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New York has enacted a new law, effective February 9, 2021, regulating automatic renewal and some “free trial” type agreements. While some organizations may have already taken steps to be in compliance with industry requirements, the federal Restore Online Shoppers’ Confidence Act (ROSCA), and similar auto-renewal laws in place…

In continuing its efforts to enforce its terms and policies against developers that engage in unauthorized scraping of user data, this week Facebook brought suit against two marketing analytics firms, BrandTotal Ltd (“BrandTotal”) and Unimania, Inc. (“Unimania”) (collectively, the “Defendants”) (Facebook, Inc. v. BrandTotal Ltd., No. 20Civ04246…

Many online services feature comprehensive terms of use intended to protect their business from various types of risks.  While it is often the case that a great deal of thought goes into the creation of those terms, frequently less attention is paid to how those terms are actually presented to users of the service. As case law continues to demonstrate, certain mobile and website presentations will be held to be enforceable, others will not.  Courts continue to indicate that enforceability of terms accessible by hyperlink depends on the totality of the circumstances, namely the clarity and conspicuousness of the relevant interface (both web and mobile) presenting the terms to the user. In a prior post about electronic contracting this year, we outlined, among other things, the danger of having a cluttered registration screen.  In this post, we will spotlight five recent rulings from the past few months where courts blessed the mobile contracting processes of e-commerce companies, as well as one case which demonstrates the danger of using a pre-checked box to indicate assent to online terms.

The moral of these stories is clear – the presentation of online terms is essential to enhancing the likelihood that they will be enforced, if need be. Thus, the design of the registration or sign-up page is not just an issue for the marketing, design and technical teams – the legal team must focus on how a court would likely view a registration interface, including pointing out the little things that can make a big difference in enforceability. A failure to present the terms properly could result in the most carefully drafted terms of service ultimately having no impact on the business at all.…

This past week, the operator of the popular Weather Channel (“TWC”) mobile phone app entered into a Stipulation of Settlement with the Los Angeles City Attorney, Mike Feuer (“City Attorney”), closing the books on one of the first litigations to focus on the collection of locational data through mobile phones. (People v. TWC Product and Technology, LLC, No. 19STCV00605 (Cal. Super., L.A. Cty, Stipulation Aug. 14, 2020)). While the settlement appears to allow TWC to continue to use locational information for app-related services and to serve advertising (as long the app includes some agreed-upon notices and screen prompts to consumers), what is glaringly absent from the settlement is a discussion of sharing locational information with third parties for purposes other than serving advertising or performing services in the app. Because applicable law, industry practice and the policies of Apple and Google themselves have narrowed the ability to share locational information for such purposes, the allegations of the case were, in a sense, subsumed in the tsunami of attention that locational information sharing has attracted. While some are viewing this settlement as a roadmap for locational information collection and sharing, in fact the settlement is quite narrow.…

This past March, many organizations were forced to suddenly pivot to a “work from home” environment (“WFH”) as COVID-19 spread across our country.  However, many companies did not have the necessary technical infrastructure in place to support their full workforce on a WFH basis.  Often, remote access systems were configured assuming only a portion of a company’s employees – not 100% of a company’s employees – would be remotely accessing the corporate networks simultaneously.  In addition, many employees have limited home Wi-Fi capacity that is insufficient to sustain extended, robust connections with the office systems.  Networks can then become overloaded, connections dropped, and employees can experience extended latency issues, frozen transmissions and the like.

As a result, many employees are using a work-around — often with their employer’s knowledge and approval.  They connect their personal devices to their employer’s network to download what they need from the network, but disconnect to perform the bulk of their work offline.  On a periodic basis and upon the completion of the task at hand, those employees then typically upload or distribute the work product to the organization’s network.…

The COVID-19 pandemic has fundamentally altered the way we live and conduct business. Most non-essential businesses have closed their offices and established entirely remote workforces, and many individuals may be in quarantine, which means that “wet” signatures on paper can be highly inconvenient. This reality has focused more attention on electronic formats. In this blog post we examine the landscape of electronic signatures in light of the pandemic and what it will mean for signature requirements going forward. Electronic signatures apply to both agreements entered into online, such as when completing an internet transaction or assenting to a contract via email, as well as paper documents. With businesses wondering under what circumstances electronic signatures are binding, this post briefly lays out what rules businesses need to follow.…

We continue to wait to see if the Supreme Court will accept LinkedIn’s petition to overturn the Ninth Circuit’s blockbuster ruling in the hiQ Labs case.  In that case, the appeals court held that an entity engaging in scraping of “public” data had shown a likelihood of success on its claim that such access does not constitute access “without authorization” under the federal Computer Fraud and Abuse Act (CFAA).

In the meantime, earlier this week the Supreme Court agreed to hear the appeal of an Eleventh Circuit decision that affirmed the conviction of a police officer under the CFAA for “exceeding authorized access” for accessing police databases for personal gain. (See U.S. v. Van Buren, 940 F. 3d 1192 (11th Cir. 2019), pet. for cert. granted Van Buren v. U.S., No. 19-783 (Apr. 20, 2020)).  This would be the Supreme Court’s first CFAA case.

And in addition to the news at the Supreme Court, late last month, a D.C. district court issued a ruling interpreting the extent of criminal liability under the CFAA for accessing websites in contravention of terms of use for academic research. In that case, the D.C. court held that the mere violation of website terms of use cannot form the basis of criminal liability for “unauthorized access” or “exceeding authorized access” under the CFAA. (Sandvig v. Barr, No. 16. 1368 (D.D.C. Mar. 27, 2020)).…

In an innovative initiative in the battle against the Coronavirus, the newly-formed Open COVID Coalition (the “Coalition”) launched the Open COVID Pledge (the “Pledge”), a framework for organizations to contribute intellectual property to the fight against COVID-19. Pursuant to the Pledge, rightsholders can openly license intellectual property to facilitate the development of tools and technologies to counter the COVID pandemic. These would include the manufacturing of medical equipment and testing kits, as well as the development of software, AI and biotech solutions to contain and end the virus. Many major technology companies and other organizations have signed on to the Pledge.

The Coalition created a form of license which participants may to use to fulfill the pledge.  Under the license, the Open COVID License 1.0 (“OCL”), the pledgor grants a “non-exclusive, royalty-free, worldwide, fully paid-up license (without the right to sublicense)” to exploit the IP (other than trademarks or trade secrets) in products, services and other articles of manufacture “for the sole purpose of ending the ‘COVID-19 Pandemic’ (as defined by the World Health Organization, “WHO”) and minimizing the impact of the disease, including without limitation the diagnosis, prevention, containment, and treatment of the COVID-19 Pandemic.” The term of the OCL is retroactive to December 1, 2019 and runs until one year after WHO declares the end of the pandemic. Under the OCL, the pledgor “will not assert any regulatory exclusivity against any entity for use of the Licensed IP” in accordance with the license grant, and agrees to not seek injunctive or regulatory relief to prevent any entity from using the licensed IP. As with some traditional open source licenses, the licensed IP is granted without any warranties and the license is suspended if the license threatens or initiates any legal proceeding against the pledgor. Lastly, all copyright and related rights granted under the OCL are deemed waived pursuant to the Creative Commons 1.0 Universal License (public domain dedication).

In recent years, courts have issued a host of rulings as to whether online or mobile users received adequate notice of and consented to user agreements or website terms when completing an online purchase or registering for a service. Some online agreements have been enforced, while others have not. In each case, judges have examined the circumstances behind the transaction closely, scrutinizing the user interface and how the terms are presented before a user completes a transaction. In general, most courts seek to determine whether the terms are reasonably conspicuous to the prudent internet user and whether the user manifested sufficient assent by signing up for a service or completing a transaction.

From the perspective of making a sign-up process as smooth as possible, there is often an interest in moving the reference to terms and conditions out of the main flow of user sign-ups.  However, as we were reminded recently by an Illinois court examining the interfaces of DVD rental company Redbox, one does so at risk of finding those terms to be unenforceable.

The Illinois court noted numerous shortcomings with Redbox’s electronic contracting process.  It found that because links to the relevant terms were not clearly and conspicuously displayed, customers did not have constructive notice that they were assenting to those terms when hitting the “Pay Now” button to rent a DVD at a kiosk or by signing into a Redbox account online. (Wilson v. Redbox Automated Retail, LLC, No. 19-01993 (N.D. Ill. Mar. 25, 2020)). As such, the court denied Redbox’s motion to compel arbitration of plaintiff’s claims.…

In early February 2020, before most of us were truly aware of the implications of COVID-19, a well-respected IT consulting group predicted a $4.3 trillion global spend on information technology in 2020. Drivers of the projected activity included cybersecurity, outdated infrastructure, mobile accessibility needs, cloud and SaaS transitions, and on-premises technology requirements.  In late 2019, another well-respected consulting group had predicted that, in 2020, “[t]here will be increasing opportunities for technology vendors and service providers to grow their businesses, and for technology buyers to innovate and upgrade their infrastructure, software, and services.” In fact, as 2020 began, many deals for technology development, implementation and related services were signed and technology providers, consultants and related service providers (collectively referred to in this post as “vendors”) and their customers were busy building, implementing and testing new systems.

Then came COVID-19. Most people in the United States and in many other parts of the world are now working from home. Capital markets are volatile. The global economy came to a screeching halt and recessions are forecast.  As a result of these and other factors, many deals that were humming along nicely are now facing significant and unanticipated challenges. For example:

  • In many cases, neither the vendor nor the customer community is “in the office.” While it is not uncommon for software developers to work remotely, many important aspects of a complex implementation – e.g., hardware installation, software testing and user training – are most effective when done on site. Obviously, given the work-from-home and no-travel environment that we are in, this is not possible.
  • Key individuals from both the vendor and customer community may be less available, either due to their own illnesses or due to pressing family issues or other concerns related to the pandemic.
  • Some customers may experience significant and unanticipated financial distress, and as a result, the payment obligations associated with the initiative may become particularly burdensome for them. Vendors may also be facing similar financial distress.
  • Due to the downturn in the business climate resulting from the pandemic, the business volume assumptions on which the ongoing initiative was based may no longer be realistic.

This blog post is intended to suggest a practical approach that both technology vendors and their customers might take to find amicable solutions to challenged deals.…