ProCD v. Zeidenberg
Encyclopedia
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447
(7th Cir.
1996), is a United States
contract case
involving a "shrink wrap license
". One issue presented to the court was whether a shrink wrap license was valid and enforceable. Judge Easterbrook
wrote the opinion
for the court and found such a license was valid and enforceable. The Seventh Circuit's
decision overturned a lower court decision.
produced by ProCD. ProCD had compiled the information from over 3,000 telephone directories, at a cost of more than $10 million. To recoup its costs, ProCD discriminated based on price by charging commercial users a higher price than it did to everyday, non-commercial users.
Zeidenberg purchased a non-commercial copy of SelectPhone and after opening the packaging and installing the software on his personal computer, Zeidenberg created a website
and offered the information originally on the CD to visitors for a fee that was less than what ProCD charged its commercial customers.
At the time of purchase, Zeidenberg may not have been aware of any prohibited use; however, the package itself stated that there was a license enclosed. Moreover, because "the software license splashed across the screen and would not let him proceed without indicating acceptance," Zeidenberg had ample opportunity to read the license before using SelectPhone. Zeidenberg was presented with this license when he installed the software, which he accepted by clicking assent at a suitable dialog box
—this type of license is commonly known as a click-through license
or clickwrap
. The license
was contained, in full, on the CD.
contract law. Under the Supreme Court
case, Feist Publications v. Rural Telephone Service
, the court held that a telephone directory was not protectable through copyright. In this case, the court assumes that a database
of a telephone directory was equally not protectable. However, the court held that a contract could confer among the parties similar rights since those rights are not "equivalent to any of the exclusive rights within the general scope of copyright".
The court then held the license valid and enforceable as a contract. The court relied primarily on the Uniform Commercial Code
(or UCC) sections 2-204 (describing a valid contract) and 2-206 (describing acceptance
of a contract). There was little doubt that ProCD, in fact, offered
use of the software as described by UCC section 22606. The court examined more closely the question of acceptance.
The court held that Zeidenberg did accept the offer by clicking through. The court noted, "He had no choice, because the software splashed the license on the screen and would not let him proceed without indicating acceptance." The court stated that Zeidenberg could have rejected the terms of the contract and returned the software. The court, in addition, noted the ability and "the opportunity to return goods can be important" under the UCC.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(7th Cir.
United States Court of Appeals for the Seventh Circuit
The United States Court of Appeals for the Seventh Circuit is a federal court with appellate jurisdiction over the courts in the following districts:* Central District of Illinois* Northern District of Illinois...
1996), is a United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
contract case
Legal case
A legal case is a dispute between opposing parties resolved by a court, or by some equivalent legal process. A legal case may be either civil or criminal...
involving a "shrink wrap license
Shrink wrap contract
Shrink wrap contracts are license agreements or other terms and conditions of a contractual nature which can only be read and accepted by the consumer after opening the product. The term describes the shrinkwrap plastic wrapping used to coat software boxes, though these contracts are not limited...
". One issue presented to the court was whether a shrink wrap license was valid and enforceable. Judge Easterbrook
Frank H. Easterbrook
Frank Hoover Easterbrook is the Chief Judge of the United States Court of Appeals for the Seventh Circuit. He has been Chief Judge since November 2006, and has been a judge on the court since 1985...
wrote the opinion
Opinion
In general, an opinion is a subjective belief, and is the result of emotion or interpretation of facts. An opinion may be supported by an argument, although people may draw opposing opinions from the same set of facts. Opinions rarely change without new arguments being presented...
for the court and found such a license was valid and enforceable. The Seventh Circuit's
United States Court of Appeals for the Seventh Circuit
The United States Court of Appeals for the Seventh Circuit is a federal court with appellate jurisdiction over the courts in the following districts:* Central District of Illinois* Northern District of Illinois...
decision overturned a lower court decision.
Facts
The case involved a graduate student, Matthew Zeidenberg, who purchased a telephone directory database, SelectPhone, on CD-ROMCD-ROM
A CD-ROM is a pre-pressed compact disc that contains data accessible to, but not writable by, a computer for data storage and music playback. The 1985 “Yellow Book” standard developed by Sony and Philips adapted the format to hold any form of binary data....
produced by ProCD. ProCD had compiled the information from over 3,000 telephone directories, at a cost of more than $10 million. To recoup its costs, ProCD discriminated based on price by charging commercial users a higher price than it did to everyday, non-commercial users.
Zeidenberg purchased a non-commercial copy of SelectPhone and after opening the packaging and installing the software on his personal computer, Zeidenberg created a website
Website
A website, also written as Web site, web site, or simply site, is a collection of related web pages containing images, videos or other digital assets. A website is hosted on at least one web server, accessible via a network such as the Internet or a private local area network through an Internet...
and offered the information originally on the CD to visitors for a fee that was less than what ProCD charged its commercial customers.
At the time of purchase, Zeidenberg may not have been aware of any prohibited use; however, the package itself stated that there was a license enclosed. Moreover, because "the software license splashed across the screen and would not let him proceed without indicating acceptance," Zeidenberg had ample opportunity to read the license before using SelectPhone. Zeidenberg was presented with this license when he installed the software, which he accepted by clicking assent at a suitable dialog box
Dialog box
In a graphical user interface of computers, a dialog box is a type of window used to enable reciprocal communication or "dialog" between a computer and its user. It may communicate information to the user, prompt the user for a response, or both...
—this type of license is commonly known as a click-through license
Clickwrap
A clickwrap agreement is a common type of agreement often used in connection with software licenses. Such forms of agreement are mostly found on the Internet, as part of the installation process of many software packages, or in other circumstances where agreement is sought using electronic media...
or clickwrap
Clickwrap
A clickwrap agreement is a common type of agreement often used in connection with software licenses. Such forms of agreement are mostly found on the Internet, as part of the installation process of many software packages, or in other circumstances where agreement is sought using electronic media...
. The license
License
The verb license or grant licence means to give permission. The noun license or licence refers to that permission as well as to the document recording that permission.A license may be granted by a party to another party as an element of an agreement...
was contained, in full, on the CD.
Holding
The court first held that copyright law did not preemptFederal preemption
Federal preemption refers to the invalidation of US state law when it conflicts with Federal law.-Constitutional basis:According to the Supremacy Clause of the United States Constitution,...
contract law. Under the Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
case, Feist Publications v. Rural Telephone Service
Feist Publications v. Rural Telephone Service
Feist Publications, Inc., v. Rural Telephone Service Co., 499 U.S. 340 , commonly called Feist v. Rural, is an important United States Supreme Court case establishing that information alone without a minimum of original creativity cannot be protected by copyright...
, the court held that a telephone directory was not protectable through copyright. In this case, the court assumes that a database
Database
A database is an organized collection of data for one or more purposes, usually in digital form. The data are typically organized to model relevant aspects of reality , in a way that supports processes requiring this information...
of a telephone directory was equally not protectable. However, the court held that a contract could confer among the parties similar rights since those rights are not "equivalent to any of the exclusive rights within the general scope of copyright".
The court then held the license valid and enforceable as a contract. The court relied primarily on the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
(or UCC) sections 2-204 (describing a valid contract) and 2-206 (describing acceptance
Offer and acceptance
Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. Agreement consists of an offer by an indication of one person to another of the offeror's willingness to enter into a contract on certain terms without...
of a contract). There was little doubt that ProCD, in fact, offered
Offer and acceptance
Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. Agreement consists of an offer by an indication of one person to another of the offeror's willingness to enter into a contract on certain terms without...
use of the software as described by UCC section 22606. The court examined more closely the question of acceptance.
The court held that Zeidenberg did accept the offer by clicking through. The court noted, "He had no choice, because the software splashed the license on the screen and would not let him proceed without indicating acceptance." The court stated that Zeidenberg could have rejected the terms of the contract and returned the software. The court, in addition, noted the ability and "the opportunity to return goods can be important" under the UCC.
External links
- Text of ProCD v. Zeidenberg
- Lower Court Decision (Western District of Wisconsin) (Overturned by Seventh Circuit)
- Legal Discussion of the legacy of ProCD v. Zeidenberg, published in February 2004 by Jones DayJones DayJones Day is an international law firm founded in Cleveland, Ohio on March 1, 1893, by Judge Edwin J. Blandin and William Lowe Rice. Jones Day is the eighth largest law firm in the world by revenue, and the fourth highest grossing firm in the US with annual revenues of US$1.4 billion...
(see section "Software License Jurisprudence") - Matthew Zeidenberg's Home Page
- Summary of ProCD v. Zeidenberg