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Small Justice LLC v. Xcentric Ventures LLC - 99 F. Supp. 3d 190 (D. Mass. 2015)

Rule:

To determine whether a user has inquiry notice of a browsewrap agreement, the Court must examine "the design and content of the website and the agreement's webpage." Courts look to the "conspicuousness and placement" of a link to the terms and conditions, "other notices given to users of the terms of use, and the website's general design" to determine whether a reasonably prudent user had inquiry notice of the terms.

Facts:

Defendant Xcentric Ventures LLC (Xcentric) was operating a website called the RipoffReport.com (ROR). By posting a report on the website, users agreed to a stipulation stating that he/she attests to the validity of the report. The stipulation further granted Rip-Off Report irrevocable rights to post it on the website. Such stipulation was contained a box titled “Terms and Conditions,” and was not visible unless a user employed the scroll bar. In January 2012, Christian DuPont d/b/a Arabiannights-Boston, Massachusetts (DuPont) posted a report alleging that Richard A. Goren (Goren), a lawyer, engaged in improper conduct in his professional and personal life. Goren responded by filing an action against DuPont in Suffolk Superior Court (Massachusetts) for libel and intentional interference with prospective contractual relations. Goren obtained a default judgment against DuPont. Goren further obtained orders appointing himself attorney-in-fact for DuPont and purporting to transfer to him DuPont's copyright to the January 2012 report. Thereafter, Goren executed an assignment of DuPont's copyright to himself, which he then assigned to Small Justice LLC (Small Justice). Pertinent to the Plaintiff's Chapter 93A claim were two dispute resolution programs offered by Xcentric. If a party contests the content of a report posted on the ROR, he may avail himself of two, fee-based programs administered by Xcentric -- an arbitration program and the Corporate Advocacy Program (CAP). Plaintiffs, Small Justice, Goren, and DuPont instituted the present action asserting copyright ownership over the January 2012 report. According to the Plaintiffs, Xcentric had failed to show that the contract terms were “reasonably conspicuous” and that DuPont “unambiguously manifested his assent to the terms.”

Issue:

Did Xcentric own the copyright over the January 2012 report?

Answer:

Yes.

Conclusion:

The federal district court determined that the terms and conditions in questions constituted a browsewrap agreement. According to the Court, browsewrap agreements do not require the user to manifest assent to the terms and conditions expressly; such consent is given simply by using the website. To determine whether a user has inquiry notice of a browsewrap agreement, the Court must examine "the design and content of the website and the agreement's webpage." Where the link to a website’s term of use was buried at the bottom of the page or tucked away in obscure corners of the website where users were unlikely to see it, courts have refused to enforce the browsewrap agreement. In the case at bar, the Court concluded that a reasonably prudent user was on inquiry notice of the terms and conditions associated with the ROR, and, therefore, the transfer of copyright ownership was valid. As such, Xcentric was entitled to summary judgment.

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