CoStar Reality Information Inc., a national commercial real estate information services provider, granted a license for its databases to Copier Country. Under the license, two identified authorized users were given access. The database contained information about New York City’s real estate market. The license prohibited Copier from: (a) providing third parties with access to or use of the CoStar database service; (b) sub-licensing or reselling CoStar’s information services to others; (c) sharing the Copier-specific ID and password; and (d) storing, copying, or exporting any portion of the licensed CoStar database service into any database or other software program, except as permitted by the CoStar-Resource License Agreement or by express written consent of CoStar. Notwithstanding these terms, Copier allegedly gave the access information of its two identified users to a third party, Dunman Realty, which third party used the information to access the database. CoStar brought suit, arguing that Copier had breached the license, and that Dunman had breached CoStar’s terms of use by using CoStar’s products without authorization. The court rejected Copier and Dunman’s motion to dismiss for lack of jurisdiction. The court found that both Copier (expressly) and Dunman (implicitly) consented to a forum selection clauses included in both the license agreement and the database’s Terms of Use.

TIP: In addition to having clear license agreements in place to protect databases or products you might license to authorized users, consider also having online terms that can be used to bind non-authorized users who may gain access through nefarious means.