Contributory Infringement

Inducement to Infringe. The court says it’s not inducement when “Plaintiff merely alleges that Defendant knowingly allowed listings of infringing TJ Karaoke devices to remain active on its website despite having the ability to remove the listings….Nor has Plaintiff alleged facts giving rise to an inference that the ‘principal object’ of Defendant’s online marketplace is the sale of infringing products. [cite to Grokster]”

Tailored to Infringement. The plaintiff did not allege that “Defendant’s service is incapable of substantial or commercially significant noninfringing uses….allegations that a service provider merely had ‘knowledge that a service will be used to infringe’ or ‘fail[ed] to take affirmative steps to prevent infringement’ are insufficient to state a claim for contributory infringement liability.” Given eBay’s scope, I don’t see how a plaintiff could allege that eBay is “incapable of substantial or commercially significant noninfringing uses.”

Vicarious Infringement

Citing Milo & Gabby, the court says the “mere fact that Defendant had the ability to remove listings of infringing devices is not enough to establish that Defendant had both the legal right and the practical ability to stop the third-party sellers’ infringing conduct.” The court doesn’t discuss the direct financial interest prong, which poses a heightened challenge to eBay due to its commission structure.

Did Cox Make a Difference?

The Supreme Court’s Cox v. Sony decision didn’t address vicarious copyright infringement, so that part of the ruling wasn’t affected by the Cox case.

This court did apply the revised Cox standards for contributory copyright infringement, and the application of those factors makes this an even easier case. Lee made knowledge-based allegations, but–as the Cox court seemingly intended–Lee could not spin those allegations to satisfy an intent-based standard. It makes quick work for a defendant like eBay who has taken many steps to reduce copyright infringement.

(It remains to be seen if courts will (1) bend the standards in Cox to distill evidence of intent from knowledge-based allegations, or (2) bend the standards of direct or vicarious infringement to gapfill the narrowed contributory infringement standard. Fortunately, this court did neither. However, it was also a pro se case, not a full-scale assault to degrade the Cox standards that rightsowners will launch eventually).

However, I don’t think Lee’s claims would have gotten far with the pre-Cox jurisprudence either. Courts have routinely rejected staydown demands from plaintiffs. Also, eBay’s honoring of the NOCIs means that it would have likely qualified for the 512(c) safe harbor too. Still, those defenses might not have worked until summary judgment, at significant defense costs, while the Cox precedent easily and decisively ends this case on a motion to dismiss.

Case Citation: Lee v. SBS Corp., 2:26-cv-03144-MCS-E (C.D. Cal. July 9, 2026)

The post eBay Defeats Contributory Copyright Claim–Lee v. SBS appeared first on Technology & Marketing Law Blog.

Coomer v. Lindell, 2026 WL 817370 (D. Colo. March 25, 2026)

Related post. This is more fallout from the efforts to deny the 2020 presidential election results. MyPillows huckster Lindell publicly trashed Dominion Voting and and its president, Coomer. A jury held Lindell and Frankspeech liable for defamation and more. The defendants unsuccessfully tried to overturn the jury verdict post-trial.

Frankspeech invoked Section 230 for its liability for Lindell’s speech. The court disagrees:

Mr. Lindell founded Frankspeech. He regularly acted as its corporate representative, including at trial. He hosted his own show on Frankspeech, broadcasted it through Frankspeech, and used the Frankspeech platform to make and publish statements about Dr. Coomer. There is no evidence that anyone other than Mr. Lindell exercised any meaningful degree of control over the Frankspeech entity. By all accounts, Frankspeech was Mr. Lindell’s corporate alter ego in this context….for § 230 purposes, Frankspeech’s defamatory statements through its agent would plainly qualify as participation in the development of those statements.

Frankspeech also claimed Section 230 for Clement’s remarks at a conference. The court responds: “Frankspeech—through Mr. Lindell and others—sponsored, promoted, and broadcasted the event….a reasonable jury could conclude that Frankspeech’s conduct (including its conduct through Mr. Lindell) created actual or apparent authority for Mr. Clements and other presenters at the Cyber Symposium to act as agents of Frankspeech.”

Murphy v. LinkedIn Corp., 2026 WL 881710 (N.D. Cal. March 30, 2026)

Fraudsters approached Murphy via LinkedIn direct messages. The conversation switched over to WhatsApp, where the fraudsters effectuated their fraud. Murphy’s lawsuit against LinkedIn fails due to Section 230:

Plaintiffs’ claims for negligence, gross negligence, and product liability are premised on a purported duty to “monitor” users, “restrict the accounts of fraudulent actors,” and to suppress “fraudulent activities” by users of LinkedIn’s platform. These claims “necessarily implicate” LinkedIn’s role as a publisher of third-party content because “discharging the alleged duty would require [LinkedIn] to monitor third-party content and prevent” communications between fraudsters and legitimate LinkedIn users. Nor can Plaintiffs sue LinkedIn for breaching a “duty to warn.” LinkedIn’s “role as a publisher of third-party content does not give it a duty to warn users of ‘a general possibility of harm’ resulting from” using LinkedIn’s services.

The plaintiffs unsuccessfully tried the defective design workaround:

Plaintiffs argue that their claims are not based on LinkedIn’s role as publisher, but rather its role “as a product manufacturer and developer of defective algorithms” that facilitated communications between fraudsters and Plaintiffs. But the Ninth Circuit has repeatedly upheld dismissal of negligence and product liability claims framed in the same way. [cites to Doe v. Grindr and Dyroff]

A Roommates.com workaround didn’t work either:

Plaintiffs’ claims are premised on LinkedIn’s neutral tools for connecting users, not on content that LinkedIn created or required users to provide as a condition of using its services. Indeed, LinkedIn expressly informs users that they “have choices about the information” on their profiles, and that users “don’t have to post or upload personal data” that may make them targets of fraud.

To put a finer point on it, if the plaintiffs are complaining about LinkedIn direct messages, then those messages may be covered by the ECPA just like email, and LinkedIn may have had limited legal rights to monitor the conversations at all.

Finally, the plaintiffs tried a TOS-based workaround, poured into consumer protection laws. The court acknowledges that some breach of contract claims may not be preempted by Section 230, but

These claims are premised on the same duties discussed above – duties to monitor, to design products in a different manner, and to warn – that fundamentally seek to hold LinkedIn liable for content created by the fraudsters. Styling these claims as different legal theories does not remove them from Section 230’s scope….

Plaintiffs seek to hold LinkedIn liable solely based on its general monitoring policy and aspirations to remove fraudulent users from its platform. Moreover, LinkedIn expressly disclaims liability by notifying users that they “may encounter content or information that might be inaccurate, incomplete, delayed, misleading, illegal, offensive, or otherwise harmful,” and that LinkedIn “generally does not review content provided by [its] Members or others.”

McNeal v. Calvin, 2026 WL 879228 (E.D. Mo. March 31, 2026)

This case relates to the TV show Love & Marriage: Huntsville, shown on OWN (Oprah’s channel). The plaintiff, a lawyer (naturally), is one of the women featured in the show. She is upset about online comments about the show and sued many defendants pro se. The court says “Section 230 of the Communication Decency Act bars Plaintiff’s claims against YouTube, Google, and Tik Tok.” In particular, “The content uploaded by users cannot be attributed to internet service providers based on the theory that users are “agents” of the websites they use.”

Shiva Ayyadurai v. U.S., 2026 WL 879409 (D.C.D.C. March 31, 2026). My prior blog post about a different litigation of his.

This is a jawboning case:

Ayyadurai’s 75-page Complaint alleges that various Massachusetts state officials—none of whom are named as Defendants in this case—federal officials at the Cybersecurity Infrastructure Security Agency (“CISA”), and other government officials unknown to him have coordinated with private companies to regulate and censor his speech by “deplatforming” or “shadowbanning” him—that is, suspending his social media accounts or limiting the reach of his posts. Ayyadurai alleges that the Defendants took these actions in retaliation for posts in which he “articulat[ed] a government employee’s role in destroying the digital ballot images used to tabulate votes” in a prior election.

With respect to the liability of the social media defendants who allegedly got jawboned, the court accepts the 230(c)(2)(A) defense:

Ayyadurai’s Complaint fails to state a claim against the Social Media Defendants based on their content-moderation decisions because he does not plausibly allege that any of those decisions were made in the absence of “good faith” or that they were made for a purpose other than removing content that they “consider[ ] to be … objectionable.”…

conclusory allegations of bad faith are insufficient to state a claim against a platform based on activity within the reach of Section 230(c)(2).

At the same time, the court struggled with applying to Section 230(c)(1) to the removal decisions. Incredibly, it says:

only a few of the decisions restating this broad dictum [from Zeran] have grappled with its implications when the challenged conduct is a platform’s decision to remove objectionable content—such as a plaintiff’s own posts—rather than a decision to leave other objectionable content in place. Extending immunity under Section 230(c)(1) to cover direct challenges to the removal of user content is an uneasy fit with the language of the provision, which says only that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” A broad reading of Section 230(c)(1) that immunizes all content-removal decisions also risks “swallo[wing] the more specific immunity in (c)(2),” which applies only to content-moderation decisions that are made in “good faith.”

Not this shit again. I have repeatedly explained how Section 230(c)(2) can apply to first-party filtering decisions, which leaves room for Section 230(c)(1) to protect against liability for third-party content. There are DOZENS of cases applying Section 230(c)(1) to removal decisions, so for the court to think that it’s spotted something that all of those other courts have missed is laughable…and completely gratuitous…and ultimately inconsequential given that the court still tosses the case.

The court tries to justify its reluctance on Section 230(c)(1):

There is little reason to strain the reach of the immunity in Section 230(c)(1) when, as in this case, the immunity in Section 230(c)(2) leads to the same result.

NOOOO. There are several excellent reasons to apply both 230(c)(1) and 230(c)(2):

(1) 230(c)(1) doesn’t have a good faith prerequisite, which has mucked up 230(c)(2) jurisprudence and made 12(b)(6) dismissals much more difficult to obtain, jacking up the litigation costs for both sides and giving false hope to bogus claims. Indeed, because the court dismissed this case without prejudice, I’m sure an amended complaint will try again to manufacture bad faith sufficient to kick the case into very expensive discovery;

(2) removal and leave-up decisions are two sides of the same decision, i.e., every editorial decision about an item of third-party content is either a leave-up or removal decision, so they cannot be separated; and

(3) the statute and 25+ years of caselaw have established the principle that 230(c)(1) applies to removal decisions.

Sigh. In the end, this case ends up the same as all of the other content removal and account termination cases–dismissed.

Gaughan v. Barounis, 2025 N.Y. Misc. LEXIS 17243 (N.Y. Supreme Ct. December 18, 2025) 

The Complaint alleges that the impersonating profile and pictures of plaintiff were posted by defendants Barounis and Viera. Plaintiff’s contention that the XVideo defendants are liable for refusing or failing to remove offending material prepared by a third party, or that they may be held responsible for allegedly defamatory postings made by third parties does not state a viable basis for liability. Nowhere in the Complaint does plaintiff allege that the XVideo defendants posted or created the impersonating profile themselves, altered or edited its contents, or encouraged, required, or otherwise induced defendants Barounis and/or Viera, or any other user, to create the profile or upload unlawful content. To the contrary, plaintiff even alleges in her Complaint that Barounis and Viera allegedly making this impersonating profile goes against XVideo.com’s Terms and Agreements.

The Court also finds plaintiff’s argument that the XVideo defendants should be responsible for her alleged stolen identity, and that Section 230 does not apply in cases, unavailing.

It has also been held that “Sections 50 and 51 of the New York Civil Right Law sounds in privacy, not intellectual property, and thus does not fall within the intellectual property exceptions in Section 230.”

Equally, plaintiff’s contention that this immunity is lost because the XVideo defendants allowed the dissemination of plaintiff’s personal information and allowed discriminatory content (age, sex, sexual orientation, ethnicity, etc.) is unsuccessful.

Arana v. Molta, 2026 WL 1166348 (D. Mass. March 24, 2026)

Mr. Molta drafted the description of, and provided the photos for, the Dennis Property posted to WNAV’s website. WNAV did not review, revise, edit, or provide feedback on the Dennis Property listing that the Moltas posted to the WNAV website.WNAV is thus immune from liability for any of the statements or representations made by the Moltas in the Dennis Property listing.

Greer v. Moon, 2026 WL 1170015 (D. Utah. Feb. 11, 2026)

Mr. Greer’s only claims against Defendants are for contributory copyright infringement under federal law. Because those claims clearly “pertain[ ] to intellectual property,” they cannot be barred by section 230. Defendants’ argument concerning section 230 immunity fails.

Tufano v. Google LLC, 2026 U.S. Dist. LEXIS 100789 (N.D. Cal. May 6, 2026)

“Plaintiff premises his claims on Google allegedly “filter[ing] out all negative reviews” of Dr. Taban, including Plaintiff’s negative review, which Google allegedly removed.” The court dismisses per Section 230: “First, Google’s review service is an interactive computer service. Second, Google publishes the reviews on which Plaintiff bases his claims. Third, third parties, and not Google itself, provide the reviews published by Google.” The plaintiff said Google didn’t act in good faith, but Google relied on 230(c)(1) where good faith is irrelevant, and the plaintiff didn’t provide any evidence of bad faith.

Starship LLC v. Shein Distribution Co., 2026 WL 1455009 (C.D. Cal. March 20, 2026)

This is a fast fashion enforcement lawsuit that includes both copyright and trademark claims. The direct infringement claims largely fail because Shein operates as a marketplace for online vendors. The contributory infringement claims failed because the plaintiff wanted a staydown in response to takedown notices. The vicarious infringement claims also fail.

Shein defended against the unfair competition claim based on Section 230. The court says:

Plaintiff characterizes Shein as an information content provider because it “regularly markets and sells goods” and “is involved in almost all aspects of the marketplace’s distribution chain.” These conclusory assertions do not plausibly allege that Defendants are content providers. Plaintiff provides no factual basis to infer that Defendants materially contributed to the alleged infringement.

King v. Jilin Province Detiannuo Safety Tech. Co. Ltd., 2026 Fla. Cir. LEXIS 295 (Fla. Cir. Ct. Feb. 17, 2026)

Plaintiff does not allege that eBay participated in the creation or development of Seller’s listing or allege that eBay played some role in handling or transmitting the airbag components. Plaintiff only alleges that eBay should have removed Seller’s listing and/or issued some censure to Seller for its alleged noncompliant listing….

The only way eBay allegedly could have prevented the harm was by reviewing the third-party listing, determining whether it complied with internal policies, and removing it. That conduct, i.e., deciding whether to publish or remove third-party content, is a paradigmatic editorial function protected by the CDA.

In re Apple Inc. App Store Simulated Casino-Style Games Litigation, 2026 WL 1552391 (N.D. Cal. June 1, 2026)

The Court finds Defendants’ argument that Section 230 provides immunity from suit unavailing. Defendants point to the clause in Section 230 that states that “no cause of action may be brought” that is contrary to the statute. 47 U.S.C. § 230(e)(3). But the Tenth Circuit has held that Section 230 “provides immunity only from liability, not suit.” And the Ninth Circuit case Defendants themselves cite clearly states that Section 230 is designed “to protect websites against the evil of liability for failure to remove offensive content”; that case does not mention protection from suit. Thus, the Court concludes that Section 230 does not protect Defendants from suit.

Accardi v. CSC Holdings, LLC, 2024 N.Y. Misc. LEXIS 83186 (N.Y. Supreme Ct. November 26, 2024)

The plaintiffs claim that defendants failing to follow their terms of service makes them liable to the plaintiffs, effectively negating the immunity provided by the Communications Decency Act. After a review of the papers submitted by the defendants and the plaintiffs, the Court finds that the immunity provided by Section 230 does apply to the defendants in this action and the plaintiffs have not proffered any compelling argument or evidence to negate this immunity. As such, the defendants motion to dismiss the third cause of action pertaining to the failure to remove posts on social media is granted.

Life Mastery Network LLC v. Haygarth, 2026 WL 1622887 (D. Haw. May 22, 2026)

Paula indisputably enjoys immunity under the CDA for reposting content. Many courts have included private individuals within the scope of a “user.” Thus, (1) Paula is a “user of an interactive computer service”; (2) the subreddit link is “based on information provided by another information content provider”; and (3) Plaintiffs’ claim would treat Paula “as the publisher or speaker of that information.” As such, and as Plaintiffs have conceded at the Hearing, Paula is immune from lawsuit for what she reposted from Reddit.

But because the CDA does not immunize someone who posts original content, it makes sense that adding comments to something that is re-posted would not trigger CDA immunity. While these cited cases are not directly on point, the Court concludes that Paula’s comments regarding what she reposted are not subject to CDA immunity.

Glazer v. Meta Platforms, Inc., 1:25-cv-01849-GLR (D. Md. June 12, 2026)

The Court agrees with Meta that Section 230 bars Plaintiffs’ claims….All three elements are satisfied here: Meta is an interactive services provider; Plaintiffs’ claims treat Meta as the publisher or speaker of information under Section 230 because they “seek ‘to hold [Meta] liable for . . . deciding whether to publish, withdraw, postpone or alter content’ provided by third parties”; and the content at issue here is that of third parties, and Plaintiffs “seek[] to hold Meta liable, not for providing that content, but for allowing third parties to do so.”

Related ruling.

Sidoli v. YouTube LLC. 2025 U.S. Dist. LEXIS 210953 (N.D. Cal. Sept. 2, 2025)

Plaintiff also seeks to treat YouTube as a publisher because she alleges that YouTube wrongfully demonetized, restricted, and removed her videos. Such conduct falls within a publisher’s traditional functions….

YouTube cited authority that which stand for the proposition that Section 230 immunizes internet service providers from suit for termination of a plaintiff’s entire channel as well as the content that the plaintiff posts on that channel. Such authority is persuasive. Thus, any claim Plaintiff brings which seeks to challenge YouTube’s decision to remove Plaintiff’s YouTube channel is also barred by Section 230.

Also, “Plaintiff’s constitutional claims cannot proceed as YouTube is a private forum, not a state actor.”

See also Sidoli v. YouTube LLC, 2026 WL 1480407 (S.D.N.Y. May 27, 2026), upholding YouTube’s TOS and forum selection clause: “Defendants provide evidence, which Plaintiff does not dispute, showing that she agreed to abide by the terms of service by clicking the “Create Channel” button when she started her YouTube page on June 21, 2021.”

Kennedy v. Vickery, 2025 Me. Super. LEXIS 108 (Me. Superior Ct. Sept. 10, 2025)

RFK Jr. lost a defamation lawsuit. As for Section 230:

Defendant posted on X, without comment, a link to an article, authored by thegrio.com, titled “Anti-vaxxer Robert F. Kennedy Jr. is harming black people—and his family legacy—with his vaccine misinformation campaign.”…

Under the Communications Decency Act, internet service users are not liable for repeating, without embellishment, third party content….

Exhibit A to the Amended Complaint supports Defendant’s assertion that he posted the third-party content without embellishment. Plaintiff denies Defendant posted the link without embellishment, but cites no admissible record evidence to support the denial. Thus, under the Communications Decency Act, Defendant is not liable to Plaintiff for this post.

Awoye v. Jones, 2026 WL 1847088 (D.N.J. June 26, 2026)

In Instagram posts, Jones claims that Awoye scammed her. Awoye sued her and brought Meta along for the ride, claiming it had violated his publicity rights. There isn’t any publicity rights violation here:

The core of Plaintiff’s allegations is that Jones spread allegedly false information about Plaintiff on Instagram. Jones was not selling a product or otherwise soliciting money from her followers. As such, neither was Instagram. Jones’ posts were the “dissemination of news or information” and not made for a commercial purpose.”

Norton v. Meta Platform, Inc., 2026 WL 1963120 (N.D. Cal. July 7, 2026)

In posts on Facebook, several third parties accused Norton of criminal activity and shared intimate images of him….

“Meta is an interactive computer service provider.” Second, Norton alleges that third parties, not Meta, created the Facebook posts at issue; the third parties, not Meta, are the “information content provider[s].” Third, each of Norton’s claims seek to treat Meta as a “publisher” of third-party content. “A claim that obliges the defendant to monitor thirdparty content to avoid liability … treats the defendant as a publisher.”

Norton argued “but the algorithms.” Citing Ligon, the court says the algorithms matter only if the algorithm creates content. Citing Roommates.com, the court adds: “Norton doesn’t allege that Meta required its third-party users to create or post any of the content at issue.”

Moore v. LogSat Software LLC, 2022 WL 23074273 (S.D. Ind. Sept. 29, 2022)

John Moore has never been accused of, arrested for, or convicted of any sex-related offense; yet, his name, picture, address, and other identifying information appear on LogSat Software LLC’s app, called “Sex Offenders Search”….

Mr. Moore was convicted in Indiana of voluntary manslaughter. Thus, he was required to register on a violent crime registry in Indiana. The violent offender and sex offender registries are the same in Indiana—in other words there are not two separate lists. Mr. Moore testified that he believed that there was no national violent offender registry, just a national sex offender registry and that he is on that because the Indiana Registry is reported to the National registry….

the alleged defamatory statement at issue is that Mr. Moore’s name, picture, address, and other identifying information appear on app called “Sex Offenders Search,” because he is not a sex offender and has never been accused of, arrested for, or convicted of any sex-related crimes. Mr. Moore does not allege that he was wrongfully included in the data set that LogSat purchased from FWD, or, for that matter, that he was wrongfully included on Indiana or the National registries.

The post Large Roundup of Section 230 Rulings appeared first on Technology & Marketing Law Blog.

Emojico started with the standard SAD Scheme argument that all of the defendants are counterfeiters, which necessarily proves they are infringers, res ipsa loquitor. The court doesn’t accept this simplistic syllogism:

Plaintiff has failed to show that the marks used by Defendants are similar; indeed, many of the marks are so dissimilar that the Court lacks the confidence required for the extraordinary remedy of a temporary restraining order that a factfinder would find in Plaintiff’s favor…

the goods appear to be far from identical. For example, Defendant 2 sells a shower curtain with a lifelike image of man screaming. It is difficult to imagine how any consumer would be confused that the source of this product is Plaintiff, whose products use highly stylized, cartoon-like images of disembodied smiley faces.

I would show you the shower curtain image that unimpressed the court, but it remains sealed. Not only that, but the court grants Emojico’s sealing request: “While the Court denies the motion for a temporary restraining order, the Court understands that public disclosure of the information filed under seal would, at this time, ’cause significant competitive harm’ to Plaintiff.” Ahem…more clarity please. Who are Emojico’s competitors, and how would they be helped by unsealing? In the interim, the rest of us can’t see or evaluate the basis of the court’s determination about mark dissimilarity.

In addition to the shower curtain example, the court enumerates other examples of defendants who probably aren’t infringing either (all from the still-sealed exhibit):

Defendant 4, selling a bathmat featuring illustrated jack-o-lanterns and smiling ghosts; Defendant 7, selling an abstract “glitch art poster” with no discernable faces whatsoever; Defendant 10, selling a pair of purple earbuds; Defendant 11, selling a digital alarm clock and nightlight roughly resembling a robot; Defendant 14, selling an alarm clock stylized as a television with antenna; Defendant 15, selling a shower curtain featuring an lifelike illustrated wolf; Defendant 17, selling a karaoke machine with cat ears; Defendant 18, selling a cinema light box with removable letters and symbols; and Defendant 19, selling an LED pixelated table lamp

Emojico’s trademark registrations cover a mind-boggling range of product classes, from ship hulls to penis enlargers, so it tracks that they think they could simultaneously be the source of shower curtains, earbuds, and karaoke machines with cat ears.

Emojico tried to salvage its case by invoking state trademark law, but it didn’t actually provide any independent support for the state law claim. I am not aware of a SAD Scheme case where state IP rights have been the only basis of a successful enforcement. If you’ve seen one of those, let me know.

The court notes that maybe some defendants are actually infringers, but it questions joinder: “Plaintiff has not convinced the Court that there are common issues of fact among all Defendants.” The court isn’t willing to sever those defendants either.

The court also chastizes Emojico’s prolixity: “Plaintiff’s memorandum of law in support of its motion for temporary restraining order exceed the Court’s page limits by 33 pages, and the Court is unlikely to grant such a motion in the future if requests are similarly unreasonable.”

As usual, GIFs like this come to mind when a plaintiff loses an unopposed motion this badly:

Then again, I hope the TRO denial is only the first of many adverse consequences that Emojico suffers for bringing this lawsuit.

Case Citation: emoji company GmbH v. The Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associations Identified on Schedule A, 2026 WL 1865118 (S.D.N.Y. June 29, 2026)

BONUS: Souper Products LLC v. Schedule A Defendants, 2026 WL 1910449 (S.D.N.Y. July 2, 2026). Same judge, same (sad) litigation scheme, different plaintiff lawyers (Boies Schiller, a purportedly elite firm), same TRO denial using a lot of identical language as the Emojico opinion. Looks like the judge can copy opinion language just like SAD Scheme plaintiffs can robo-copy their filings LOL.

With respect to the design patent claims, “Plaintiff’s design patent claims fail to identify with any specificity which products from which defendants infringe on which design patent. There is no side-by-side analysis that would allow the Court to determine infringement on a product-by-product basis.”

The judge still has concerns about joinder: “Plaintiff has not convinced the Court that there are common issues of fact among all Defendants given the vast differences in the shapes, sizes, and styles of ice trays at issue.”

The judge also objected to the filing length, which was 17 pages over-limit (compared to Emojico’s 33 pages).

The post Court Rebuffs Emojico’s SAD Scheme TRO Request appeared first on Technology & Marketing Law Blog.

The first two rulings came in March. In the Bouck case, the court rejected Facebook’s Section 230 defense because Facebook’s generative AI allegedly contributed to the ad copy. In the Suddeth case, the court accepted Facebook’s Section 230 defense because the plaintiffs focused on algorithmic amplification.

Although the Bouck case initially overcame Section 230, in an under-the-radar ruling this week, the court nevertheless dismissed it as preempted by federal securities law. So the Bouck plaintiffs got a first-hand taste of the infamous Ninth Circuit switcheroo, which occurs when the plaintiffs get false hope that they might actually win because they got around Section 230, only to slam into other brick walls in their prima facie case.

The March Bouck Ruling

Section 230

Meta’s Section 230 defense turns on whether it was a co-creator of the ads sufficient to become an “information content provider.” The court says “What it means to “create” or “develop” content on the internet is not self-evident.” The court says there’s a fact dispute over whether Facebook’s contributions were material:

The alleged illegality stems from the advertisements’ content—i.e., the false statements made to Facebook and Instagram users that induced them to click on the ads. Plaintiffs have averred that Meta participated in the construction of the ads by literally generating, using artificial intelligence, the images and text in the advertisements. That degree of participation is not protected by section 230…. [cite to Forrest v. Meta]

The district court in Forrest accepted that optimizing the appearance of an ad to drive engagement was enough of a contribution to the ads’ illegality to preclude section 230 immunity. Here, in addition to averring facts which, if proven, would establish that Meta altered the ads’ appearance to maximize impressions, Plaintiffs have averred that Meta’s tools allowed the scammers to produce “AI-generated text and images” for use in the ads through its Advantage+ Creative tool.

The court says Carafano doesn’t help Facebook because:

Plaintiffs have averred that Meta created the offending information by generating some of the false statements that tricked them into the investment scheme….

Plaintiffs aver that the scammers used Meta’s Advantage+ Creative tool which, as explained, uses artificial intelligence to enhance whatever message the user inputs. If a user, for example, tells the tool that he is interested in an ad promising astronomical weekly investment returns, Advantage+ Creative will spin up a slew of ads that include the provided language and other language, images, and videos it decides will be effective in promoting the user’s chosen message….

Without question, Advantage+ Creative and the other tools in Meta’s advertising suite would not have come up with that language without the inspiration from the scammers, but that language is still the creation of Meta.

One way of reading this decision is that Section 230 has limited applicability to Generative AI outputs. If the model outputs something new (as opposed to verbatim replicating material in its index or provided by the user), then the newly created material isn’t covered by Section 230.

Aiding and Abetting Fraud

The court says Facebook’s ad review process should have detected that the ad looked scammy (see an example on the right): “Even a cursory look would warrant suspicion that the ad is fraudulent. Meta cannot, with a straight face, claim otherwise.” Facebook responded that the ad review was automated (i.e., no human performed the “cursory look” that the judge was contemplating), a response the judge calls “confounding” because “It was Meta’s decision to use technological review tools to screen ads, and it does not now get to claim it had no idea what was going on because it tasked some software program with doing the first pass.”

The judge is dabbling with some heady topics here in an unsatisfying and superficial way. At core, the judge–whether he intended to or not–is addressing the epistemological question of when a machine “knows” something. This is a crucial topic for the digital age, and it deserves more in-depth and thoughtful treatment than the judge provides here. Alternatively, the judge is accepting an argument that it’s “willful blindness” to turn over ad review to the machines. But nowadays machines do a lot of scanning and screening without humans in the loop, and it deserves some careful and thoughtful judicial review to determine if such delegation deserves to be condemned with a “willful blindness” style punishment. The judge didn’t do that either.

Contract Breach

The plaintiffs tried the oh-so-tired hack of claiming that TOS content policy restrictions should be treated as affirmative representations that the policies won’t be violated. Not this again. Sigh. The judge doesn’t take the bait (cite to Lloyd v. Facebook):

The provision of the ToS on which Plaintiffs rely does not expressly or impliedly impose a binding contractual obligation on Meta to do anything. It is much more naturally read as a creating a duty of its users not to pollute Meta’s platforms with scam investment ads….

To the extent the ToS even mentions Meta doing something to prevent fraud, it speaks only in aspirational terms…Meta, however, never promises to take concrete steps to effectuate that aspiration.

Negligence

“Plaintiffs have averred that Meta did more than just sit idle as fraudsters roamed freely on their platforms. Therefore, no “special relationship” need be pleaded for the case to move forward.”

Unruh Act

“Plaintiffs here aver that they were targeted because of their race or national origin, not that they were excluded from anything. Whatever moral condemnation that merits, it is not a violation of the Unruh Act.”

The court distinguishes Liapes because, in that case, the plaintiff complained she didn’t receive ads based on her protected classifications. Here, the plaintiffs got the ads: “Far from encountering an exclusionary practice, they encountered an inclusionary one—it is just that they wish they were not included.” The court rejects the plaintiffs’ attempt “to spin Liapes into a general prohibition on targeting based on protected characteristics.”

Case Citation: Bouck v. Meta Platforms, Inc., 2026 WL 810036 (N.D. Cal. March 24, 2026)

The March Suddeth Ruling

Because of its implications for Generative AI, the Bouck case has garnered some coverage. That coverage overshadowed a companion case, the Suddeth decision, issued by the same judge, on the same day, involving the same basic claim (Chinese stock pumping-and-dumping). Unlike the Bouck case, the judge dismissed the Suddeth case.

In Bouck, the plaintiffs claimed that Facebook helped the advertiser build and polish up the ads using Generative AI. In Suddeth, the plaintiffs claimed Facebook algorithmically amplified the ads. The court has little difficulty concluding that algorithmic amplification is governed by Section 230, citing Dyroff and Doe v. Grindr:

Their theory of algorithmic amplification is nothing more than an averment of facilitation. The core illegality—the choice to use Plaintiffs’ likeness and falsely represent that they endorsed certain investments—was exclusively undertaken by the scammers. Meta provided those scammers tools to disseminate that fraud that may well have played a role in the success of the ploy. However, as in both Dyroff and Grindr, Meta’s tools were content neutral on their own—it was the scammers who chose to manipulate those tools for illicit ends.

The judge distinguishes his own simultaneous ruling in Bouck:

[in Bouck,] the plaintiffs averred that Meta contributed materially to the development of the ads by offering generative-AI tools that developed the ultimate content of the fraudulent ads. Meta’s role in that scheme, therefore, allegedly went beyond offering neutral tools that promoted content developed exclusively by the scammers—Meta, at least according to the complaint, was a genuine co-conspirator in the creation of the offending content. Plaintiffs have failed to aver a similar level of complicity here.

The court summarizes: “Section 230 thus bars any claim which, at bottom, seeks to hold Meta liable for the damage done by the content of the fraudulent ads.”

Case Citation: Suddeth v. Meta Platforms, Inc., 2026 WL 810252 (N.D. Cal. March 24, 2026)

The June Bouck Ruling

We’re back to the classic Ninth Circuit switcheroo: the arguments that the plaintiffs used to get around Section 230 ensure the failure of the prima facie case. Here, the plaintiffs alleged state law claims to redress what is fundamentally a federal securities law claim. The court summarizes:

Meta…argues that the theory which helped Plaintiffs defeat the first motion to dismiss compels granting the second. If it is true that Meta contributed to the creation of the fraudulent ads, then this suit is necessarily based on the falsity of Meta’s statements. A suit in which a plaintiff claims the defendant made false statements which led the plaintiff to purchase securities when he otherwise would not have is quintessentially one sounding in the securities laws, even if the right of action comes from state law. SLUSA prevents precisely that type of suit from being maintained in any court, state or federal….

At bottom, Plaintiffs are trying to have it both ways. They assert Meta’s misrepresentations aided and abetted the core fraud by pushing them into scam investment groups while simultaneously maintaining that those misrepresentations were not material to their decision to purchase CLEU stock. Both cannot be true—either the misrepresentations mattered (in which case SLUSA applies) or they did not (in which case their claims fail on the merits).

This denouement will surely attract less attention than the March ruling.

The plaintiff could in theory overcome this ruling by bringing a federal securities act claim. However, I suspect the plaintiffs won’t due to the significant pleading challenges. Plus, it will be difficult or impossible to put Facebook on the hook for those claims.

Case Citation: Bouck v. Meta Platforms Inc., 2026 WL 1697630 (N.D. Cal. June 11, 2026)

The post Section 230 Doesn’t Apply to Generative AI Enhancements to Ad Copy (But the Plaintiffs Lose Anyway)–Bouck and Suddeth v. Meta appeared first on Technology & Marketing Law Blog.

On appeal, the Fifth Circuit embraces its characteristic chaos. First, it stayed the injunction without issuing an opinion. This is always terrible. Lifting the injunction changes the status quo without explaining why, making it virtually impossible to appeal. Courts should never do this. The injunction stay also potentially unleashed immediate action from AG/Senate candidate Paxton, who would love to bring another lawsuit against Google and Apple to try to distract Texas voters from his multitudinous political and personal flaws.

Then, a few days after staying the injunction, the Fifth Circuit issued a written opinion that, as usual, is untethered from US law. The opinion is also inappropriately brief and characteristically deficient on actual fact analysis. The published opinion is issued per curiam, which I suspect was intended to protect the authoring judge from accountabiilty for this turd.

The Fifth Circuit Opinion

Intermediate Scrutiny, Not Strict Scrutiny

The opinion says intermediate scrutiny applies because:

App store transactions are commercial in nature. After all, users browsing an app store can see a catalog of applications, obtain additional information, and download or purchase an application. App listings propose commercial transactions, regardless of whether any monetary payment is made. In fact, the “payment” for apps that are purportedly “free” is access to user data and private information….Detailed user data, including that of minors, is the lifeblood of the app store monetization ecosystem.

There are several problems with this:

• The fact that Google and Apple are for-profit entities and label themselves “stores” doesn’t automatically make everything they do “commercial speech.” Consider an analogy to Google search results. Some results are ads. Those are commercial speech. Some organic results are from commercial entitie hoping to catch customers. These may be commercial speech if they propose a transaction, but otherwise not. Some organic results are from non-commercial actors not looking to make any money at all. These are not commercial speech, even if Google is “monetizing” the page through the other ads elsewhere. Characterizing all Google search results as proposing a transaction would be a categorical error. I believe this opinion makes the same error for app store listings.
• In particular, many apps may not be commercial offerings at all. They could be apps from government entities, nonprofits, schools, religious organizations, or altruits who are giving their apps away for free with no strings attached. If a religious organization passes out leaflets on the street, they are not engaging in a commercial transaction of transferring leaflets.
• Many apps do not collect any private information from users, even if they are free-to-download. In those cases, there is no data “payment” at all. The opinion just made this fact up, using a factually unsupportable stereotype.
• The age authentication mandate is imposed on the app stores, but the opinion seems to be discussing the listings from the app developers. Is the app store carrying those listings “proposing a commercial transaction”? Part of the regulated activity is allowing users to access the app stores in the first place, before the user sees any listings. So the court has shifted the timing of the legally regulated activity to tell the story it wants to tell.

This passage is consistent with the prevailing Fifth Circuit opinion-drafting ethos, where it’s OK if the court doesn’t have the facts it wants because it can fill in the gaps with fiction.

In a footnote, the opinion says “SB2420 may not regulate speech at all, given that it does not target any substantive content but instead regulates commercial conduct with an incidental relationship to speech.” The so-called “commercial conduct” here would be the distribution of speech (the apps), but sure, let’s call that “an incidental relationship to speech.” Too bad the panel didn’t write that opinion.

The opinion cites the FSC v. Paxton opinion only twice, neither time to engage with the Supreme Court’s extensive discussion about why intermediate scrutiny was appropriate for age authentication mandates only if the mandates supported restrictions on content that is obscene as to minors–which is not the case. No one really believes the Supreme Court meant what it said in the FSC case (or any other case the Court is issuing nowadays), but the Fifth Circuit couldn’t even be bothered to engage with the opinion text.

Application of Intermediate Scrutiny

The opinion offers these conclusory statements without any further fact analysis:

Requiring age verification, parental consent, and app-related content ratings likely directly and materially advances Texas’s substantial interest in protecting children’s data, safety, and privacy in a digital world. Thus, there is likely a “reasonable fit” between SB2420’s methods and goals allowing parents to direct and supervise children’s downloads of apps and in-app purchases. That some works protected by the First Amendment may be the object of app downloads or in-app purchases does not categorically exempt them from ordinary regulations governing commercial transactions.

Restating a doctrine’s elements, without applying any of the facts to the elements, is the kind of rookie mistake that earns a C grade at best on a 1L final exam.

Disregarding Statutory Exclusions

The parental consent requirements exclude “emergency services and apps provided by an entity that develops standardized tests for use in postsecondary education.” The opinion disregards the favoritism towards these two categories because:

• the “emergency-services exception is not likely content-based but, instead, focuses on why the service is needed, not what is being communicated….Users do not need to create an account to access and use the emergency service app.” Huh? If the only type of permitted communication is content related to an emergency, how is that not content-based?
• the standardized test exclusion “which focuses on the identity of the speaker, does not necessarily reflect a content preference, but rather the reality that students often need to take tests….The speaker-based distinction appears to be content-neutral, not content-based, in discriminating among ideas or viewpoints.” The exception is for exams, which sounds pretty content-based to me. As a cheat, the opinion adds that the district court could just sever this provision if it’s unconstitutional.

No Vagueness

The opinion says the mandatory content rating scheme isn’t vague because the app stores can assume the apps set their ratings in good faith. The opinion says other challenged phrases are “plain and ordinary language [that] outlines its straightforward meaning” or have “well established and easily understood” meanings. Plus, there’s always the severability cheat.

Overbroad Injunction

The opinion says only the plaintiffs can receive the benefit of a court injunction, not any other regulated publishers.

Summation

The opinion rounds up its normative views:

The interests of Texas and the public interest coincide. Texas has a substantial, if not compelling, interest in protecting children, and parents need to have the necessary information to make informed choices affecting their children’s upbringing.

The need to protect children is intensified in the digital world, where app stores have violated existing consumer protection and child privacy laws for years, despite a federal consent decree. Absent SB2420, parents’ ability to protect their children is imperiled because app stores have encouraged minors to download applications and make in-app purchases without giving parents accurate content information or obtaining their informed consent. Any purported burden on app stores and developers is minimal because SB2420 requires only “commercially reasonable” verification methods and allows developers to use “widely adopted industry standards” in determining age ratings and those related to corresponding content.

Just about every word in this summation is wrong or misleading. Read my Segregate-and-Suppress paper for a fuller explanation of why.

Implications

Observation #1: Google and Apple didn’t challenge the law. They may be among the wealthiest companies that have ever existed in human history, but they let proxies and others carry their water and tell their story.

Observation #2: Despite the ongoing legal proceedings, and without even waiting to see the written opinion, Google and Apple immediately folded after the Fifth Circuit stayed the injunction. Both immediately complied with the law (Apple, Google).

Observation #3: The pliability of Google and Apple is nothing new. They have kowtowed to censors throughout the globe, so why not do so in the US too? The app stores have zero backbone when it comes to defending their editorial decision-making. As a reminder, the app stores didn’t challenge any of the many TikTok bans, even those that directly banned app stores from distributing TikTok.

Observation #4: Now that Apple and Google have rolled, what is the likelihood they will undo their implementation if the law gets overturned on further proceedings? I would rank the odds at zero. Once a censorship infrastructure is implemented, it rarely is ripped back out. This type of sticky interim compliance is a prime reason why censors can win, even if they pass unconstitutional laws.

Observation #5: The likelihood that regulated publishers will engage in interim compliance shows some problems with the Moody v. NetChoice opinion, which raised the bar on facial constitutional challenges. (This opinion observes, without doing any of the analytical work, that “It is highly unlikely that Plaintiffs have met this ‘rigorous standard'” for a facial challenge set by the Moody decision). If a publishers has to break the law and expose itself to the associated legal consequences to find out if a law is unconstitutional, we get a lot more censorship compliance and a lot fewer constitutional challenges.

Case Citation: Students Engaged in Advancing Texas v. Paxton, No. 25-51073 (5th Cir. June 4, 2026)

* * *

Blog Posts on Segregate-and-Suppress Obligations

• How Often Do Consumers Balk at Doing Online Age Authentication?
• Court Enjoins Another Arkansas Segregate-and-Suppress Law–NetChoice v. Griffin
• Too Many Courts Are Letting States Take Wrecking Balls to the Internet (Roundup)
• Texas Judge Enjoins App Store Authentication Law–CCIA and SEAT v. Paxton
• Courts Enjoin Internet Censorship Laws in Louisana and Arkansas
• Challenge to Maryland’s “Kid Code” Survives Motion to Dismiss–NetChoice v. Brown
• My Testimony Against Mandatory Online Age Authentication
• Read the Published Version of My Paper Against Mandatory Online Age Authentication
• Prof. Goldman’s Statement on the Supreme Court’s Demolition of the Internet in Free Speech Coalition v. Paxton
• Court Permanently Enjoins Ohio’s Segregate-and-Suppress/Parental Consent Law–NetChoice v. Yost
• Arkansas’ Social Media Safety Act Permanently Enjoined—NetChoice v. Griffin
• Why I Emphatically Oppose Online Age Verification Mandates
• California’s Age-Appropriate Design Code (AADC) Is Completely Unconstitutional (Multiple Ways)–NetChoice v. Bonta
• Another Conflict Between Privacy Laws and Age Authentication–Murphy v. Confirm ID
• Recapping Three Social Media Addiction Opinions from Fall (Catch-Up Post)
• District Court Blocks More of Texas’ Segregate-and-Suppress Law (HB 18)–SEAT v. Paxton
• Comments on the Free Speech Coalition v. Paxton SCOTUS Oral Arguments on Mandatory Online Age “Verification”
• California’s “Protecting Our Kids from Social Media Addiction Act” Is Partially Unconstitutional…But Other Parts Are Green-Lighted–NetChoice v. Bonta
• Section 230 Defeats Underage User’s Lawsuit Against Grindr–Doll v. Pelphrey
• Five Decisions Illustrate How Section 230 Is Fading Fast
• Internet Law Professors Submit a SCOTUS Amicus Brief on Online Age Authentication–Free Speech Coalition v. Paxton
• Court Enjoins the Utah “Minor Protection in Social Media Act”–NetChoice v. Reyes
• Another Texas Online Censorship Law Partially Enjoined–CCIA v. Paxton
• When It Comes to Section 230, the Ninth Circuit is a Chaos Agent–Estate of Bride v. YOLO
• Court Dismisses School Districts’ Lawsuits Over Social Media “Addiction”–In re Social Media Cases
• Ninth Circuit Strikes Down Key Part of the CA Age-Appropriate Design Code (the Rest is TBD)–NetChoice v. Bonta
• Mississippi’s Age-Authentication Law Declared Unconstitutional–NetChoice v. Fitch
• Indiana’s Anti-Online Porn Law “Is Not Close” to Constitutional–Free Speech Coalition v. Rokita
• Fifth Circuit Once Again Disregards Supreme Court Precedent and Mangles Section 230–Free Speech Coalition v. Paxton
• Snapchat Isn’t Liable for Offline Sexual Abuse–VV v. Meta
• 2023 Quick Links: Censorship
• Court Enjoins Ohio’s Law Requiring Parental Approval for Children’s Social Media Accounts–NetChoice v. Yost
• Many Fifth Circuit Judges Hope to Eviscerate Section 230–Doe v. Snap
• Louisiana’s Age Authentication Mandate Avoids Constitutional Scrutiny Using a Legislative Drafting Trick–Free Speech Coalition v. LeBlanc
• Section 230 Once Again Applies to Claims Over Offline Sexual Abuse–Doe v. Grindr
• Comments on the Ruling Declaring California’s Age-Appropriate Design Code (AADC) Unconstitutional–NetChoice v. Bonta
• Two Separate Courts Reiterate That Online Age Authentication Mandates Are Unconstitutional
• Minnesota’s Attempt to Copy California’s Constitutionally Defective Age Appropriate Design Code is an Utter Fail (Guest Blog Post)
• Do Mandatory Age Verification Laws Conflict with Biometric Privacy Laws?–Kuklinski v. Binance
• Why I Think California’s Age-Appropriate Design Code (AADC) Is Unconstitutional
• An Interview Regarding AB 2273/the California Age-Appropriate Design Code (AADC)
• Op-Ed: The Plan to Blow Up the Internet, Ostensibly to Protect Kids Online (Regarding AB 2273)
• A Short Explainer of Why California’s Social Media Addiction Bill (AB 2408) Is Terrible
• A Short Explainer of How California’s Age-Appropriate Design Code Bill (AB2273) Would Break the Internet
• Is the California Legislature Addicted to Performative Election-Year Stunts That Threaten the Internet? (Comments on AB2408)
• Omegle Denied Section 230 Dismissal–AM v. Omegle
• Snapchat Isn’t Liable for a Teacher’s Sexual Predation–Doe v. Snap
• Will California Eliminate Anonymous Web Browsing? (Comments on CA AB 2273, The Age-Appropriate Design Code Act)
• Minnesota Wants to Ban Under-18s From User-Generated Content Services
• California’s Latest Effort To Keep Some Ads From Reaching Kids Is Misguided And Unconstitutional (Forbes Cross-Post)
• Backpage Gets Important 47 USC 230 Win Against Washington Law Trying to Combat Online Prostitution Ads (Forbes Cross-Post & More)
• Backpage Gets TRO Against Washington Law Attempting to Bypass Section 230–Backpage v. McKenna
• MySpace Wins Another 47 USC 230 Case Over Sexual Assaults of Users–Doe II v. MySpace
• MySpace Gets 230 Win in Fifth Circuit–Doe v. MySpace
• Website Isn’t Liable When Users Lie About Their Ages–Doe v. SexSearch

The post Fifth Circuit Keeps Doing Fifth Circuit Things 📉–SEAT v. Paxton appeared first on Technology & Marketing Law Blog.

On March 9, 2026, Judge Chesney granted a preliminary injunction in the case of Amazon v. Perplexity, concluding Amazon was likely to succeed on its CFAA and California Penal Code section 502 theories.

If you’re familiar with the CFAA, the outcome of the preliminary injunction opinion was what you might expect.

But it is underwhelming in some new and interesting ways. It is, in my opinion, a shockingly poor effort to grapple with CFAA applicability to agentic AI technology after Van Buren.

If you’re unfamiliar, agentic AI is simply the name for AI that actually does work for you instead of answering questions. An agent can take a loose goal, break it into steps, use tools, gather information, make decisions, and come back with the task done. That makes it useful for the work people hate but still need judgment to finish, such as research, product comparisons, customer support, and multi-step coordination.

One valuable use case for agentic AI is shopping. Not only can Agentic AI tell you what the highest rated toaster on Amazon is for under $100, it can actually buy it for you.

You can tell agentic AI:

Buy a toaster on Amazon for under $100. Prioritize name brands, Amazon Prime shipping, and wide slots for bagels. Do not buy based solely on Amazon rating. Consider only models with at least 1,000 reviews, a rating of 4.7 or higher, and no obvious fake-review pattern. Cross-check at least two independent review sources or testing sites for confirmation that the quality is among the best at this price point. Choose a 2-slice toaster unless a 4-slice model is clearly better.

If one option is clearly superior under these criteria, add it to my cart and proceed to purchase. If not, add the best by these measures and I will review and purchase.

The thing about instructions like these is that they totally kill many of the ways online e-commerce sites make money. Amazon doesn’t just make money from selling you stuff and sending it to you. They also make money from product placement, ads, upselling, and a million other ways of nudging you into buying more stuff.

Amazon wants their search bar to be the way that you buy things online. But if the interface for your shopping becomes the AI labs’ platforms, that’s a big deal for e-commerce sites. It’s an existential threat to some e-commerce platforms and a major margins headwind for giants like Amazon and Walmart.

Those are the stakes.

* * *

The injunction in this case arose from Amazon’s challenge to Perplexity’s Comet browser and shopping agent. Perplexity built a tool that allows software to shop for users on Amazon through their logged-in accounts. Amazon sent a cease-and-desist letter. But Comet didn’t stop.

Created by ChatGPT Dec. 2025

The court focused on a familiar question for CFAA folks, which is that Amazon allegedly revoked authorization, Perplexity’s agents continued accessing Amazon’s systems through user accounts, and therefore Amazon was likely to succeed under theories derived from CFAA and California computer-access law.

From a pure CFAA perspective, the allegations were straightforward. Monopolist platform discovers a kind of automation that people who use the Internet enjoy, labels it “unauthorized,” cites to Power Ventures, points to investigative costs, and gets its injunction. It has happened before and it will happen again.

But the genuinely novel issue was totally ignored in the opinion. Perplexity’s Comet is an AI agent. And agentic AI is not merely collecting data. It is acting as the user’s delegated representative in an ongoing workflow.

The opinion makes zero effort to analyze:

• whether an AI agent should be treated like a browser,
• whether it should be treated like a human assistant using delegated credentials,
• whether agency-law concepts matter,
• whether user autonomy creates an independent authorization interest distinct from Power Ventures,
• whether there is a meaningful distinction between scraping data and performing user-directed actions.

Instead, the court seems to jump directly to the conclusion that Amazon retains ultimate authority to exclude the intermediary.

(In partial defense of the court, they hint that they may have discussed this at oral arguments. But there’s no analysis of agentic AI in the opinion itself).

From an agentic-AI perspective, it’s straightforward to ask:

If I can personally log into Amazon and buy a toaster, why can’t I save time and have software do it for me?

Because Power Ventures is dumb and Amazon says so, that’s why.

The Power Ventures framing has always allowed platforms to control their platforms, even when the user wants a certain tool to interact with them, if the integration includes a logged-in component. If there is a password at any part of the flow, most courts find that the CFAA can be used to crush any unwanted integration, no matter how benign or socially useful it is. Log-in plus cease-and-desist has almost always been a CFAA violation.

That’s why Power Ventures matters so much. If Power Ventures controls, Amazon gets to frame Comet as just another unwanted logged-in integration. If it doesn’t, the case becomes about whether users can delegate ordinary account activity to software.

That is also what makes this such an interesting test case for Power Ventures. Amazon wants to put Comet in the Power Ventures box, and legally, that is exactly where a plaintiff wants to be. But the factual analogy is imperfect. Power Ventures was not merely helping users operate Facebook. It built a competing service, collected Facebook users’ information, imported that information into its own platform, and used users’ networks to market itself. Comet’s better factual description is simpler, because the user is still shopping. The user just has delegated parts of the shopping flow to software.

If Power Ventures means that a platform can veto any third-party agent, then the CFAA becomes a platform-control statute for the agentic web. Maybe that is where the Ninth Circuit ultimately lands. But if that’s the case, the CFAA is going to be an increasingly unpopular law.

What’s especially disappointing is that courts continue to pretend that there are not difficult policy questions to consider with these new technologies. It is particularly true in this case, because it was a preliminary injunction proceeding, and the court was required to consider the broader public interest question. Perplexity argued that an injunction would disserve the public interest in consumer choice and innovation.

The court’s response was as thin and fragile as overcooked spaghetti. It said that the public has an interest in preventing unauthorized access to computers, and that was that.

The platform says it’s not allowed, therefore it’s not allowed, and it’s in the public’s interest for it not to be allowed.

See how easily we resolved issues with agentic AI?

Reasoning like this makes the CFAA one giant circle of enforcing platform preferences.

To be clear, there’s an argument for Amazon’s position, too. Platforms have real interests in account security, fraud prevention, bot detection, and knowing whether an automated system is moving through logged-in user accounts. But that’s only a small part of the story.

The anti-competitive implications here are super-obvious. Perplexity’s stated theory of the case is that Amazon does not like a user tool that routes around Amazon’s preferred shopping and advertising experience. AI agents “don’t have eyeballs” for the ads Amazon “bombards” users with. Even if you think that line is a bit cute, the underlying point is real. Intermediaries often threaten incumbents precisely because they reduce friction, reorder presentation, or weaken monetization levers the incumbent would rather preserve. Search engines did that. Price-comparison tools do that. Browser extensions do that. API clients and integrations do that. AI agents will absolutely do that in a way that the platforms are not yet prepared to deal with.

Stated plainly, the public interest section just isn’t serious here. A court need not become an antitrust tribunal every time someone says “innovation” or “consumer choice.” But this fact pattern is different from the fact pattern in Power Ventures. A court has a duty to at least think about that.

—

The other interesting part of this case is it’s another test of the definition of technological harm after Van Buren.

Knowing that the Power Ventures question was always going to be a tough climb, Perplexity also asked some of the other tough CFAA questions that Van Buren didn’t bother to answer. The order recognizes that Van Buren at least raises a question about whether “loss” should be limited to technological harms, and it notes the Ninth Circuit’s comment in hiQ about Van Buren requiring such harms. Then it basically shrugs and says, in substance, “this is going to be resolved in Amazon’s favor,” without any explanation or analysis of whether that’s the correct outcome.

To me, the technological harm question would be the easiest way to separate Power Ventures from benign or socially useful integrations. A few courts have agreed, but many do not.

And whether I like it or not, the Section 502 piece of the opinion is even more “chalk” than the CFAA ruling. California cases have long treated response and investigatory expenses as cognizable losses under Section 502. This also dates back to Power Ventures and beyond. So if defendants already face an uphill fight arguing that CFAA investigative costs must be tethered to technological harm notwithstanding Van Buren’s “technological harms” language, that argument is harder still under Section 502, where Van Buren is not controlling and the California text is friendlier to verification costs.

Regardless, it is hard to imagine that Power Ventures will survive agentic AI forever. Sooner or later, courts will be forced to acknowledge that people should be allowed to delegate to software tasks that they are legally allowed to do themselves, especially as software gets better and better at doing those tasks. But for now, Power Ventures stays intact. Until courts grapple with the power with what agentic AI actually does, the CFAA will remain what large platforms want it to be. Not just a law against hacking, but a legal cudgel against unwanted interoperability or user preferences.

The real task is for courts to acknowledge that platforms don’t need unchecked authority to kill all forms of automation on their platforms, but should instead distinguish malicious automation from disclosed, user-directed software that functions as the user’s chosen interface. I think we’ll get there eventually, but this opinion makes me think it’ll be some time before we do.

The post When Can Amazon Block an Agentic AI Service?–Amazon v. Perplexity (Guest Blog Post) appeared first on Technology & Marketing Law Blog.

The court starts out: “Plaintiff’s pursuit of a preliminary injunction in this “Schedule A” patent infringement suit fizzled out after plaintiff abandoned its appeal of my order denying that relief.” The bond amount was $10k. One of the restrained defendants sought damages out of the bond.

The defendant claimed $94k of damages due to the TRO. The court said the evidence supporting the $94k wasn’t adequate.

As a plan B, the defendant sought the $10k bond. A subsequent defense affidavit cured some of the court’s initial evidentiary objections.

The plaintiff objected to the defendant’s evidence as “self-serving.” Say what?? Every litigant provides self-serving evidence–including the plaintiff’s “self-serving” allegations when it requested–and received–the improperly granted TRO. By design, the adversarial system of adjudication expects each side to tell their best story and discredit the other side’s best story. That system breaks down when proceedings are ex parte, like the TRO the court ordered, because the plaintiff’s self-serving statements can go unchecked. So it’s WILD for a SAD Scheme plaintiff to object that a *defendant’s* filing is self-serving. As the Genie said in Aladdin:

With the defendant’s additional evidence, the court awards the $10k bond to the defendant. While that amount probably doesn’t fully compensate the defendant for its losses, the defendant still got more justice than most SAD Scheme defendants get.

I’m blogging this incident because it raises an obvious question: how do, and should, courts determine the amount of bonds that SAD Scheme plaintiffs must post to support their TRO requests? I am not aware of any bond-setting formula that courts have adopted to calculate optimal bond rates. (If you are aware of any literature on this point, I’d appreciate the referral). As a result, courts seemingly set completely arbitrary bond amounts. Of course, the defense can’t request higher bond amounts in ex parte proceedings, so the court has no idea how much harm any defendant could suffer from the TRO.

In my study of SAD Scheme judicial standing orders, I noted that “As of December 29, 2025, the web pages of Judges Alonso, Durkin, and Valderrama (all N.D. Ill.) specify a presumptive bond amount of $1,000 per SAD Scheme defendant.” As the dollars at issue in this case suggests, that amount is almost certainly too little, perhaps by one or even two orders of magnitude.

Judges have the discretion to set higher bond amounts in SAD Scheme cases. To avoid outcomes like this case, I hope they will assert that discretion more aggressively. As a fallback plan, they should be more open to scrutinizing the plaintiff’s possible bad faith in requesting the TRO, so that a too-small bond amount doesn’t improperly cap the defendant’s damages.

Case Citation: Bright Head, LLC v. Schedule A Defendants, 1:24-cv-13410 (N.D. Ill. April 6, 2026). #StopTheSADScheme

The post SAD Scheme Defendant Gets Damages Payout from the Bond–Bright Head v. Schedule A Defendants appeared first on Technology & Marketing Law Blog.

In a split opinion, a majority says this TOS formation failed:

Zeus chose to bury the page containing that agreement behind a hyperlink that itself was written in small, gray text that Tejon did not have to click. This text was located beneath large, red action buttons that Tejon did have to click. Was the hyperlink text enough to put Tejon on notice that clicking on the large, red buttons would subject him to binding arbitration? We find that it was not.

* * *

As usual, the majority starts with the wrap taxonomy. The majority says that there are only two wrap options: clickwrap or browsewrap. I wish there were zero nodes on the wrap taxonomy, but if we’re going to have a taxonomy, two nodes is too few to capture the diversity of TOS formation practices. Importantly, the majority doesn’t leave room to categorize the screen as a “sign-in-wrap,” which is how I think it would be how other circuits characterize it.

With only two choices, the majority says this TOS formation process is a “browsewrap.” (The dissent says the “parties agree that Zeus’s subscription page is a browsewrap agreement,” so the problem may lie in Florida/11th Circuit law forcing the binary choice). Once that wrap characterization is made, it’s pretty well accepted that browsewraps aren’t enforceable. In practice, the majority closely followed the Berman opinion from California, which was a sign-in-wrap opinion, and the majority had many other sign-in-wrap precedents to consider if it went looking. #EndTheWrapTaxonomy.

Despite the wrap tangent, the majority proceeds with the standard approach of reviewing whether the TOS disclosure was sufficiently conspicuous. The majority says no.

• “Zeus placed [the hyperlink] beneath two large, red action buttons that were prominently featured at the center of the page.”
• “Zeus’s terms of service hyperlink is printed in a small font on the bottom half of the page. It is easy to overlook given the larger font sizes and bolder colors of other elements on the page.”
• “all the text below the red action buttons, including the hyperlinked terms, appears in a dim, gray color.” The “dim” color phrase reminds me of the Chabolla reference to “timid” fonts.
• The underlined text was indistinguishable from the other text, and “Zeus’s hyperlink is not highlighted in a different color and is not in all capital letters.” CAPITAL LETTERS…SERIOUSLY?
• “Zeus’s terms of service notice simply does not say anything about arbitration. It would have been simple enough for Zeus to state plainly that clicking on one of the red buttons would subject any dispute between the user and Zeus to binding arbitration….Zeus chose instead to place the provision on a separate terms of service page. Having made that choice, it was required to design its website to ensure that a reasonable user would know to click to view the terms of service page, and it failed to do so.” Ugh, I’ve complained many times about this problem with layered notice. A court can always second-guess that the layered notice should have included the thing that is being contested by the plaintiff. This makes layered notices impossible because the top layer has to reference every possibly challengable term, which is all of them.

Notice that the majority doesn’t engage with the transaction context, another key part of the Ninth Circuit Chabolla/Godun tests. In general, the Ninth Circuit presumes that consumers signing up for a subscription will expect terms to govern their ongoing relationship. The majority doesn’t consider that possibility.

The majority summarizes:

None of the things that we have discussed—location on the page, font size, contrasting color, capital letters, underlining, informational content, and so forth—is individually required to pass a conspicuousness assessment. The point of these design elements is to place a reasonably prudent internet user on notice of the agreement at issue. The internet site owner may utilize some combination of these elements, or perhaps something else entirely, to bring attention to the agreement. Even better, the owner could use a clickwrap agreement. But Zeus chose to do none of this.

Judge Branch, a TAFS judge, dissented. She says the “hyperlink was centrally positioned directly beneath the action buttons, where the user’s attention is easily drawn; colored in light gray to contrast with the black background; underlined; appeared the same size as most of the text on the page; and set apart from a block of text below. A reasonably prudent person would not have missed it.”

(As usual, there was zero empirical support from either the majority or dissent for any assessment of what a reasonable consumer would think).

* * *

This ruling brings to mind the lament of Judge Bybee in the Chabolla decision: “Our decision today will drive websites to the only safe harbors available to them, the clickwrap or scrollwrap agreements.” You’ve been warned (repeatedly).

Case Citation: Tejon v. Zeus Networks, LLC, Case No. 24-11114 (11th Cir. May 1, 2026)

BONUS: U.S. v. Blocker, No. 25-1536 (7th Cir. May 5, 2026)

the fact that a contract is lengthy and poorly understood does not justify reading it with a thumb on the scale. The language of this contract unambiguously permits Dropbox to scan all files at its option and reveal the contents for five specified purposes—and Blocker does not deny that, having discovered child porn, one or more of these purposes applies.

The post 11th Circuit Rejects TOS Formation–Tejon v. Zeus appeared first on Technology & Marketing Law Blog.

The court contextualizes the case:

Intellectual property lawsuits like this one have flooded the Northern District of Illinois. In a typical case, the IP holder files trademark or copyright infringement claims against multiple foreign merchants selling goods on e-commerce platforms like Amazon or Etsy. The plaintiff joins the defendants in a single lawsuit, identifying them in a sealed document attached to the complaint as “Schedule A,” a practice that gives this increasingly common and controversial form of litigation its name. Before defendants are served, a Schedule A plaintiff seeks an emergency temporary restraining order, prejudgment restraint on the defendants’ assets, and electronic service of process, all ex parte. Often, defendants never respond or stop participating in litigation, so the district court must enter default and award statutory damages to the plaintiff with little or no information about the extent of the infringement.

This case follows much of the typical Schedule A playbook. Since 2017, China-based Huajie has sold clothing under the “bellelily” trademark on the website www.bellelily.com. In 2021, Leyibei, also based in China, began selling similar clothing on its similarly named website, www.bellelliy.com. (The “I” and an “L” are transposed in the two names.)

The panel clearly knows about the SAD Scheme, even though it hasn’t heard many appeals yet. For example, the judges already know that SAD Scheme cases are “flooding” the court system and are “controversial.”

Note that this case involves two Chinese litigants fighting in U.S. courts. That is a thing nowadays. Apparently, the Chinese vendors have adopted the philosophy “if you can’t beat ’em, join ’em.” The SAD Scheme gives them another tool to attack their competition. On the plus side, I guess the U.S. is exporting its litigation norms to foreigners. On the minus side, foreign competitor-on-competitor litigation sometimes has nothing to do with protecting U.S. consumers from harmful “counterfeits.” As the stereotype goes, the Chinese are skilled at copying U.S. innovations, and I guess the copiable innovations include the SAD Scheme.

Unlike many SAD Scheme cases, the defendant initially showed up to contest this lawsuit. However, by the time the rightsowner requested summary judgment, the defendant stopped participating.

As a result, the defendant defaulted, and the rightsowner submitted a proposed final judgment. The rightsowner’s proposed order was “barebones” and didn’t justify the rightsowner’s damages request. As a result, the lower court judge issued a final judgment that said the defendant’s infringement was willful and approved an injunction. However, instead of the rightsowner’s requested damages of $2M for willful trademark counterfeiting and $100k for cybersquatting, the district court–without explaining the decision–only awarded the mininum damages for each claim, i.e., $1k each claim, for a total of $2k. DOINK.

The rightsowner appealed the district court’s minimum damages award to the Seventh Circuit. The defendant didn’t show up to contest the appeal, so the rightsowner’s advocacy was completely unrebutted. And yet…the rightsowner still found a way to lose. DOINK AGAIN.

The per curiam opinion summarizes: “it may be better practice for district courts to briefly explain their reasoning in cases like this, but we decline to give Huajie a second bite at the apple.”

The opinion explains:

Huajie failed to offer evidence or arguments in favor of maximum damages, so the district court did not err by failing to offer a robust explanation of its ruling. Huajie argues that the district court should have circled back to its motion for summary judgment to search for support for its damages award. But it was Huajie’s job to make its case for maximum damages on default to the district court, not the court’s job to search through the record for support…

After the district court entered default, Huajie needed to offer evidence and arguments in support of the damages award. But…its proposed order, unaccompanied by any contemporaneously filed motion for entry of default judgment, lacked any rationale to support the maximum award. Although Huajie sought maximum statutory damages in its earlier motion for summary judgment—arguing that only a substantial award could compensate it for its losses and deter future misconduct—it failed to direct the court to those earlier arguments. So Huajie invited the consequence of which it now complains…

we affirm on a basis obvious from the record: nothing immediately available to the district court was adequate to support a $2 million award.

Because Huajie failed to establish its entitlement to the considerable damages it requested, we uphold the district court’s award of minimum statutory damages. We also take this opportunity to remind litigants that the race is not over after the entry of default. A plaintiff with a default in hand still must support a request for damages with evidence and argument.

Judge Pryor dissents in an opinion that recaps a lot of the same material as the per curiam opinion, suggesting that Judge Pryor hoped to write the majority opinion. She says there’s not enough substance in the district court’s judgment to permit the appellate court to evaluate if the district court judge exercised his discretion properly:

The [district court’s] order does not explain how and why the district court landed on its statutory damages award for willful trademark infringement ($1,000) or cybersquatting ($1,000), and nothing else in the record provides any hints. There’s simply no indication the district court exercised its discretion…

a district court must provide some explanation to support its exercise of discretion in fashioning an award of damages to satisfy due process and facilitate appellate review, even in Schedule A litigation regarding statutory damages

For that reason, Judge Pryor would have remanded the case so the lower court judge could explain the damages amounts.

Created by ChatGPT April 2026

I hear the point raised by Judge Pryor. Judicial rulings without explanations leave everyone scratching their head and stymie appellate review. For example, you may recall the avoidable drama created when the Fifth Circuit lifted the stay on Texas’ Social Media Censorship Act without issuing an opinion, making it virtually impossible to challenge at the Supreme Court. (The Supreme Court eventually eviscerated that law). However, in this case, the per curiam opinion persuasively explained that “Huajie invited the consequence of which it now complains” and doesn’t deserve a second bite at the apple.

When the dust settled, the rightsowner walks away with a whopping $2k in damages from this defendant, which is surely a substantial financial loss in light of the appeal costs. However, it also got an injunction, which may or may not be valuable.

* * *

It’s a bummer the Seventh Circuit once again didn’t substantively address the overall viability of the SAD Scheme. As I’ve repeatedly complained, the merits of SAD Scheme cases will rarely reach the appellate courts. The appellate courts’ silence helps the scheme persist.

At the heart of this appeal are two interrelated issues:

1) The rightsowner cut corners on its advocacy, not supporting its proposed final judgment with a rationale that the judge could rely on, and

2) The lower court judge (Judge Seeger, a savvy judge about SAD Scheme abuses) cut corners on issuing the final judgment. This might be the result of the extreme workloads that SAD Scheme cases impose on judges and/or the rightowner’s weak advocacy.

In my opinion, it’s always noteworthy when a plaintiff loses unopposed cases, because they are almost certain to win if they simply make a proper showing of their legal rights. Each time I wonder how they blew the layup.

Case Citation: Shenzhen Huajie Technology Co., Ltd. v. Shenzhen Leyibei Technology Co., Ltd., No. 25-2659 (7th Cir. April 29, 2026). The rightsowner’s lawyers were Adam Edward Urbanczyk and Brian M. Swift of AU LLC.

The post SAD Scheme Plaintiff Gets Default Win But Blows the Layup on Damages–Shenzen Huajie v. Shenzen Leyibei appeared first on Technology & Marketing Law Blog.

This case is a different lawsuit against Classpass, this time over unredeemable Classpass credits. Despite the unmistakable message from the Ninth Circuit that TOS formation screens should be reviewed exactingly, Judge Orrick of the N.D. Cal. district seems to be living in the past. He surprisingly holds that Classpass successfully formed its TOS and sends the case to arbitration. Why did Classpass succeed here when it failed last year at the Ninth Circuit? (If you expect a logical and sensible answer to that question, you must be new to the blog).

* * *

The named plaintiff, Blackburn, navigated through three relevant TOS formation screens. The opinion never precisely identifies which one successfully formed the TOS. It seems like all three did?

(The TOS contained an arbitration clause that everyone agrees applies to this lawsuit if the TOS was properly formed).

Blackburn created her Classpass account in 2019 by navigating this screen and choosing the option to continue with her Facebook credentials (the 2019 Sign Up Screen):

A few days later, in the next screen, she acquired her subscription membership through Classpass’ refer-a-friend program (which entitled her to additional credits) (the 2019 Checkout Screen):

In 2023, Blackburn reactivated her Classpass membership by navigating this screen (the 2023 Reactivation Checkout Screen):

Everyone seems to accept the court’s characterization that all three screens are “sign-in-wraps.” That turns us over to the now-familiar three-part test for evaluating sign-in-wrap formation.

Element 1: Reasonably Conspicuous Notice

Blackburn challenged the 2019 Login Screen’s visibility on three grounds:

• It was part of a 5-screen signup sequence. The court responds “the screens are not cluttered and follow a logical flow.”
• The TOS offer was the smallest font size on the screen. The court says it was the same size as other fonts on the screen.
• The TOS offer language was below the “Continue with Facebook” button she clicked. The court says “the “Terms of Use” is bolded, underlined, and in traditional hyperlink blue. That offsets any real concern that a reasonably prudent Internet user would not know or be aware that those hyperlinks existed just below the “Continue with Facebook” button.”

The court is also OK with the 2019 Checkout Screen visibility. The court acknowledges the TOS offer language in grey font, but says the:

text is still visually set apart from the other font that appears on the screen, despite the fact that it does not appear in blue font….

the hyperlinks are denoted by a bolded light grey font and underline, sufficiently contrasting the white background. Further, the “large text block[]” to which Blackburn refers is actually a two-sentence paragraph separated in space by the one-sentence paragraph denoting the Terms of Use, which makes the presentation of the Terms of Use hyperlink even more noticeable

The court is similarly OK with the 2023 Reactivation Checkout Screen visibility:

The text referring to the Terms of Use is once again just above the commitment button, written in light grey, but bolded font, and while not denoted in traditional hyperlink blue, is set apart from the rest of the text on the screen such that its presence draws the eye. The primary difference between the 2023 Reactivation Checkout Screen and the 2019 Checkout Screen, as Blackburn points out, is that the 2023 Reactivation Checkout Screen includes a black and bolded pronouncement to the user that “you’ll automatically be charged for a full-priced monthly credit plan subscription” and includes, in blue and underlined hyperlinked font, access to information about which Fees may apply. Those decisions to add additional notice of specific terms do not take away from ClassPass’s efforts to make the Terms of Use conspicuous by setting them apart in bolded, underlined font, in a separate paragraph with font color that contrasts the white background.

Element 2: Transaction Context

The Ninth Circuit punted on this factor in Chabolla (wrongly, IMO, because it’s clearly intended to create a long-term subscription), so this court does too. This court adds: “unlike in Chabolla, Blackburn took the additional step and created a ClassPass account by logging in with her Facebook account.”

Element 3: Manifestation of Assent

“Blackburn clicked a button after being presented with a hyperlink to the Terms of Use.”

The court distinguishes Chabolla:

in Chabolla, there was no indication that a user was ever signing up. Here, at the top of the 2019 Sign Up Screen there is a heading that unambiguously reads in bold lettering: Sign up

Blackburn pointed out that in the 2019 Signup Screen, the disclosures inconsistently and ambiguously refer to both “the” TOS and “our” TOS. The court responds that the argument “makes no sense. If a user is signing up through a preexisting Facebook account, that user must have necessarily already agreed to be bound to any Terms of Use or other terms of Facebook. It is not ambiguous to a reasonable Internet user signing up for an account or membership with ClassPass, even by way of Facebook, that any newly presented Terms of Use are those of ClassPass, not Facebook.”

With respect to the 2023 Reactivation Checkout Screen, Blackburn pointed out that the TOS offer language referred to “the” button but there were two buttons below it. The court responds:

“the” in the context of the 2023 Reactivation Screen must mean “either,” because a user attempting to access the 45 free Credits can only click one button to do so, or as the 2023 Reactivation Screen denotes, “the button.”

Normally, “the” connotes a singular reference. Here, the court reads it to connote plural references.  ¯\_(ツ)_/¯

In a footnote, the court says: “I do agree with Blackburn that the 2019 Checkout Screen’s language (“By clicking the Redeem now button, I agree to the Offer Terms and Terms of Use . . .”) is curious because it leaves out whether a user who chooses to pay using G Pay is likewise bound. But a reasonable Internet user would likely understand that payment using either method would bind the user to the visibly hyperlinked Terms of Use and it is clear that Blackburn manifested assent via the 2019 Sign Up Screen and 2023 Reactivation Screen in any event.”

Implications

I view the Chabolla and Godun opinions as companion cases. They came out just a couple of months apart, and they both took highly skeptical approaches to online TOS formation. Remarkably, this court doesn’t cite Godun even once. That is a conspicuous omission.

To me, this ruling is another reminder of how TOS formation analysis has descended into Calvinball. As Judge Bybee warned in dissent in the 9th Circuit Chabolla case: “minor differences between websites will yield opposite results….That sows great uncertainty in this area.” Here, comparing this lawsuit to Chabolla, we have the exact same defendant and similar formation processes from around the same historical time period, yet Classpass gets TOS formation when the Ninth Circuit denied it last year. The outcome appears to flip based on tiny differences.

I will also note how many of the court’s assessments turn fundamentally on consumer expectations, except the court doesn’t cite a shred of empirical evidence about what consumers think. The missing empiricism plays a major role in the Calvinball phenomenon.

If the court had been inclined to do so, it could have picked apart each screen and found deficiencies in each. After all, that’s what the Ninth Circuit did in its Chabolla case. Some examples:

• In the 2019 Signup Screen, the TOS offer language refers to “sign up with Facebook” and the button says “continue with Facebook.” Plus, there is a second “sign up” button lower on the screen that the court ignores even though it matches the TOS offer language. All of this may sound ticky-tack, but…in the Chabolla case, the court rejected a screen where the TOS offer said “I agree to” and the button said “redeem now,” and in the Godun case, one of the screens failed because the TOS offer said “I agree” and the button said “connect now.”
• In the 2019 Checkout Screen, the TOS offer language is stacked below a large paragraph of offer terms, and it appears to be a slightly smaller or lighter font than those. The court could say that reasonable consumers would spot it anyway, but that’s an empirical question without empirical support. Many other courts would have treated the text block as so monolithic that no sentence stood out.
• The 2023 Reactivation Confirmation Screen had the text block problem plus (as the court discussed) the imprecision of a reference to “the” button when there were two button options.

To be fair, I don’t necessarily support courts doing this degree of ticky-tack pixel policing. However, that level of exactitude drove the Chabolla and Godun decisions.

The screenshots at issue all predate the Chabolla and Godun decisions. Today, there’s no excuse for weak sign-in-wraps like this. I expect you to do better. The courts will expect that too.

As Judge Bybee said in dissent in Chabolla, “Our decision today will drive websites to the only safe harbors available to them, the clickwrap or scrollwrap agreements.” Want to opt-out of the TOS formation Calvinball? Take the certainty of clickwraps over the chaos of sign-in-wraps.

Case Citation: Blackburn v. Classpass USA Inc., 2026 WL 962734 (N.D. Cal. April 9, 2026)

The post Remember When the Ninth Circuit Rejected Classpass’ TOS Formation? About That…–Blackburn v. Classpass appeared first on Technology & Marketing Law Blog.