March 14, 2007
Can A Spider Enter Into A Binding Contract?--Internet Archive v. Shell
By John Ottaviani
Can a spider enter into a binding contract when the terms and conditions on the website declare that copying or distributing anything on the site indicates an agreement to or acceptance of terms, and the spider copies the website content? Does the result depend on whether or not the terms have been viewed by a “live” individual?
In Internet Archive v. Shell, No. 06-cv-01726-LTB-CBS (D.Col. 2/13/2007), the Colorado federal district court decided that more facts were needed and refused to dismiss the breach of contract claim for failure to state a cause of action. Whether or not the claim will survive a summary judgment motion remains to be seen.
The case involved the Internet Archive’s “Wayback Machine,” which systematically browses the Internet, reproducing content from websites and placing it in a searchable Internet Archive. The Wayback Machine does not actively seek the permission of website owners prior to reproducing website content. However, the Internet Archive’s website explains how website owners can remove material from the Archive and prevent it from being copied. According to the decision, Internet Archive also removes material on request from website owners.
Shell owns a website devoted to providing information, services and other advocacy on behalf of individuals accused of child abuse or neglect. Her website contains a copyright notice, stating that:
“IF YOU COPY OR DISTRIBUTE ANYTHING ON THIS SITE—YOU ARE ENTERING INTO A CONTRACT. READ THE CONTRACT BEFORE YOU COPY OR DISTRIBUTE. YOUR ACT OF COPYING AND/OR DISTRIBUTING OBJECTIVELY AND EXPRESSLY INDICATES YOUR AGREEMENT TO AN ACCEPTANCE OF THE FOLLOWING TERMS:”
These terms include charging the user $5,000 for each individual page copied, granting Shell a perfected security interest of $250,000 “per each occurrence of unauthorized use” of the website in all of the user’s assets and personal property, a charge of $50,000 for each occurrence of failure to prepay for use of the website, “plus costs and triple damages,” as well as provisions waiving various defenses.
According to the decision, the copyright notice was accessible through an icon located on Shell’s website. According to Internet Archive, the notice did not pop up as a separate screen that the user must “click through” in order to access web material and did not require users to agree to these terms before accessing material. The record was not clear on what statement actually appeared on Shell’s home page, precisely where the copyright statement was located on the Website, nor on how the user was informed of the existence of terms of the copyright notice.
After Ms. Shell unsuccessfully demanded payment of $100,000 from Internet Archive for copying her website, Internet Archive filed its action seeking a determination that it did not violate Shell’s copyrights. Shell filed counterclaims against the Internet Archive for copyright infringement, conversion, civil theft, breach of contract, and racketeering under the federal and Colorado racketeering statutes.
A few thoughts about this decision:
· The Court properly dismissed the state law conversion and civil theft claims for failing to state a claim. Dismissing the conversion claim, the court analogized to cases where it was held that the possession of copies of documents, as opposed to documents themselves, does not amount to an interference with the owner’s properties sufficient to constitute conversion. There is no reason the rule should be different in Cyberspace.
· The Court properly refused to dismiss the contract claim because it did not have all of the facts in front of it. There were contradictory statements as to the location of various notices of the terms.
· Several colleagues and I wrote a paper a few years ago entitled “Browse-Wrap Agreements: Validity of Implied Assent in Electronic Form Agreements” (59 Business Lawyer, 279 (2003)), in which we set forth a four-part test for courts to use in determining whether a user has validly assented to the terms of a browse-wrap Agreement: (1) the user is provided with adequate notice of the existence of the proposed terms; (2) the user has a meaningful opportunity to review the terms; (3) the User is provided with adequate notice that the taking of a specified action manifests assent to the terms; and (4) the user takes the action specified in the notice. While the Colorado court did not cite our article or explicitly use our test, maybe it will do so if it is required to address a summary judgment motion.
o It appears that, in this case, there is adequate notice that taking an action manifests assent to the terms, and the user (or the spider) took the action specified. The notice seemed to be adequate to put a reader on notice that an act of copying or distributing indicates agreement and acceptance to the terms.
o The bigger problem seems to be whether there was “an adequate notice of the existence of the terms” and a “meaningful opportunity to review” the terms. What constitutes adequate notice of the existence of terms should be judged both in terms of the physical presentation of the notice and the content of the notice. According to the court, the record does not disclose this in insufficient detail. The parties will need to develop a more detailed record.
· Another interesting aspect of this case is Internet Archive’s attempts to have the conversion and civil theft and breach of contract claims dismissed as being pre-empted by the federal Copyright Act. The court properly found that the conversion, breach of contract claim and civil theft claim are not pre-empted, as each contains an “extra element” which makes the claim qualitatively different from, not subsumed within, a copyright infringement claim.
· What about capacity? The Uniform Electronic Transactions Act (UETA) validates contracts formed by electronic agents. The Internet Archive made the argument that Shell’s breach of contract argument failed because no human being at Internet Archive was ever aware that the agreement existed. The court sidestepped the issue, holding that the complaint was sufficient to put Internet Archive on notice of the claim, and that more facts were needed before the motion to dismiss could be resolved. If it comes up again, section 14 of UETA should defeat Internet Archive’s argument. Section 14 provides that “[a] contract may be formed by the interaction of electronic agents of the parties, even if no individual was aware of or reviewed the electronic agent’s actions or the resulting terms and agreements.” Clearly, this section negates any claim that lack of human intent, at the time of contract formation, prevents contract formation. The lack of human interaction may still be relevant to the issue of whether the terms have been adequately presented, but should not bar contract formation.
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