On avoiding anxiety-inducing words in online terms of service

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Are “worldwide” “perpetual” rights really necessary?

Designer/developer Robert Nealan wrote a post questioning whether self-hosted blogging is dead. The piece is interesting as a commentary on the current state of blogging in general — a state that has changed a lot in the past decade or more, primarily due to the influences of outside social platforms, namely, Twitter, and more recently, as Robert notes and critiques, Medium.

The piece is a refreshing singing of praise for self-hosted blogs (like the one you’re reading). But another, no less important element of the post is an undercurrent shaped by a not-unjustified freak out of sorts over what third party platforms’ online terms of service say about their claim of rights in the users’ intellectual property. When we look to the terms of service for some of these platforms (and even more so if we actually think about what those terms say), we recognize that platforms quite often over-aggressively grab onto rights to do things with the content the user posts. So much depends on how these terms of service are written.

Lawyers can learn a lot from the commentary like that Robert Nealan has posted. As an object lesson and example, he takes issue with Svbtle’s terms, particularly the following:

Marketing. As a paid customer, you give Svbtle a perpetual world-wide license to use your company’s assets and logos, unless Svbtle agrees in writing otherwise. These assets and logos will be used purely for marketing and sales efforts, such as being displayed on the home page.

Good practice here would might consider adopting the ethos of certain “by design” concepts we see in the privacy and data security world. Think of “privacy by design” or “security by design” — the idea that a technology developer (e.g., someone building an app) should build the system in a way that it does not keep data around for longer than what is needed, and certainly for no longer than what the developer promises its users it will.

The same could be applied here — and it seems even simpler — for platforms to adopt principles establishing they will only exercise rights in relation to users’ intellectual property for only as long as they meaningfully need to do so. Let’s call it “Appropriate Rights by Design“. Words like “perpetual” and “world-wide” can be frightening. A platform hosting users’ content probably doesn’t need such extensive rights. If that’s the case, then the platform shouldn’t grab those rights. Those terms can be a red-herring. Robert Nealan took comfort in his piece in Medium’s terms which say that users of Medium “own the rights to the content [they] post on Medium,” and that Medium “[doesn’t claim ownership over any of it.” Funny thing is, a platform that grabs a world-wide, perpetual license could truthfully say the very same thing. So by not grabbing more rights than necessary, i.e., applying principles of Appropriate Rights by Design,  platforms will avoid having users latch on to scary words unnecessarily. For as long as this happens, it’s likely users will continue to have anxiety about moving to a third-party hosted platform, and in the same way, keep a light shining on what’s good about self-hosted blogs and other platforms.

Evan Brown is a Chicago attorney advising enterprises on important aspects of technology law, including software development, technology and content licensing, and general privacy issues.

Photo courtesy Flickr user fady habib under this Creative Commons license.

Court provides guidance on how to effectively communicate online terms of service

Are online terms of service provided via hyperlink in an email binding on the recipient of that email? The Second Circuit recently addressed that question, and the decision gives guidance on best practices for online providers.

Plaintiff booked a trip to the Galapagos Islands using defendant’s website. When she purchased her ticket, she got a booking information email, a confirmation invoice and a service voucher. (It is not clear how plaintiff got the confirmation invoice and the service voucher – the court’s opinion says they were sent as emails, but the PACER record does not show them as emails. In any event, plaintiff did not dispute that she received all three documents, nor did she dispute all three documents contained a hyperlink to defendant’s “terms and conditions” which were available online.)

One evening during the trip, a tour guide allegedly assaulted plaintiff. She sued defendant for negligently hiring and training that tour guide. Defendant moved to dismiss, pointing to language in the online terms and conditions that called for disputes to be heard in Canadian court. The district court dismissed the action, and plaintiff sought review with the Second Circuit. On appeal, the court affirmed. It held that defendant had reasonably communicated the forum selection clause to plaintiff by using hyperlinks and the appropriate language in the terms and conditions.

Each of the documents contained an underlined hyperlink, and accompanying language advising plaintiff to click on the hyperlink. The booking information email contained a standalone provision with the heading “TERMS AND CONDITIONS”. This section stated that “[a]ll . . . passengers must read, understand and agree to the following terms and conditions.” The hyperlink immediately followed. Both the confirmation invoice and the voucher contained a link to the terms and conditions, preceded by “[c]onfirmation of your reservation means that you have already read, agreed to and understood the terms and conditions. . . .”

The actual structure and language of the terms and conditions also served to reasonably communicate the forum selection clause. The second paragraph stated that the terms and conditions “affect your rights and designate the governing law and forum for the resolution of any and all disputes.” Later in the terms and conditions, a standalone section titled “APPLICABLE LAW” provided that all matters arising from the agreement were subject to Ontario and Canadian law and the exclusive jurisdiction of the Ontario and Canadian courts.

The decision validates the notion that an e-commerce provider can rely on establishing valid and binding contracts with its customers without having to actually transmit a copy of the terms and conditions that would apply to the transaction. Though the facts of this case dealt with email, there is no substantive reason why the best practices revealed by the court’s decision would not apply to providers of mobile apps and other online platforms.

Starkey v. G Adventures, Inc., — F.3d —, 2015 WL 4664237 (2nd Cir. August 7, 2015)

Evan Brown is an attorney in Chicago helping clients manage issues involving technology and new media.

Jury finds in favor of IMDb in case brought by actress over published age

Hoang v. IMDb.com, No. 11-1709, W.D.Wash. (Jury verdict April 11, 2013)

Actress Junie Hoang was upset that IMDb published her real age (she was born in 1971). She sued IMDb claiming it breached its Subscriber Agreement (particularly its privacy policy) by using information she provided to cross-reference public records, and thereby ascertaining her correct age.

The case went to trial on the breach of contract claim. The jury returned a verdict in favor of IMDb.

Though we don’t know the jury’s thinking (we only have a simple verdict form), IMDb had argued, among other things, that its investigations of plaintiff’s birthday were in response to requests she had made. In 2008, plaintiff had asked IMDb to remove a false (1978) birthdate plaintiff had submitted a few years earlier. When IMDb conducted its own research, it found plaintiff’s real birthdate in public records, and published that. The jury found this did not violate IMDB’s Subscriber Agreement.

GoDaddy outage reminds us why limitation of liability clauses are important

The legal team at GoDaddy today probably had more than one conversation about Section 13 of the company’s Universal Terms of Service. That Section contains pretty widely used language which limits how badly GoDaddy could get hurt by an epic failure of its system like the one that happened today.

We are conspicuously told that:

IN NO EVENT SHALL Go Daddy, ITS OFFICERS, DIRECTORS, EMPLOYEES, OR AGENTS BE LIABLE TO YOU OR ANY OTHER PERSON OR ENTITY FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES WHATSOEVER . . .

Language like this is critical to technology service agreements. Today’s huge blackout illustrates the extent to which GoDaddy would be on the hook if such a limitation were not in place. Thousands of sites were offline for hours, losing uncountable pageviews and ecommerce sales. Holding GoDaddy responsible for those millions of lost dollars (which would be in the categories of indirect, special and consequential damages) could put a company into bankruptcy. GoDaddy would be big enough (probably) to pick up the tab in such a situation once or twice. Smaller enterprises would likely not be as lucky.

This kid is like GoDady inasmuch as he's trying to limit his liability.

To illustrate the effect of limitation of liability clauses, I have often used the example of similar language in Microsoft’s end user license agreement for Office. Because that is there, you cannot go after Microsoft for the business you lose if Word fails on your computer and you miss the deadline for submitting that big proposal. After today we have a new, perhaps more relevant example. GoDaddy would be pretty protected if you claim that you missed out on that million dollar client because your website was down.

So if you were looking for me through my site today, let me know, so I can send a bill for what you would have paid me to GoDaddy. Then again, I guess I’ve already shown why that won’t get paid.

Photo courtesy Flickr user Mikol under this Creative Commons license.

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