Bodyless - those same considerations came up in the Zeitenberg case in 1996. That was part of the justification for upholding EULAs.
End of quote
Regarding
Procd, Inc. v. Zeidenberg - Yes, it explicitly supports Willy's belief that the distinction between "Merchant" and "Consumer" is illusory, and uses that to make shrink-wrap agreements binding in the 7th district.
It's several pages long, and I'm not going to rebut it point by point, but you should read the case, and then read the law, and come to your own decision about whether I mischaracterize the case.
The first most interesting point is that it creates an interesting new right on the part of a company, and justifies the rest of the case in relationship to this new right. The new right is the right to control 'Arbitrage' - the ability to keep people that are getting a better deal on a product from making a profit by selling to those that can't get that kind of a deal, and pocketing some of the difference.
This is interesting for one simple reason. There is no law creating a right to control arbitrage. The court cites numerous *examples* of controlling arbitrage, and then generalizes from the concept that it can be done to the fact that a company has some inherent right to do it, and since you have to have a shrink-wrap agreement to enforce that right to do it, a shrink-wrap agreement *must* be enforcable.
Then the judge proceeds to discard the question of whether you're dealing with a Merchant or a Consumer:
"Anyone can walk into a retail store and buy a box. Customers do not wear tags saying "commercial user" or "consumer user." Anyway, even a commercial-user-detector at the door would not work, because a consumer could buy the software and resell to a commercial user. That arbitrage would break down the price discrimination and drive up the minimum price at which ProCD would sell to anyone". Now, if the law didn't have specific provision distinguishing "Consumer" and "Merchant", the judge would have some point, however the judges opinion deals with the specific definitions of consumer anf merchant by . . . ignoring the fact that they exist, and then treating everyone as a merchant.
You have to put that in that order, because if the judge ignored the distinction and then ignored the parts that define the two, the UCC by default treats everyone as a consumer and treats the exceptions with some variation of "Except as between Merchants", so then ANY EULA would be subject to the maximum protection of the relevant parties. By ignoring the definitions, then treating everyone as merchants, he reverses that and grabs everyone and puts them into the *least* protected class.
Which is exceedingly odd since the
definition of merchant makes it fairly clear that that the buyer would qualify as a merchant - the buyer was capable of pulling this information out of a specialized database and reselling it. That's not a common skill, and as a merchant Zeidenberg would have been held to the EULA, as he should have been. He was copying and reselling the information - that's not "personal, family, or household purposes."
So, this decision *could* have simply noted that he qualified as a merchant and been done with it. Instead the court went to all sorts of effort to pretend there was no distinction.
The rest of the decision is to justify the formation of the contract.
"Zeidenberg does argue, and the district court held, that placing the package of software on the shelf is an "offer," which the customer "accepts" by paying the asking price and leaving the store with the goods. Peeters v. State, 154 Wis. 111, 142 N.W. 181 (1913). In Wisconsin, as elsewhere, a contract includes only the terms on which the parties have agreed. One cannot agree to hidden terms, the judge concluded. So far, so good-- but one of the terms to which Zeidenberg agreed by purchasing the software is that the transaction was subject to a license. Zeidenberg's position therefore must be that the printed terms on the outside of a box are the parties' contract--except for printed terms that refer to or incorporate other terms. But why would Wisconsin fetter the parties' choice in this way?"
The first question the court never answers is whether this is a separate contract or a UCC 2 modification of a contract, so strictly speaking, I think this fails because of equivocation - we don't know, for certain, whether when the court refers to this contract they are referring to a General Contract or a UCC 2 modification of a contract. From context, it would appear to be the latter, but it's not explicitly stated. However the entire "Consumer" versus "Commercial" dialogue gives us context, the court appears to be dealing in UCC 2 law, and many of the citations come from UCC 2 law. Fair Enough.
Well, the short answer for "why would Wisconsin fetter the parties' choice in this way?" is that Wisconson accepted the UCC 2 as written, which means that consumers are specifically exempted from these kind of terms without being made formally aware of them - even the contract on the outside of the box is something that requires formal acceptance for a consumer to be bound by - so it's reference to further, hidden terms never comes into play if the buyer is a consumer.
"Transactions in which the exchange of money precedes the communication of detailed terms are common. Consider the purchase of insurance. The buyer goes to an agent, who explains the essentials (amount of coverage, number of years) and remits the premium to the home office, which sends back a policy. On the district judge's understanding, the terms of the policy are irrelevant because the insured paid before receiving them. Yet the device of payment, often with a "binder" (so that the insurance takes effect immediately even though the home office reserves the right to withdraw coverage later), in advance of the policy, serves buyers' interests by accelerating effectiveness and reducing transactions costs. Or consider the purchase of an airline ticket. The traveler calls the carrier or an agent, is quoted a price, reserves a seat, pays, and gets a ticket, in that order. The ticket contains elaborate terms, which the traveler can reject by canceling the reservation. To use the ticket is to accept the terms, even terms that in retrospect are disadvantageous."
Which goes into
"Consumer goods work the same way. Someone who wants to buy a radio set visits a store, pays, and walks out with a box. Inside the box is a leaflet containing some terms, the most important of which usually is the warranty, read for the first time in the comfort of home."
The exact kind of apples and oranges comparison I've gotten on Willy about, comparing highly regulated industries with specific terms drawn out requiring you to initial various paragraphs to buying a radio at the store. I'm not sure what the district judges policy says, but I went through an entire HR session at with my employer when I was hired going over the terms of my health insurance plan. My House insurance went through the same thing - I spoke to a specialist and asked about anything I didn't understand (When I bought the house). My *Radio* on the other hand had a short pamphlet with a set of explanations of what was covered, and a set of 'Waivers' saying no further express or implied was valid unless determined by local law. I had the exact same set of rights if there was *no* pamphlet in the box, because they are set by the local consumer protection laws - the pamphlet is informational only.
So, no, it's incredibly sloppy thinking to posit that these are equivalent. They're simply not, on the face of them, even vaguely equivalent. They *are* UCC law, but where they impinge on UCC 2 then you're dealing with a merchant to consumer sale, with all the paperwork that implies, or a set of waivers - and quite often he's caparing that to things that don't even fall under UCC 2 - There are
Nine UCC Articles, dealing with everything from buying popcorn (UCC 2) to investment instruments (UCC 8) - the laws aren't the same, the relationships between you and your broker are not the same as the relationship between you and the cashier at Wal-mart.
"ProCD proposed a contract that a buyer would accept by using the software after having an opportunity to read the license at leisure. This Zeidenberg did. He had no choice, because the software splashed the license on the screen and would not let him proceed without indicating acceptance. So although the district judge was right to say that a contract can be, and often is, formed simply by paying the price and walking out of the store, the UCC permits contracts to be formed in other ways."
And here is where the problem of Equivocation comes into play - because the assumption *here* is that the EULA is a separate contract. A minute ago it looked like a modification of the sales contract, but now it's a separate contract - in which case the question of questions 2B) and 3) come into play - what consideration did the buyer receive? Not the right to install - he already had that. By keeping him from exercisicing his legal right to use the program without accepting the contract, Pro CD Inc was in fact extorting his cooperation, and since he received no additional consideration in exchange for the rights he lost by signing it actually fails as a contract.
So, fundamentally, when it's convenient to the court to consider this a modification of the sale contract, the court used that. Then, when convenient to consider this EULA a separate contract, they used that. So what we get is a nifty new kind of contract that applies to anyone at time of sale, yet doesn't require consideration. Great deal if you can get it - and in District seven (Where I live, god help us all) you can.
But I still think it's a bad decision that went to a lot of extra effort to create precedents to be abused, and I think I can honestly say I've explained why.
Jonnan
JoeUser Forums
In his summary ruling on Blizzard's case against World of Warcraft cheat-maker Michael Donnelly (released yesterday), District Court Judge David Campbell has stated that the act of using a bot in violation of a game's license or terms of use qualifies as a copyright violation. Huh?
GalCiv2 Forums
Sins Forums
downloaded the client and buyed it over the hp