Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Lawrence W. Gallick

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

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CHARACTER.AI SUED IN TWO STATESCharacter Technologies has been hit with two lawsuits, including a wrongful death suit (among other claims), in less than two months over its popular Character.ai chatbot. The first was filed in the U.S. District Court for the Middle District of Florida (<a href="https://d34mgxl0pedajf.cloudfront.net/wp-content/uploads/2024/10/FILED-COMPLAINT_Garcia-v-Character-Technologies-Inc-1.pdf" target="_blank">Garcia v. Character Technologies Inc.</a>) by the mother of a Florida teenager who <a href="https://www.fastcompany.com/91215310/character-ai-app-lawsuit-legal-complaint-teen-suicide-chatbot-google" target="_blank">tragically committed suicide</a> after the chatbot allegedly encouraged the child to do so. The Plaintiff claims her son became instantly addicted to Character.ai and “fell in love” with the bot, leading to drastic behavioral changes such as sleep deprivation, school-related issues, and low self-esteem, which culminated in the child’s death. Just a few weeks later, two plaintiffs in Texas <a href="https://www.documentcloud.org/documents/25450619-filed-complaint/" target="_blank">filed suit</a> alleging that Character.ai <a href="https://www.npr.org/2024/12/10/nx-s1-5222574/kids-character-ai-lawsuit" target="_blank">abused the plaintiffs’ children</a> by exposing them to hypersexualized content, encouraging self-harm, and suggesting they should kill their parents. Both suits allege that the Character.ai chatbot is intentionally designed in a way that exploits minors by simulating human interaction, creating emotional dependence, and failing to implement safeguards against misuse. Given that these are the first major cases to seek damages related to anthropomorphized AI tech, it will be interesting to see whether juries find Character.ai liable, as this could spawn waves of similar lawsuits.MAJOR RECORD LABELS PETITION SUPREME COURT OVER VERDICT REVERSALThree of the world’s largest entertainment companies—Sony Music, Warner Music, and Universal Music—have <a href="https://tmsnrt.rs/3SX6Do2" target="_blank">petitioned the U.S. Supreme Court</a> to reconsider an appellate ruling that wiped out a $1 billion jury verdict in their suit against internet service provider Cox Communications. In 2019, a <a href="https://www.reuters.com/article/lifestyle/cox-to-pay-1-billion-to-music-labels-publishers-over-piracy-infringement-idUSKBN1YO0DE/" target="_blank">Virginia jury</a> found Cox liable for rampant music piracy by the company’s customers and failure to act despite receiving thousands of infringement notices. The verdict was <a href="https://business.cch.com/ipld/SonyMusicEntmtCoxComms4C20240220.pdf" target="_blank">overturned</a> earlier this year by the U.S. Court of Appeals for the 4th Circuit, which confirmed the jury’s finding of willful contributory infringement, but called for a new trial on damages because Cox did not directly profit from the piracy. Unsurprisingly, the plaintiffs appealed, and it appears the Supreme Court is poised to take the case. In a <a href="https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/24-181.html" target="_blank">one-sentence order</a>, the High Court has invited the solicitor general to file a brief expressing the views of the United States. This is a strong indication that the Court is interested in hearing the case. With a new administration set to take the reins in Washington next month, it seems likely that appellate attorney <a href="https://www.scotusblog.com/2024/11/trump-taps-lawyer-who-argued-his-immunity-case-for-solicitor-general/" target="_blank">D. John Sauer</a> will be solicitor general. Sauer’s disposition toward IP cases is tough to predict, as his work has largely focused on hot-button social issues. A brief in the case may give insight into Sauer’s positions on copyright law and corporate liability.X CLAIMS OWNERSHIP OF ALEX JONES ACCOUNTThe asset liquidation of Alex Jones’s <a href="https://storage.courtlistener.com/recap/gov.uscourts.txsb.459750/gov.uscourts.txsb.459750.882.0_1.pdf" target="_blank">intellectual</a> and tangible property in the bankruptcy proceeding following the $1.5 billion <a href="https://www.statesman.com/story/news/politics/state/2024/06/06/timeline-lawsuits-alex-jones-sandy-hook-shooting-infowars-false-claims/73985486007/" target="_blank">defamation judgment</a> against him has hit an unusual speedbump. At issue is Jones’s X account. With its 3.4 million followers, the account is among the highest-profile IP assets on the auction block. But here’s the thing: X has <a href="https://storage.courtlistener.com/recap/gov.uscourts.txsb.459750/gov.uscourts.txsb.459750.937.0.pdf?ref=404media.co" target="_blank">filed an objection</a> claiming that the account belongs to it, not Jones, and is therefore exempt from an asset sale. This raises several interesting questions and a judgment either way could have wide-ranging implications for all social media platforms. Though X’s <a href="https://x.com/en/tos" target="_blank">Terms of Service</a> state that users maintain ownership of “any Content you submit, post or display on or through the Services,” the terms do not explicitly define who actually owns the account. An ownership argument in this context is unusual. We’ve been <a href="/topics/owned-second-circuit-holds-that-traditional-principles-of-property-law-apply-to-social-media-accounts" target="_blank">covering</a> social media account ownership issues <a href="/topics/social-links-social-media-account-ownership-once-again-in-the-spotlight" target="_self">for years</a> and in the majority of cases the conflict is between employee/employer or company/consultant. X may very well prevail in this action. Users own their content, but the account itself will likely be seen as an extension of a user’s license to access and use the platform’s services. We’ll be following this one very closely.X LAWSUIT AGAINST ISRAELI DATA SCRAPING FIRM REVIVEDIt appears that Israeli firm Bright Data will be back in court facing an amended version of a complaint from X that was <a href="https://casetext.com/case/x-corp-v-bright-data-ltd-1" target="_blank">dismissed last May</a>. As we <a href="/topics/california-federal-court-holds-x-s-claims-against-scraper-preempted-by-federal-law" target="_self">reported in June</a>, X alleged that Bright Data’s scraping and selling of data from X violated the social media giant’s Terms of Service and the U.S. District Court for the Northern District of California held that X’s claims were preempted by federal copyright law. Though the court declined to allow amendments related specifically to Bright Data’s scraping operations, it granted X’s motion for leave to amend the company’s trespass to chattels claims and fraudulent business acts allegations. Judge William H. Alsup ruled that X’s updated complaint sufficiently alleges that Bright Data improperly accessed X’s servers, writing: “X Corp. newly alleges that scrapers traverse the X service in patterns markedly different from humans or authorized machines, that scrapers thus use underlying server capacity in abnormal proportions, and that this results in intermittent, isolated server failures and a ‘glitchy, lagged user experience’ for X’s human users.” Judge Alsup added that X also properly alleged that if it hadn’t purchased “millions of dollars of server capacity,” the alleged scraping would have resulted in “catastrophic system failures,” concluding that, with these revised allegations, “X Corp.’s proposed complaint now sufficiently alleges server impairment from scrapers accessing its service. . . Bright Data does not contest that if X Corp. states trespass to chattels as to data scrapers, it plausibly does so as to Bright Data, too. This order will assume as much.” You can read Judge Alsup’s thorough, and surprisingly entertaining, <a href="https://www.courtlistener.com/docket/67637345/156/x-corp-v-bright-data-ltd/" target="_blank">ruling</a>. Now that this case is set to move forward, we’ll see if it will have wider implications on the legalities of data scraping and platform protection.META PREVAILS IN IMMUNITY SUITUniversity of Massachusetts Amherst professor <a href="https://en.wikipedia.org/wiki/Ethan_Zuckerman" target="_blank">Ethan Zuckerman</a> has lost his bid for immunity from potential lawsuits alleging breach of contract and violation of federal criminal computer fraud laws related to his “Unfollow Everything 2.0” browser extension. The extension is designed to allow users to turn off the newsfeeds assembled for them by Facebook’s algorithms with one click, blocking unwanted content and advertisements. Unfollowing functionality is already in place on Facebook but requires unfollowing groups and pages individually. In the <a href="https://casetext.com/case/zuckerman-v-meta-platforms-inc" target="_blank">November 22 ruling</a>, Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California wrote that Zuckerman’s “alleged injury is too contingent upon uncertain events to satisfy the constitutional ripeness requirement” and that the request for relief is too speculative because Zuckerman has not actually released the browser extension. Last May, Zuckerman filed a <a href="https://knightcolumbia.org/documents/gu63ujqj8o" target="_blank">preemptive suit</a> against Meta requesting immunity under Section 230, asking the court to declare that his extension would not violate Facebook’s <a href="https://www.facebook.com/legal/terms?_rdr" target="_blank">Terms of Service</a> or federal computer fraud laws, but this action was also rejected. The current case was dismissed without prejudice, so Zuckerman could refile it if he ever releases the Unfollow Everything 2.0 extension, but after two court losses, he faces significant headwinds.UBER’S ARBITRATION CLAUSE UPHELD BY APPEALS COURTIn a <a href="https://aboutblaw.com/bgm7" target="_blank">5–2 decision</a>, the New York Court of Appeals has ruled that a plaintiff’s legal claims against Uber must go through arbitration—even though her action was currently pending before a court. The ruling stems from a November 2020 lawsuit brought by plaintiff Emily Wu, who originally agreed to a prior version of Uber’s Terms of Service without mandatory arbitration. Uber amended its <a href="https://www.uber.com/legal/en/document/?name=general-terms-of-use&country=united-states&lang=en" target="_blank">Terms of Service</a> in January 2021, updating its mandatory arbitration clause, which Wu agreed to.At the heart of the case is the plaintiff’s argument that the arbitration clause should not apply to claims pending in court, even though the amended Terms of Service purported to apply to “any claims” without limitation. Among other things, Wu claimed that Uber’s notice to Wu violated <a href="https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_4_2_communication_with_person_represented_by_counsel/" target="_blank">Rule 4.2 of the Rules of Professional Conduct</a> for attorneys, which bars the other party in a pending lawsuit from directly contacting a party they know is represented by counsel. The Court of Appeals <a href="https://www.reuters.com/legal/government/column-uber-clickwrap-contract-gets-blessing-nys-top-court-theres-twist-2024-11-26/" target="_blank">disagreed with Wu</a>, maintaining that (a) a mass email notification sent by Uber clearly explained there would be changes to the arbitration agreement and that Wu entered into a contract when she agreed to the revised terms; (b) Uber did not know that Wu was represented by counsel when it sent the mass notice; and (c) even if the claim had merit, Wu’s requested remedies were too extreme and she did not even ask for the more targeted and sensible remedy of simply voiding the arbitration agreement and allowing the dispute to move forward in court.In his majority opinion, Judge Anthony Cannataro wrote, “For essentially as long as there have been written contracts, parties have entered them without first carefully reviewing their terms. That failure can have legal consequences, whether the party is a sophisticated entity or an ordinary consumer, and whether the contract is presented on paper or through an electronic pop-up window.”

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions.











Anthony Ramirez

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

Character Technologies has been hit with two lawsuits, including a wrongful death suit (among other claims), in less than two months over its popular Character.ai chatbot. The first was filed in the U.S. District Court for the Middle District of Florida (Garcia v. Character Technologies Inc.) by the mother of a Florida teenager who tragically committed suicide after the chatbot allegedly encouraged the child to do so. 

On September 25, 2024, the U.S. Court of Appeals for the First Circuit issued its decision in <a href="https://law.justia.com/cases/federal/appellate-courts/ca1/23-1727/23-1727-2024-09-25.html" target="_blank">Toth v. Everly Well, Inc.</a> Socially Aware spoke to Lawrence Gallick (of counsel in Morrison Foerster’s Austin office) about the case for a deeper dive into this interesting ruling.SA: Can you give us a brief overview of the case details and why it caught your interest?LWG: Sure. On the surface, it’s just another run-of-the-mill clickwrap/arbitration case, but one with some interesting nuances.The defendant, Everly Well, Inc. (“Everlywell”), sells food sensitivity test kits. Joyce Toth purchased an at-home lab test on a third party retailer’s website for $119.99. Following the instructions on the box, which stated that an online account with Everlywell was required to send in her sample for testing, she created an account. During this process, she clicked a mandatory checkbox indicating that she “read and accept[ed]” Everlywell’s terms of service (she could not submit the form without checking it). When she received her food sensitivity test results back, they made no sense to her since they indicated she was sensitive to eggs, whereas she regularly and recently had eaten eggs with no trouble. Turns out that (allegedly) the test actually measured foods that had been recently eaten, instead of (as advertised) sensitivities to foods. Toth was displeased and filed a class action claim against Everlywell for deceptive marketing practices.SA: That seems pretty straightforward. Did the court address the underlying deceptive marketing claim, or was it limited to arbitration enforceability?LWG: The case is about the enforceability of the arbitration clause, not the merits of the underlying deceptive marketing claim, which are not addressed (since arbitrability is a threshold question). Following the typical fact pattern for these cases, Everlywell moved to compel arbitration pursuant to its terms of service. Toth argued that the arbitration provisions in the Everlywell terms of service were not binding on her for several reasons, including (among other challenges) lack of consideration, lack of notice and assent, and that the contract was illusory due to its unilateral modification clause. The district court didn’t find these arguments compelling and rejected her arguments, so Toth appealed.SA: Which brings us to today. What was the basis of First Circuit’s ruling?LWG: The court found that Toth had both been given reasonable notice of the terms and reasonably manifested assent to those terms. On Everlywell’s account creation page, Toth had to enter some basic information (name, email, and password), below which was a checkbox with text next to it reading “I have read and accept the Terms and Conditions,” where “Terms and Conditions” was a hyperlink displayed in green, setting it off from the rest of the black text. Underneath this verbiage was a green button with the text “Create My Account.” Relying on Massachusetts precedent, the court reasoned that, while Toth was not required to read the terms to proceed (and in fact, she attested that she did not read the terms), the requirement to click a checkbox put Toth on notice that she was entering into a contract and also was a required affirmative action, satisfying the assent requirement under Massachusetts law.SA: Sounds like they drew a sharp line between clickwrap and browsewrap terms in their discussion of Massachusetts precedent.LWG: They did. Toth’s claims that the higher standard under Massachusetts law for binding a user to arbitration applied here were rejected by the court, which noted that, among other things, the precedents cited by Toth dealt with “browsewrap” agreements, which did not require the affirmative acts I mentioned earlier.The court also rejected Toth’s claim that she did not “meaningfully” assent to the terms because she had no ability to get the benefit of the test she had already purchased without completing the registration process. As noted by the court, Toth purchased the test kit from a third-party retailer, not Everlywell, and the box clearly stated that registration and acceptance of Everlywell’s terms are required to obtain test results.SA: Did unilateral modification clauses enter into this somewhere? They seem to be a factor in many of these cases.LWG: Yes. The court rejected Toth’s claim that Everlywell’s right to unilaterally modify its terms of service made those terms an illusory contract, an interesting issue in light of <a href="https://www.sociallyawareblog.com/topics/240920-district-court-unilateral-modification-clause" target="_blank">our recent coverage of the Lovinfosse case</a> in the U.S. District Court for the Eastern District of Virginia (which is part of the Fourth Circuit, not the First Circuit as in Toth). Citing First Circuit precedent, the court in Toth noted that since the unilateral modification power was not used by Everlywell to modify the arbitration clause, the unilateral modification clause had no impact on whether arbitration was required – in fact, the court noted that this “is a subject for an arbitrator and not a court.” It is unclear whether Everlywell has since changed its unilateral modification clause (the current version, which was modified in March 2024, appears in <a href="https://www.everlywell.com/terms-of-use/" target="_blank">Section 8</a>, but it would be interesting to know if and how the court’s reasoning in Toth squares with Lovinfosse.SA: So the First Circuit and the Fourth Circuit may be at odds?LWG: It remains to be seen. Although the current Everlywell terms contain an obligation for Everlywell to “endeavor” to notify the user of “material changes” (as opposed to the clause in Lovinfosse, which didn’t require legal notice at all), the terms still purport that the changes are effective regardless of notice (as in Lovinfosse). Would the Lovinfosse court enforce the Everlywell terms? Will we ever know?SA: One last question. Which is the better album – Double Nickels on the Dime by The Minutemen, or Zen Arcade by Hüsker Dü?LWG: Please don’t ask me idiotic questions like this. It’s self-evident that they’re each watershed releases by legendary groups at the height of their power. Owning both in multiple formats is the only correct choice. Also, it’s just “Minutemen,” not “The Minutemen.” Are we done here?

Lawrence W. Gallick on Toth v. Everly Well, Inc.

On September 25, 2024, the U.S. Court of Appeals for the First Circuit issued its decision in Toth v. Everly Well, Inc. Socially Aware spoke to Lawrence Gallick (of counsel in Morrison Foerster’s Austin office) about the case for a deeper dive into this interesting ruling.

On August 8, 2024, the U.S. District Court for the Eastern District of Virginia in <a href="https://scholar.google.com/scholar_case?case=17363838191298839802&q=Lovinfosse+v.+Lowe%27s+Home+Centers,+LLP&hl=en&as_sdt=20006&as_vis=1" target="_blank">Lovinfosse v. Lowe’s Home Centers, LLP</a> addressed the enforceability of an arbitration clause in Lowe’s terms of service, serving as a reminder of the problems that may arise from terms of service (TOS) language allowing unilateral modifications. The plaintiff, Eleanor Lovinfosse, alleged that the retailer’s use of <a href="https://www.gov.uk/government/publications/online-choice-architecture-how-digital-design-can-harm-competition-and-consumers" target="_blank">Online Choice Architecture (OCA)</a> led her to purchase a water hose labeled as “Required for Use” while buying a washing machine online. Lovinfosse later discovered the washing machine came with all necessary parts, rendering the additional purchase unnecessary. She subsequently filed a class action lawsuit against the retailer, alleging deceptive practices.Lowe’s maintained the dispute is subject to the arbitration requirement in its TOS; arguing that Lovinfosse agreed to the terms by clicking the “Place Order” button during checkout.Directly below the “Place Order” button, hyperlinked text states: “By placing an order, I agree to Lowe’s Terms and Privacy Statement.” This allows users to reference the <a href="https://www.lowes.com/l/about/terms-and-conditions-of-use" target="_blank">full text of the terms</a> if they click the link. Lovinfosse did not click on the hyperlinked terms and asserted that she was not aware of their contents, including the arbitration clause.The court agreed with the defendant on this point, reasoning that based on the layout and language of the website, Lovinfosse had constructive notice of the terms and had manifested assent by moving forward with the order.The court then turned its analysis to the unilateral modification clause within the TOS, which stated:“You agree that Lowe’s may change, terminate, modify, add, end or delete any of these terms and conditions (including, without limitation, the Terms) under which the Site is offered at any time and without notice to you. Lowe’s, in its sole and absolute discretion, reserves the right to update, change, terminate, suspend, modify, add, end or delete any of these Terms . . . , in whole or in part, at any time with or without notice.”Although the arbitration clause existed as part of the TOS at the time Lovinfosse agreed to them, the unilateral modification clause purported to allow the retailer to change its terms at any time and without notice. The court concluded that, while Lovinfosse may have agreed to the TOS, the unrestricted ability to modify the terms without notice made the arbitration clause illusory and unenforceable.The court further reasoned that a customer who makes a single transaction would have no way of knowing if the terms had changed unless they constantly checked the website, highlighting that the lack of required notice distinguished this case from others where unilateral modification clauses were upheld.The court’s reasoning in Lovinfosse is reminiscent of the conclusions drawn in <a href="https://casetext.com/case/harris-v-blockbuster-inc" target="_blank">Harris v. Blockbuster Inc.</a>, a Northern District of Texas decision from 2009. In that case, the court similarly held that the unilateral modification clause in Blockbuster’s online terms of use rendered the arbitration clause illusory and unenforceable. The court reasoned that Blockbuster could, in theory, unilaterally modify the arbitration provisions and apply those modified provisions to earlier disputes.The case law regarding unilateral modification in online terms has shifted over the years. After Harris, unilateral modification requirements appeared to loosen, as evidenced by the 2014 San Francisco Supreme Court decision in <a href="https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=1656&context=historical" target="_blank">Rodriguez v. Instagram</a>. In Rodriguez, Instagram’s terms stated that users would be notified of material changes to the terms, and the meaning of “material change” would be determined at Instagram’s sole discretion.Though Instagram had sole discretion to determine when to give notice of a change in its terms, the court upheld the unilateral modification of its terms of use – noting that Instagram had in fact provided reasonable advance notice via email and that continued use of the service constituted Rodriguez’s acceptance of the new terms.More recently, decisions like <a href="https://casetext.com/case/sifuentes-v-dropbox-inc-1" target="_blank">Sifuentes v. Dropbox</a> have permitted unilateral modification but made it much harder to meet the requirement for giving notice. In Sifuentes, the United States District Court for the Northern District of California reviewed Dropbox’s ability to enforce amendments to its terms, which contained a notice provision that was similar to Instagram’s. The court held that Dropbox could not enforce its amended TOS because it failed to show that the plaintiff’s continued use of the service was conditioned on agreement to the amendments.The court found that the plaintiff also didn’t have actual notice of the modified terms because Dropbox did not show that the plaintiff had read the email notifications of the amendments. The Sifuentes court further characterized the provision as “essentially disavow[ing] any obligation to alert [users] to changes.” This decision underscored practical challenges of meeting the necessary notice standard, but these cases did not focus on or require the Harris standard of only enforcing unilateral amendment provisions where the terms themselves required the provider to give notice (presumably in addition to such notice being given where applicable to the case’s facts).Lovinfosse appears to mark a return to the stricter stance seen in Harris, serving as a reminder of the limitations and potential pitfalls of unilateral modification clauses in TOS. While the court acknowledged that the plaintiff had agreed to the terms, the ability to change those terms without notice made the arbitration clause illusory and unenforceable.In many ways, this is a frustrating standard for companies that have followed best practices when implementing enforceable terms, only to face the risk that agreed upon contractual terms which have not changed might be declared unenforceable simply because they could change. As companies navigate the complexities of digital contracts, Lovinfosse underscores the necessity of transparency in consumer agreements.

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Associate

Tricia Matibag is an associate in the Boston office of Morrison Foerster and a member of the firm’s Technology Transactions Group.

Tricia Matibag

Lose Your Illusion: District Court Holds that Unilateral Modification Clause Makes ToS Unenforceable

Double-check before swiping right. Ubiquitous dating app Tinder scored a court victory when the U.S. District Court in New Jersey ruled in <a href="https://law.justia.com/cases/federal/district-courts/new-jersey/njdce/2:2023cv23115/537965/12/" target="_blank">Ciapinska v. Tinder</a> that the arbitration clause in the app’s terms of use (TOU) is binding. At the center of the suit is Tinder’s <a href="https://www.help.tinder.com/hc/en-us/articles/360034941812-Photo-Verification" target="_blank">photo verification</a> process. The plaintiff <a href="https://bronx.news12.com/elmwood-park-nj-woman-suing-tinder-claims-photos-being-used-fake-accounts" target="_blank">brought the action in late 2023</a> when she discovered that a number of fake accounts, which had passed Tinder’s verification protocol, were using her photos – even though she left the platform in 2019. In the ruling, Judge Jamal K. Semper wrote, “[Plaintiff] created numerous accounts and even purchased a subscription indicating sufficient opportunity to consult and assent to the TOU before continuing to use the platform.” Tinder maintains that its verification tool is not a guarantee.TikTok finds itself facing a federal lawsuit over the <a href="https://www.independent.co.uk/news/world/americas/crime/tiktok-blackout-challenge-nyla-anderson-b1980820.html" target="_blank">tragic death</a> of a ten-year-old girl who passed away while attempting the viral “blackout challenge.” The challenge dares users to choke themselves to unconsciousness and stream the act on TikTok. The deaths of <a href="https://www.bloomberg.com/news/features/2022-11-30/is-tiktok-responsible-if-kids-die-doing-dangerous-viral-challenges" target="_blank">more than a dozen children</a> have been linked to the viral trend. TikTok parent company ByteDance maintained that Section 230 immunized it from liability, but <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/mopaqabzypa/08272024tiktok.pdf" target="_blank">three federal judges disagreed</a>. U.S. Circuit Judge Patty Shwartz wrote that Section 230 only immunizes information provided by third parties, not recommendations that TikTok itself made via an algorithm underlying its platform, adding: “TikTok makes choices about the content recommended and promoted to specific users, and by doing so, is engaged in its own first-party speech.” This begs a question: Does any effort to curate the presentation of third-party content automatically make it first-party content and therefore not protected under Section 230?Dupe.com, a startup search tool that scrapes the web for knockoff versions of name-brand products at steep discounts, is <a href="https://www.bloomberglaw.com/public/desktop/document/WilliamsSonomaIncvCarrotCartIncdbaDupecomDocketNo124cv06597SDNYAu?doc_id=X1965IOOO1191OA3O1STJOT2OF2" target="_blank">being sued</a> by home retail colossus Williams-Sonoma. The complaint, which was filed in the U.S. Court for the Southern District of New York, maintains that <a href="https://dupe.com/" target="_blank">Dupe.com</a> illegally used furniture images made by the Williams-Sonoma creative team to promote its online search tool and craft social media ads disparaging the William-Sonoma family of brands. The lawsuit asserts claims for copyright infringement, false advertising, unfair competition, and deceptive trade practices. With the <a href="https://businessofhome.com/articles/furniture-dupes-kim-kardashian-donald-judd-knockoffs#:~:text=Dupe.com%20can%20absolutely%20be,nothing%20clandestine%20about%20that%20functionality." target="_blank">proliferation of dubious online retailers</a> offering counterfeit versions of premier products, we’ll be watching this litigation closely.A <a href="https://www.dailycal.org/news/state/sb-976-approved-aims-to-protect-kids-from-social-media-addiction/article_59dd5e9c-6a6d-11ef-b6f1-87863c2fb22d.html" target="_blank">California bill</a> designed to stop social media companies from using algorithms to target minors has passed the state legislature and is headed to Governor Gavin Newsom’s desk. The legislation is similar to laws <a href="https://www.democratandchronicle.com/story/news/2024/06/10/ny-passes-ban-on-addictive-social-media-for-children-how-it-works/74043024007/" target="_blank">recently passed in New York</a> and could mark the beginning of a significant shift in social media policy across the United States. If the Governor signs <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB976" target="_blank">the bill</a>, social media companies would be prohibited from providing an algorithm-driven social media feed to anyone younger than eighteen in the state of California. It would also ban social media notifications during school hours and at night without prior parental consent. Proponents of the bill feel legislation is necessary to protect children, while critics maintain the law will be difficult to enforce and could be susceptible to misuse.Everyone’s mom’s favorite soft rock icon, Barry Manilow, <a href="https://variety.com/2024/music/news/barry-manilow-sues-hipgnosis-unpaid-funds-1236129154/" target="_blank">has sued</a> Hipgnosis Songs Fund, a music IP investment and song management company that acquired the Manilow catalog in 2020. The suit alleges that Hipgnosis has not paid more than $1 million in contractually obligated bonus payments. Manilow sold the song catalog to Hipgnosis based on promises that the company would exploit social media and spark a <a href="https://www.tiktok.com/@dinandtonics/video/7375244202457845038" target="_blank">“Copacabana” dance trend</a> on TikTok. To the surprise of no one (except perhaps Mr. Manilow), this did not happen. Instead, Hipgnosis hemorrhaged cash after a number of <a href="https://www.forbes.com/sites/marisadellatto/2023/01/24/justin-bieber-sells-music-rights-for-over-200-million-to-hipgnosis-songs-capital/" target="_blank">high-profile catalog acquisitions</a> and was sold to Blackstone in July 2024. Social media and music streaming have confounded the old guard of the music industry as they’re eclipsed by younger, more tech-savvy artists who have a deeper understanding of the contemporary music business landscape. Despite the nearly identical names, Hipgnosis Songs Fund is not related to the art collective Hipgnosis that designed all your <a href="https://wimwords.com/the-hipgnosis-album-cover-gallery/" target="_blank">favorite 1970s album covers</a>.

Social Links: Tinder, TikTok, and the Copacabana

Social Links: Tinder, TikTok, and the Copacabana

Double-check before swiping right. Ubiquitous dating app Tinder scored a court victory when the U.S. District Court in New Jersey ruled in Ciapinska v. Tinder that the arbitration clause in the app’s terms of use (TOU) is binding.

On May 9, 2024, in <a href="https://casetext.com/case/x-corp-v-bright-data-ltd-1" target="_blank">X Corp. v. Bright Data Ltd</a>., the U.S. District Court for the Northern District of California dismissed X’s claims alleging that Bright Data’s access to X’s systems, and scraping and selling of publicly available data from X’s platform, violated its Terms of Service and other policies. Bright Data’s business involves various data scraping products and services, such as scraping data on behalf of its customers, selling tools that enable customer to scrape data, and providing IP proxies for customers to use when scraping data.As an initial matter, the court divided its analysis in two, first looking at X’s claims based on Bright Data’s improper access to X’s systems and then at X’s claims based on Bright Data’s scraping and selling of X’s data. The court easily dismissed the claims based on improper access to X’s systems, including claims for trespass to chattels, violation of California Section 17200 (prohibiting unlawful, unfair and fraudulent business acts), tortious interference with contract, and breach of contract. There was nothing particularly surprising in the court’s analysis of these claims, since the dismissals primarily resulted from X’s failure to plead adequate damages arising from Bright Data’s allegedly improper access.The more interesting aspect of Bright Data came next, where the court considered X’s claim that Bright Data’s scraping and selling of data violated X’s Terms of Service and held that X’s claims were preempted by federal copyright law.Section 301(a) of the Copyright Act states that federal copyright law preempts state-law claims when a plaintiff’s work “come[s] within the subject matter of copyright” and state law grants “legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright.” The court in Bright Data noted that there are two types of copyright preemption: (i) express preemption with respect to state law rights that are “equivalent” to federal copyright rights, and (ii) conflict preemption, where enforcement of the state law would more generally undermine the purpose of federal copyright law. The court in Bright Data focused on this second type of preemption.Under X’s Terms of Service, users retain ownership of the images, text, and other content that they upload to the X platform, and grant X a broad, non-exclusive, royalty-free license to display users’ content on the X platform and to use that content in various other ways, including by disseminating the user content through X’s paid tools. The Terms of Service also prohibit scraping and selling any content from the X platform.As a first step in its preemption analysis, the court notes that, under the Terms of Service, X does not own the user content that Bright Data scraped and sold, and X merely has a non-exclusive license to use the content. Under federal copyright law, a non-exclusive licensee is permitted to use the licensed works within the scope of the license, but has no right to enforce the copyright in, or exclude others from using, the works. Despite this, the claims that X asserted in Bright Data sought to enforce contractual terms that would give X the ability to exclude others from using the content in a manner that would otherwise be available only to the owner (or, possibly, the exclusive licensee) of the copyright in the content, not to a mere non-exclusive licensee.(As an aside, the court speculates that the reason that X does not require users to assign ownership of their content to X, or grant X an exclusive license to use content, under its Terms of Service is because this would impact X’s ability to claim the benefit of the safe harbors under Section 512(a) of the Digital Millenium Copyright Act and Section 230 of the Communications Decency Act, two federal statutes that protect website operators from liability arising from content posted by users. The court notes: “X Corp. wants it both ways: to keep its safe harbors yet exercise a copyright owner’s right to exclude, wresting fees from those who wish to extract and copy X users’ content.” In fact, it is not necessarily true that the availability of these statutory safe harbors turns on whether the website operator holds title (or an exclusive license) to the user content at issue. The more likely reason that X does not claim ownership of user content is that doing so would be viewed as overreach and result in significant backlash among its users. But as this issue is not central to the copyright preemption analysis, we leave it for another day.)The court then goes on to hold that X’s claim that Bright Data breached the Terms of Service by scraping and selling user content is preempted by federal copyright law in three ways, namely that enforcement of X’s contractual rights would:<ol class="li-text-orange"><ol class="li-text-orange"><ol class="li-text-orange"><li>Interfere with copyright owners’ exclusive rights and frustrate federal copyright law, since allowing X to enforce its Terms of Service would give it, a non-exclusive licensee, the ability to exclude others from exercising those rights;</li><li class="li-text-orange">Frustrate the operation of fair use, which would (absent a contract preventing it) allow use of the user content for certain permitted purposes (note that, as <a href="https://blog.ericgoldman.org/archives/2024/05/x-corp-v-bright-data-is-the-decision-weve-been-waiting-for-guest-blog-post.htm">observed</a> by guest blogger Guy Rub in Eric Goldman’s blog, the court seems to treat fair use as something akin to an affirmative right, rather than as the affirmative defense to an infringement claim that it actually is); and</li><li>Restrict use of type of information that Congress intended to keep free from restraint, namely uncopyrightable items such as likes, user names, short comments, etc. (It is not entirely clear how this can form a basis for preemption given that these items fall outside the scope of copyright law … but we digress.)</li></ol></ol></ol>Overall, the court presents an interesting new addition to web scraping law, one not addressed in a case that the court still found six occasions to cite, <a href="https://law.justia.com/cases/federal/appellate-courts/ca9/17-16783/17-16783-2019-09-09.html" target="_blank">hiQ Labs, Inc. v. LinkedIn Corp</a>. (see one of our <a href="https://www.sociallyawareblog.com/topics/ninth-circuits-linkedin-decision-does-not-greenlight-the-unauthorized-web-scraping-of-public-websites" target="_blank">previous articles</a> on that case). In light of Bright Data, website operators should be aware that contractual prohibitions contained in terms of service may not be effective to prevent scraping of user content that they make publicly available.

California Federal Court Holds X’s Claims Against Scraper Preempted by Federal Law

California Federal Court Holds X’s Claims Against Scraper Preempted by Federal Law

On May 9, 2024, in X Corp. v. Bright Data Ltd., the U.S. District Court for the Northern District of California dismissed X’s claims alleging that Bright Data’s access to X’s systems, and scraping and selling of publicly available data from X’s platform, violated its Terms of Service and other policies.

In <a href="https://cdn.ca9.uscourts.gov/datastore/opinions/2020/10/21/19-55204.pdf" target="_blank" rel="noopener noreferrer">Stover v. Experian Holdings</a>, the Ninth Circuit decided an issue of first impression for the circuit, holding that a party’s single visit to a website four years after her original visit—when she agreed to an online contract containing a change-of-terms provision—is not enough to bind her to an arbitration provision that she wasn’t aware of and that appeared in a later version of the contract.The panel held “a mere website visit after the end of a business relationship” is not enough “to bind parties to changed terms in a contract pursuant to a change-of-terms provision in the original contract.”In something of a departure from the typical case involving modification of an online contract, the plaintiff in the case, Rachel Stover, asserted that the updated arbitration provision did apply, while the defendant website operator, Experian, argued that the parties remained subject to the original terms.Ms. Stover is a consumer who bought a credit score service from Experian’s website in 2014. At that time, she agreed via a click acceptance to the website’s then-current terms of service, which stated that claims arising out of the transaction were subject to arbitration and contained a class action waiver.Stover cancelled the agreement a month later.Four years after that, in 2018, Stover visited Experian’s website just one time. At that point the website’s terms and conditions had been updated to exclude from the arbitration provision cases “arising out of or relating to the Fair Credit Reporting Act (FCRA) or other state or federal laws relating to the information contained in your consumer disclosure or report, including but not limited to claims for alleged inaccuracies in your credit report or the information in your credit file.”The next day Stover brought a putative class action against Experian alleging—among other things—that the company violated the FCRA. Experian moved to compel arbitration of Stover’s claims.The Central District of California granted Experian’s motion to compel arbitration, but it did so based on the 2018 arbitration provision that contained the carve-out for FCRA claims rather than on the original 2014 provision that did not include the carve-out. The district court held that the 2018 terms applied because “the plain language of the 2014 terms . . . assumed assent” to the updated terms based on Stover’s subsequent use of Experian’s website, but that her claims were not within the FCRA carve-out in the updated arbitration provision because the claims did not arise out of “information contained in [her] consumer disclosure or report.”The district court also rejected Stover’s argument that the arbitration provision was unenforceable under <a href="https://casetext.com/case/mcgill-v-citibank-na-6" target="_blank" rel="noopener noreferrer">McGill v. Citibank</a>, which held that a contract that waives a person’s right to seek public injunctive relief in court is invalid under California law. According to the court, McGill did not apply because Stover was not seeking public injunctive relief.On appeal, Experian argued that the version of the terms of use that appeared on Experian’s website in 2018 did not apply because Stover “had no opportunity to review the new terms before visiting the website and becoming bound by them.”Stover, on the other hand, argued that the district court was correct in applying the website’s 2018 terms, but mistaken when it failed to enforce the McGill rule because Stover was, in fact, seeking injunctive relief.The Ninth Circuit panel held that the 2014 arbitration provision, which did not include the FCRA carve out, applied. In order to bind parties to new terms pursuant to a change-of-terms provision consistent with basic principles of contract law, the panel held, both parties must have notice that the terms have changed and have had an opportunity to review the changes. Stover did not have such notice or opportunity to review the 2018 terms, so the updated terms did not apply to her.The panel then went on to hold that the 2014 arbitration provision was not unenforceable under McGill, because “the arbitration agreement does not flatly prohibit a plaintiff seeking public injunctive relief in court” and that Stover did not allege the requisite “Article III standing to bring such a claim.”Accordingly, the Ninth Circuit panel affirmed the district court’s holding that Stover was required to arbitrate her claims against Experian.

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Role Reversal: Ninth Circuit Rejects Consumer’s Attempt to Enforce Updated Arbitration Provision in Website Terms of Use

Role Reversal: Ninth Circuit Rejects Consumer’s Attempt to Enforce Updated Arbitration Provision in Website Terms of Use

In Stover v. Experian Holdings, the Ninth Circuit decided an issue of first impression for the circuit, holding that a party’s single visit to a website four ye

Online service providers typically seek to mitigate risk by including arbitration clauses in their user agreements. In order for such agreements to be effective, however, they must be implemented properly. <a href="https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=3201&context=historical" target="_blank" rel="noopener noreferrer">Babcock vs. Neutron Holdings, Inc</a>., a recent Southern District of Florida case involving a plaintiff who was injured while riding one of the defendant’s Lime e-scooters, illustrates that courts will closely scrutinize the details of how an online contract is presented to users to determine whether or not it is enforceable.As we have noted, online contracts are more likely to be enforced where (1) the terms are conspicuously displayed so that users have notice of them, and (2) users are required to take some affirmative action (e.g., checking a box or clicking a button) to indicate acceptance of the terms.In Babcock, the relevant terms were provided to users within the Lime App, a smartphone application that users must download before renting a Lime e-scooter. After downloading the app, the user is prompted to create an account. During account creation, the user is prompted to agree to Lime’s User Agreement and Terms of Service.We have often <a href="https://www.sociallyawareblog.com/2020/06/01/court-discovers-rare-and-elusive-enforceable-browsewrap/" target="_blank" rel="noopener noreferrer">expressed skepticism</a> of courts’ penchant for categorizing online contracts into one or another variety of “-wrap” contract – e.g., “browsewraps,” “clickwraps,” “scrollwraps,” “hybridwraps,” etc. In this case, after analyzing the user interface, the court characterized the Lime User Agreement as a “sign-wrap” agreement, citing <a href="https://casetext.com/case/selden-v-airbnb-inc-1" target="_blank" rel="noopener noreferrer">Selden v. Airbnb, Inc</a>. According to the Babcock court, a sign-wrap agreement exists where “a user signs up to use an internet product or service, and the sign-up screen states that ‘acceptance of a separate agreement is required before the user can access the service’.”The court spent some time analyzing the details of the Lime app’s user interface, a screenshot of which is included in the published opinion:<figure style = "float: none;;width: 185%;max-width:100%;"><img src="https://media2.mofo.com/v3/images/blt5775cc69c999c255/bltc9f8a2a0015bd197/627319230d4d8e1d7f10f36e/limebikeuseragreement-185x300.jpg?format=auto&quality=60" alt="User agreement screencap" type="asset" asset-alt="User agreement screencap" data-sys-asset-alt="User agreement screencap" data-sys-asset-position="none" sys-style-type="download" ></figure>The court noted that:[T]he blue boldface hyperlink to the User Agreement’s terms (where the user could read the full arbitration provision) combined with the unambiguous warning that by tapping “I Agree” the user confirms that he or she “read and agreed to Lime’s User agreement,” is conspicuous enough to put a reasonably prudent smartphone user on inquiry notice of the [a]rbitration [p]rovision.According to the court, any reasonably prudent smartphone user knows that blue boldfaced text is a hyperlink. The court further states, “the large black boldface User Agreement title, the non-bold black User Agreement acknowledgement, the blue boldface User Agreement hyperlink, and the lime-green ‘I Agree’ confirmation created a user friendly display.”The court goes on to say that the assortment of contrasting colors, the use of bold versus non-bold fonts, and the empty white space contribute to a visual separation of information that makes the user clearly understand that, by tapping the “I Agree” button, he or she is agreeing to be bound by the hyperlinked user agreement.This visually clear design is repeated in the user agreement itself where the first sentence of the first paragraph is bolded and in all caps. This sentence informs the user that the terms are binding and that accessing and using the services signal agreement with the terms. The second sentence of the user agreement, which is also bolded and in all caps, informs the user of the arbitration clause and warns the user not to use the Lime service if she or he does not agree with the arbitration provision.Taken together, the court held, these features of the Lime app’s user interface and registration process resulted in a binding contract between Lime and the plaintiff. Accordingly, the plaintiff was bound by the arbitration provision contained in the Lime user agreement.The result in Babcock is not surprising and is consistent with prior cases upholding online contracts with similar implementations. But the case is a useful illustration of the fact that details matter when implementing an online contract, and that clarity of the user interface and design—including fonts, color, bolding, underlining, titles, hyperlinks, presentation of screens, etc. —may determine whether arbitration clauses and other crucial risk-mitigation provisions are enforceable against users.

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Sweating the Details: Court Analyzes User Interface to Uphold Online Arbitration Clause

Sweating the Details: Court Analyzes User Interface to Uphold Online Arbitration Clause