Those rarely-read “Terms and Conditions” on websites can have real teeth. In a case suggesting that posters beware, a District of Massachusetts court recently concluded that a website’s Terms and Conditions caused ownership of the copyrights in a user’s posts to transfer to the website’s operator, despite no evidence that the user actually read and accepted the Terms and Conditions.
Small Justice LLC, Richard A. Goren, and Christian DuPont sued Xcentric Ventures LLC, the operator of RipoffReport.com, for declaratory judgment of copyright ownership and copyright infringement, along with state law claims. The copyright dispute centered on whether Xcentric infringed the copyright in DuPont’s posts on RipoffReport.com by refusing to remove the posts from the website. Xcentric moved for summary judgment, arguing it was the owner of the copyrights because DuPont granted Xcentric exclusive licenses to the copyrights, as provided in RipoffReport.com’s Terms and Conditions. The Court agreed, concluding RipoffReport.com’s Terms and Conditions transferred owner ship of the copyrights to Xcentric, and entered summary judgment on the copyright claims.
The Court began by considering whether RipoffReport.com’s Terms and Conditions were “clickwrap” or “browsewrap.” In a clickwrap agreement, users must select a check box or radio button to affirmatively indicate that they agree to the website’s terms and conditions. Clickwrap agreements are generally upheld because they require affirmative action on the part of the user, according to the Court. In contrast, a browsewrap agreement does not require an affirmative click by the user; instead, a user agrees by using the website. Because no affirmative step by the user is required, the Court noted, the validity of a browsewrap agreement depends on whether the user has actual or constructive notice of a website’s terms and conditions.
Looking at the RipoffReport.com site, the Court found its Terms and Conditions constitute a browsewrap agreement. The undisputed facts showed RipoffReport.com displays a screen saying “Submit your Report” and “File a Report” with a box titled “Terms and Conditions” containing the Terms and Conditions. According to the Court, one of the terms, which a user must scroll down to see, provides that by posting the user grants to Xcentric “an irrevocable, perpetual, fully paid, worldwide exclusive license to use, copy, perform, display and distribute [the post’s contents].” “By posting this report/rebuttal, I attest this report is valid. I am giving Rip-Off Report irrevocable rights to post it on the website. . . ” appears under the Terms and Conditions box with a check box. To post, a user must check the check box and click a “continue” button. While Xcentric argued this was a clickwrap agreement, the Court disagreed. The Court pointed out that the text next to the check box did not say that checking the box indicates agreement with the Terms and Conditions. Rather, by checking the box, the user agrees only to the terms accompanying the checkbox, according to the Court. Having found a browsewrap agreement, the Court next considered whether the agreement is valid against DuPont.
According to the court, for DuPont to be bound by the Terms and Conditions he must have had actual or constructive notice. While there was no evidence DuPont had actual notice of the Terms and Conditions, the Court did find DuPont had constructive notice. The Court concluded that RipoffReport.com’s showing a portion of the terms in the center of the screen, above the “continue” button that the users clicked before posting, put DuPont on inquiry notice to investigate the Terms and Conditions. As a result, the Court concluded DuPont was bound by RipoffReport.com’s Terms and Conditions and had transferred copyright ownership to Xcentric. As the Court determined Xcentric owned the copyrights, it entered judgment in favor of Xcentric on the copyright infringement and ownership claims.
This case illustrates two important points. First, when adequate notice is given to users, websites’ terms of service can be enforceable against users that have not read them. And second, from the user’s perspective, it might be worthwhile to take the time to understand exactly what you are giving away when you hit “submit.”
The case is Small Justice LLC, et.al. v. Xcentric Ventures LLC, No. 1:13-cv-11701-DJC (D.Mass.), before Judge Denise Casper. A copy of the order can be found here.