|
|
|
Compare the following case to Specht, page 179 in the textbook-
REGISTER.COM, INC. v. VERIO, INC. (356 F.3d 393, 2nd Cir. 2004) LEVAL, Circuit Judge - Defendant, Verio, Inc. ("Verio") appeals from an order of the United States District Court for the Southern District of New York (Barbara S. Jones, J.) granting the motion of plaintiff Register.com, Inc. ("Register") for a preliminary injunction. The court's order enjoined Verio from (1) using Register's trademarks; (2) representing or otherwise suggesting to third parties that Verio's services have the sponsorship, endorsement, or approval of Register; (3) accessing Register's computers by use of automated software programs performing multiple successive queries; and (4) using data obtained from Register's database of contact information of registrants of Internet domain names to solicit the registrants for the sale of web site development services by electronic mail, telephone calls, or direct mail. We affirm. . . .
BACKGROUND This plaintiff Register is one of over fifty companies serving as registrars for the issuance of domain names on the world wide web. As a registrar, Register issues domain names to persons and entities preparing to establish web sites on the Internet. Web sites are identified and accessed by reference to their domain names.
Register was appointed a registrar of domain names by the Internet Corporation for Assigned Names and Numbers, known by the acronym "ICANN." ICANN is a private, non-profit public benefit corporation which was established by agencies of the U.S. government to administer the Internet domain name system. To become a registrar of domain names, Register was required to enter into a standard form agreement with ICANN, designated as the ICANN Registrar Accreditation Agreement, November 1999 version (referred to herein as the "ICANN Agreement").
Applicants to register a domain name submit to the registrar contact information, including at a minimum, the applicant's name, postal address, telephone number, and electronic mail address. The ICANN Agreement, referring to this registrant contact information under the rubric "WHOIS information," requires the registrar, under terms discussed in greater detail below, to preserve it, update it daily, and provide for free public access to it through the Internet as well as through an independent access port, called port 43. . . .
Section II.F.5 of the ICANN Agreement
(which furnishes a major basis for the appellant Verio's contentions on this
appeal) requires that the registrar "not impose terms and conditions" on the use
made by others of its WHOIS data "except as permitted by ICANN-adopted policy."
In specifying what restrictions may be imposed, the ICANN Agreement requires the
registrar to permit use of its WHOIS data "for any lawful purposes except to:
... support the transmission of mass unsolicited, commercial advertising or
solicitations via email (spam ); [and other listed purposes not
relevant to this appeal]." (emphasis added).
Discussion . . .Verio's next contention assumes that Register was legally authorized to demand that takers of WHOIS data from its systems refrain from using it for mass solicitation by mail and telephone, as well as by email. Verio contends that it nonetheless never became contractually bound to the conditions imposed by Register's restrictive legend because, in the case of each query Verio made, the legend did not appear until after Verio had submitted the query and received the WHOIS data. Accordingly, Verio contends that in no instance did it receive legally enforceable notice of the conditions Register intended to impose. Verio therefore argues it should not be deemed to have taken WHOIS data from Register's systems subject to Register's conditions.
Verio's argument might well be persuasive if its queries addressed to Register's computers had been sporadic and infrequent. If Verio had submitted only one query, or even if it had submitted only a few sporadic queries, that would give considerable force to its contention that it obtained the WHOIS data without being conscious that Register intended to impose conditions, and without being deemed to have accepted Register's conditions. But Verio was daily submitting numerous queries, each of which resulted in its receiving notice of the terms Register exacted. Furthermore, Verio admits that it knew perfectly well what terms Register demanded. Verio's argument fails.
The situation might be compared to one in which plaintiff P maintains a roadside fruit stand displaying bins of apples. A visitor, defendant D, takes an apple and bites into it. As D turns to leave, D sees a sign, visible only as one turns to exit, which says "Apples--50 cents apiece." D does not pay for the apple. D believes he has no obligation to pay because he had no notice when he bit into the apple that 50 cents was expected in return. D's view is that he never agreed to pay for the apple. Thereafter, each day, several times a day, D revisits the stand, takes an apple, and eats it. D never leaves money.
P sues D in contract for the price of the apples taken. D defends on the ground that on no occasion did he see P's price notice until after he had bitten into the apples. D may well prevail as to the first apple taken. D had no reason to understand upon taking it that P was demanding the payment. In our view, however, D cannot continue on a daily basis to take apples for free, knowing full well that P is offering them only in exchange for 50 cents in compensation, merely because the sign demanding payment is so placed that on each occasion D does not see it until he has bitten into the apple.
. . .Verio seeks support for its position from cases that have dealt with the formation of contracts on the Internet. An excellent example, although decided subsequent to the submission of this case, is Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir.2002). The dispute was whether users of Netscape's software, who downloaded it from Netscape's web site, were bound by an agreement to arbitrate disputes with Netscape, where Netscape had posted the terms of its offer of the software (including the obligation to arbitrate disputes) on the web site from which they downloaded the software. We ruled against Netscape and in favor of the users of its software because the users would not have seen the terms Netscape exacted without scrolling down their computer screens, and there was no reason for them to do so. The evidence did not demonstrate that one who had downloaded Netscape's software had necessarily seen the terms of its offer.
Verio, however, cannot avail itself of the reasoning of Specht. In Specht, the users in whose favor we decided visited Netscape's web site one time to download its software. Netscape's posting of its terms did not compel the conclusion that its downloaders took the software subject to those terms because there was no way to determine that any downloader had seen the terms of the offer. There was no basis for imputing to the downloaders of Netscape's software knowledge of the terms on which the software was offered. This case is crucially different. Verio visited Register's computers daily to access WHOIS data and each day saw the terms of Register's offer; Verio admitted that, in entering Register's computers to get the data, it was fully aware of the terms on which Register offered the access. . . . Compare the following case to Comb v. PayPal, page 165 in the textbook-
v. BLOCKBUSTER, INC., Defendant and Respondent. 2004 WL 339594 (Cal.App. 1 Dist.) Feb. 24, 2004. . . .
GEMELLO, J.
. . .
III. The Late Fee Policy Is Not Unconscionable
A. The Law of Unconscionability
Under this section, a court may determine that a
provision is unconscionable only if it is both procedurally and substantively
unconscionable. . . . The former element focuses on "oppression or surprise due
to unequal bargaining power," the latter on "overly harsh or one-sided results."
. . . Courts will not invalidate a contract or clause unless there are some
indicia of both procedural and substantive unconscionability, these elements
co-exist in a sliding scale relationship: the more substantively oppressive the
contract term, the less evidence of procedural unconscionability is required to
annul the offending provision, and vice versa. (Ibid.) We consider both
the procedural and substantive unconscionability of Blockbuster's late fee.
B. Procedural Unconscionability
Thus, either surprise or unequal bargaining power may indicate procedural unconscionability. . . . Where either is present, procedural unconscionability may be found. . . .
Here, Pickens does not attempt to demonstrate that the late fee was hidden from her. Instead, she rests her procedural unconscionability claim entirely on the ground of unequal bargaining power and a resulting absence of choice. She argues that the late fee was included on a take-it-or-leave-it basis, and that she had no choice but to accept the provision. Blockbuster does not dispute that its standard membership agreement is not open to negotiation. A contract presented on a take-it-or-leave-it basis is adhesive and procedurally unconscionable. . . .
However, a finding of adhesiveness is " 'the beginning and not the end of the analysis insofar as enforceability of [a contract's] terms is concerned.' " . . . We conclude that Pickens has shown, at most, a minimal degree of procedural unconscionability.
We base this conclusion on two additional factors. First, Pickens had the opportunity to avoid the fee entirely by returning each video she rented within the initial viewing period. . . .Second, Pickens does not dispute that she has many alternatives from which to obtain videos. She submitted a declaration saying in part, "It is true that there are video competitors to Blockbuster. In fact, I often use their services. . .
While there is some division in the cases with respect to how much weight to give the availability of alternative sources, there is virtual unanimity that the availability of such sources weighs against any finding of unconscionability. (See, e.g., . . . Comb v. PayPal, Inc. (N.D.Cal.2002) 218 F.Supp.2d 1165, 1172-1173 [denying motion to compel arbitration in part because of factual dispute over whether alternative sources existed or imposed similar provision]. . . . The reason for this rule is plain. Whether terms are presented in an adhesive manner, on a take-it-or-leave-it basis, is but one way of determining whether a contract provision is the product of unequal bargaining power and the ability of one side to impose its terms at will. When a party has other choices, but nevertheless agrees to accept the terms offered by a particular source of the product in question, courts will more readily infer that the provision is not the product of unequal bargaining power but a term freely accepted by the offeree. In such instances, there is less cause for concern, and the term will be subject to less stringent substantive scrutiny. . . .
C. Substantive
Unconscionability
With these principles and caveats in mind, we consider whether Blockbuster's $3 or less late fee is so high that it shocks the conscience. As a matter of law, it does not. For the period since February 2000, the fee and viewing period provided are identical to Blockbuster's initial charges and viewing periods. For the period before February 2000, they are marginally higher, but considerably less than one might pay to see the same movie in the theater. Pickens freely concedes that the video retail market is highly competitive, and it appears undisputed that market forces drove Blockbuster to modify its late fee policies in February 2000. Presented with a properly functioning and highly competitive market in which Pickens had many alternatives, we see no occasion to engage in judicial price regulation and declare Blockbuster's late fees substantively unconscionable.
|
|
This site is maintained by Jeffrey Pittman. Please direct comments to pittman@astate.edu. |