Forum selection clause upheld in content scraping case

In the case of Cairo, Inc. v. CrossMedia Services, Inc., decided on April 1, 2005, the U.S. District Court for the Northern District of California has held that although a company using scrapers to gather content from a competitor’s website did not expressly assent to the website’s terms of use, the scrapers’ “repeated and automated” access to the site created imputed assent to the terms of service and the forum selection clause appearing therein.

Both parties to this case operate database-driven websites that users can access to get information about local retail sales. Soon after Cairo launched its site in late 2004, CrossMedia noticed that Cairo was “scraping” content and images from CrossMedia’s sites and implementing that material on Cairo’s sites. Cairo also created “deep links” in its site leading to pages within CrossMedia’s sites. According to CrossMedia, Cairo automatically accessed CrossMedia’s servers thousands of times each month to gather information.

CrossMedia sent a cease and desist letter to Cairo in November 2004. Soon thereafter, without waiting to be sued for infringement, Cairo filed the present case in federal court in California, asking for a declaratory judgment. Cairo sought a determination that, among other things, Cairo’s website did not infringe any of CrossMedia’s copyrights or trademarks.

Cairo is a California company and CrossMedia is located in Chicago. CrossMedia moved to dismiss the action, citing a forum selection clause appearing in the terms of service of its various websites. This forum selection clause stated that “[j]urisdiction for any claims arising under this Agreement shall lie exclusively with the state or federal courts in Chicago, Illinois where CrossMedia has its principal place of business.”

The court sided with CrossMedia by determining that the forum selection clause applied and dismissed the action.

Cairo had argued the action should not be dismissed because it had no agreement with CrossMedia. Cairo contended that it never assented to the websites’ terms of use, thus it was not bound by the forum selection clause.

The court found these arguments unpersuasive. It looked to the decision in Register.com v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) to determine that “when a benefit is offered subject to stated conditions, and the offeree makes a decision to take the benefit with knowledge of the terms of the offer, the taking constitutes acceptance of the terms, which accordingly become binding on the offeree.” Cairo’s visits to CrossMedia’s sites with knowledge of the terms of use constituted acceptance of the terms.

Similarly, the court rejected Cairo’s argument that the Specht v. Netscape Comm. Corp. case (306 F.3d 17 (2d Cir. 2002)) should apply. In that case, the Second Circuit ruled that a click-wrap agreement did not bind the parties where users had to scroll down their screens without reason to do so in order to see the terms of the agreement. In the present case, the court found that Cairo had imputed knowledge of the terms of use through its “repeated and automated use” of CrossMedia’s sites. “[E]ven accepting Cairo’s allegation that it did not explicitly agree to [CrossMedia]‘s Terms of Use, the Court finds that Cairo’s use of [the] web site under circumstances in which Cairo had actual or imputed knowledge of [the] terms effectively binds Cairo to [the] Terms of Use and the forum selection clause therein.”

Cairo, Inc. v. CrossMedia Services, Inc., 2005 WL 756610 (N.D. Cal., April 1, 2005).

See also Dix v. ICT Group, — P.3d —, 2005 WL 372483 (Ct. App. Wash., Feb. 17, 2005).