Online service providers typically seek to mitigate risk by including arbitration clauses in their user agreements. In order for such agreements to be effective, however, they must be implemented properly. Babcock vs. Neutron Holdings, Inc., a recent Southern District of Florida case involving a plaintiff who was injured while riding one of the defendant’s Lime e-scooters, illustrates that courts will closely scrutinize the details of how an online contract is presented to users to determine whether or not it is enforceable.
Continue Reading Sweating the Details: Court Analyzes User Interface to Uphold Online Arbitration Clause

As we have noted many times in prior articles, courts often refuse to enforce “browsewrap” agreements where terms are presented to users merely by including a link on a page or screen without requiring affirmative acceptance. Courts typically look more favorably on “clickwrap” agreements where users agree to be bound by, for example, checking a box or clicking an “I accept” button.

The problem is that many implementations of online contracts do not fit neatly into one category or the other. The result is that courts, seemingly unable to resist the siren song of the “-wrap” terminology, find themselves struggling to shoehorn real-life cases into the binary clickwrap/browsewrap rubric, and often resort to inventing new terminology such as the dreaded “hybridwrap.”

HealthplanCRM, LLC v. Avmed, Inc., a case out of the Western District of Pennsylvania, illustrates this phenomenon. Plaintiff Cavulus licensed certain CRM software to defendant AvMed. AvMed decided to replace Cavulus software with a different CRM product and engaged defendant NTT to assist AvMed in transitioning its data to the successor product. Cavulus alleged, among other things, that NTT misappropriated its trade secrets in the course of doing this work. Cavulus sought to compel NTT to arbitrate these claims based on an arbitration clause contained in an “End-User Agreement” that was referenced in a link on the log-in page of the Cavulus software.
Continue Reading Court Discovers Rare and Elusive “Enforceable Browsewrap”

A federal district court in New York held that a photographer failed to state a claim against digital-media website Mashable for copyright infringement of a photo that Mashable embedded on its website by using Instagram’s application programming interface (API). The decision turned on Instagram’s terms of use.

Mashable initially sought a license from the plaintiff, a professional photographer named Stephanie Sinclair, to display a photograph in connection with an article the company planned to post on its website, mashable.com. The plaintiff refused Mashable’s offer, but Mashable, nevertheless, embedded the photograph on its website through the use of Instagram’s API.

Instagram’s terms of use state that users grant Instagram a sublicensable license to the content posted on Instagram, subject to Instagram’s privacy policy. Instagram’s privacy policy expressly states that content posted to “public” Instagram accounts is searchable by the public and available for others to use through the Instagram API.
Continue Reading S.D.N.Y.: Public Display of Embedded Instagram Photo Does Not Infringe Copyright

Courts continue to grapple with the enforceability of online agreements. While courts generally enforce clickwrap agreements—online agreements where users affirmatively show their acceptance after being presented with the terms, usually by clicking “I agree”—browsewrap agreements have stood on shakier enforceability grounds. Browsewrap agreements are online terms that, unlike a clickwrap agreement, do not require any affirmative indication of consent. Indeed, users can often continue using a website without ever viewing the terms of a browsewrap agreement, or possibly even knowing they exist. As the Northern District of California’s decision in Alejandro Gutierrez v. FriendFinder Networks Inc. demonstrates, browsewrap agreements are not always unenforceable, but reaching such a determination can be a highly fact-specific inquiry requiring significant discovery—including discovery of offline activities, such as phonecalls between the user and the online service provider.

AdultFriendFinder.com (AFF) is an online dating website. The website is generally free, although users can pay for particular upgrades and services. Users must register to use the site, and AFF collects users’ personal information as part of the registration process. Use of AFF is governed by the site’s Terms of Use (the Terms). Users don’t have to explicitly agree to the Terms in order to register or use AFF, but the Terms are readily available on the site, and they state that continued use of AFF constitutes acceptance. The Terms also include an arbitration provision.
Continue Reading Just Browsing: District Court Finds Browsewrap Agreement Enforceable

A federal district court in Illinois recently held in Anand v. Heath that a digital marketing company could not force a user to arbitrate because a “Continue” button on its website did not provide clear notice that clicking the button constituted assent to the hyperlinked terms and conditions that contained the arbitration provision.

As we have noted previously, website operators who wish to enforce their online terms against users will have a higher likelihood of success if they do two things. First, the website should display the terms to users in a conspicuous fashion. Second, and applicable here, the website should affirmatively and unambiguously require users to assent to the terms. Anand demonstrates that online agreements risk unenforceability when the terms are presented in a manner that does not make clear to users that they are agreeing to be bound.

The website www.retailproductzone.com offers users free gift cards in exchange for their responses to surveys and for their consent to be contacted for marketing purposes. Reward Zone USA LLC, a subsidiary of Fluent Inc., maintains the website. In June 2017, plaintiff Narantuya Anand registered on www.retailproductzone.com and completed a survey to receive a free gift card. According to Anand, she then received several unwanted telemarketing voicemails and text messages. 
Continue Reading Court Holds that Arbitration Clause in “Hybridwrap” Terms Is Unenforceable

On July 19, 2018, in May, et al. v. Expedia Inc., U.S. Magistrate Judge Mark Lane issued a Report and Recommendation recommending that U.S. District Judge Robert Pitman for the Western District of Texas grant a motion to compel arbitration and dismiss a putative class action on the grounds that the plaintiff agreed to the defendants’ website’s Terms and Conditions, which contained a mandatory arbitration clause.

HomeAway User Files Putative Class Action 

HomeAway is an online marketplace for vacation rental properties where property owners can list their properties for rent and travelers can book rental properties. HomeAway’s original business model was to charge owners a fee to list their properties (either on a one-year subscription or pay-per-booking basis) and to allow travelers to search and book rentals for free. HomeAway was acquired by Expedia in 2015 and changed its business model to charge travelers a fee to book rentals in mid-2016. Plaintiff James May had been a property owner who used HomeAway since 2013.
Continue Reading Sneaky Website User Bound by Online Terms of Use’s Arbitration Provision Despite Renewing Subscription in Spouse’s Name

As we have noted previously, YouTube users sometimes object when the online video giant removes their videos based on terms-of-use violations, such as artificially inflated view counts. In a recent California case, Bartholomew v. YouTube, LLC, the court rejected a user’s claim that the statement YouTube posted after it removed her video, which allegedly gave the impression that the video contained offensive content, was defamatory.

Joyce Bartholomew is a musician who creates what she calls “original Christian ministry music.” Ms. Bartholomew produced a video for the song “What Was Your Name” and posted the video on YouTube in January 2014. YouTube assigned a URL to the video, which Ms. Bartholomew began sharing with her listeners and viewers. By April 2014, she claims that the video had amassed over 30,000 views.

Shortly afterwards, however, YouTube removed the video and replaced it with the image of a “distressed face” and the following removal statement: “This video has been removed because its content violated YouTube’s Terms of Service.” The removal statement also provided a hyperlink to YouTube’s “Community Guideline Tips,” which identifies 10 categories of prohibited content: “Sex and Nudity,” “Hate Speech,” “Shocking and Disgusting,” “Dangerous Illegal Acts,” “Children,” “Copyright,” “Privacy,” “Harassment,” “Impersonation” and “Threats.”
Continue Reading California Court Holds That YouTube’s Removal Notice Is Not Defamatory

ARKANSASLast year, this blog raised concerns regarding the TCCWNA, its growing popularity with plaintiffs’ lawyers and the implications for online retailers. At a high level, the TCCWNA is a New Jersey consumer protection law that focuses on contractual terms (including online terms of service) governing transactions between sellers/service providers and New Jersey consumers. It prohibits sellers/service providers from including certain common provisions in their contracts with New Jersey consumers, and provides aggrieved New Jersey consumers with the right to recover from the seller/service provider a civil penalty of not less than $100 per violation. The TCCWNA applies even if the relevant contractual terms are expressly governed by the laws of a state other than New Jersey.
Continue Reading E-tailers Rejoice as Decisions Limit Suits in Federal Court for Alleged Violations of N.J.’s Controversial Consumer Protection Law

A New York State senator has introduced a bill that would make posting footage of a crime to social media with the intention of glorifying violence or becoming famous punishable by up to four years in prison and fines.

Instagram hit the 700-million-user mark.

Brands spent 60% more on social media advertising in the first