should be treated as poisonous Trees
  36. 36. For the Protection of Consumers EULA Terms should be Held inherently unconscionable until the drafting party demonstrates their Reasonableness
  37. 37. PHOTO CREDIT Title Slide Neil Kandalgaonkar http://www.flickr.com/photos/brevity/2485616531

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