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- The Computer Law Resource
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- ProCD Case Reversed!
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- In the United States Court of Appeals
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- For the Seventh Circuit
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- No. 961139
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- PROCD, INCORPORATED,
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- Plaintiff
- Appellant,
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- v.
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- MATTHEW ZEIDENBERG and SILKEN MOUNTAIN
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- WEB SERVICES, INC.,
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- Defendants
- Appellees.
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- Appeal from the United States District Court
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- for the Western District of Wisconsin.
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- No. 95C0671CBarbara B. Crabb,
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- Judge.
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- ARGUED MAY 23, 1996
- DECIDED JUNE 20, 1996
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- Before COFFEY, FLAUM, and EASTERBROOK, Circuit Judges.
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- EASTERBROOK, Circuit Judge. Must buyers of computer software
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- obey the terms of shrinkwrap licenses? The district court held
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- not, for two reasons: first, they are not contracts because the
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- licenses are inside the box rather than printed on the outside;
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- second, federal law forbids enforcement even if the licenses are
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- contracts. 908 F.Supp. 640 (W.D. Wis. 1996). The parties and numerous
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- amici curiae have briefed many other issues, but these are the
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- only two that matterand we disagree with the district
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- judge's conclusion on each. Shrinkwrap licenses are enforceable
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- unless their terms are objectionable on grounds applicable to
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- contracts in general (for example, if they violate a rule of positive
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- law, or if they are un conscionable). Because no one argues
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- that the terms of the license at issue here are troublesome, we
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- remand with instructions to enter judgment for the plaintiff.
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- I
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- ProCD, the plaintiff, has compiled information from more than
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- 3,000 telephone directories into a computer database. We may assume
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- that this database cannot be copyrighted, although it is more
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- complex, contains more information (ninedigit zip codes
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- and census industrial codes), is organized differently, and therefore
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- is more original than the single alphabetical directory at issue
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- in Feist Publications, Inc. v. Rural Telephone Service Co., 499
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- U.S. 340 (1991). See Paul J. Heald, The Vices of Originality,
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- 1991 Sup. Ct. Rev. 143, 16068. ProCD sells a version of
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- the database, called SelectPhone (trademark), on CDROM discs.
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- (CDROM means "compact discread only memory."
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- The "shrinkwrap license" gets its name from the fact
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- that retail software packages are covered in plastic or cellophane
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- "shrinkwrap," and some vendors, though not ProCD, have
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- written licenses that become effective as soon as the customer
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- tears the wrapping from the package. Vendors prefer "end
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- user license," but we use the more common term.) A proprietary
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- method of compressing the data serves as effective encryption
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- too. Customers decrypt and use the data with the aid of an application
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- program that ProCD has written. This program, which is copyrighted,
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- searches the database in response to users' criteria (such as
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- "find all people named Tatum in Tennessee, plus all firms
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- with 'Door Systems' in the corporate name"). The resulting
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- lists (or, as ProCD prefers, "listings") can be read
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- and manipulated by other software, such as word processing programs.
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- The database in SelectPhone (trademark) cost more than $10
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- million to compile and is expensive to keep current. It is much
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- more valuable to some users than to others. The combination of
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- names, addresses, and sic codes enables manufacturers to compile
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- lists of potential customers. Manufacturers and retailers pay
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- high prices to specialized information intermediaries for such
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- mailing lists; ProCD offers a potentially cheaper alternative.
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- People with noth ing to sell could use the database as a
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- substitute for call ing long distance information, or as
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- a way to look up old friends who have moved to unknown towns,
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- or just as a electronic substitute for the local phone book. ProCD
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- decided to engage in price discrimination, selling its database
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- to the general public for personal use at a low price (approximately
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- $150 for the set of five discs) while selling information to the
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- trade for a higher price. It has adopted some intermediate strategies
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- too: access to the SelectPhone (trademark) database is available
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- via the America Online service for the price America Online
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- charges to its clients (approximately $3 per hour), but this service
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- has been tailored to be useful only to the general public.
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- If ProCD had to recover all of its costs and make a profit
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- by charging a single pricethat is, if it could not
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- charge more to commercial users than to the general publicit
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- would have to raise the price substantially over $150. The ensuing
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- reduction in sales would harm consumers who value the information
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- at, say, $200. They get consumer surplus of $50 under the current
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- arrangement but would cease to buy if the price rose substantially.
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- If because of high elasticity of demand in the consumer segment
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- of the market the only way to make a profit turned out to be a
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- price attractive to commercial users alone, then all consumers
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- would lose outand so would the commercial clients,
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- who would have to pay more for the listings because ProCD could
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- not obtain any contribution toward costs from the consumer market.
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- To make price discrimination work, however, the seller must
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- be able to control arbitrage. An air carrier sells tickets for
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- less to vacationers than to business travelers, using advance
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- purchase and Saturdaynightstay requirements to distinguish
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- the categories. A producer of movies segments the market by time,
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- releasing first to theaters, then to payperview services,
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- next to the videotape and laserdisc market, and finally to cable
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- and commercial tv. Vendors of computer software have a harder
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- task. Anyone can walk into a retail store and buy a box. Customers
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- do not wear tags saying "commercial user" or "consumer
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- user." Anyway, even a commercialuserdetector
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- at the door would not work, because a consumer could buy the software
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- and resell to a commercial user. That arbitrage would break down
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- the price discrimination and drive up the minimum price at which
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- ProCD would sell to anyone.
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- Instead of tinkering with the product and letting users sort
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- themselvesfor example, furnishing current data at
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- a high price that would be attractive only to commercial customers,
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- and twoyearold data at a low priceProCD
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- turned to the institution of contract. Every box containing its
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- consumer product declares that the software comes with restrictions
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- stated in an enclosed license. This license, which is encoded
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- on the CDROM disks as well as printed in the manual, and
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- which appears on a user's screen every time the software runs,
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- limits use of the application pro gram and listings to noncommercial
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- purposes.
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- Matthew Zeidenberg bought a consumer package of SelectPhone
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- (trademark) in 1994 from a retail outlet in Madison, Wisconsin,
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- but decided to ignore the license. He formed Silken Mountain Web
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- Services, Inc., to resell the information in the SelectPhone (trademark)
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- database. The corporation makes the database available on the
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- Internet to anyone willing to pay its pricewhich,
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- needless to say, is less than ProCD charges its commercial customers.
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- Zeidenberg has purchased two additional SelectPhone (trademark)
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- packages, each with an updated version of the database, and made
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- the latest information available over the World Wide Web, for
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- a price, through his corporation. ProCD filed this suit seeking
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- an injunction against further dissemination that exceeds the rights
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- specified in the licenses (identical in each of the three packages
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- Zeidenberg purchased). The district court held the licenses ineffectual
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- because their terms do not appear on the outside of the packages.
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- The court added that the second and third licenses stand no different
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- from the first, even though they are identical, because they might
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- have been different, and a purchaser does not agree toand
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- cannot be bound byterms that were secret at the time
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- of purchase. 908 F. Supp. at 654.
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- II
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- Following the district court, we treat the licenses as ordinary
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- contracts accompanying the sale of products, and therefore as
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- governed by the common law of contracts and the Uniform Commercial
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- Code. Whether there are legal differences between "contracts"
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- and "licenses" (which may matter under the copyright
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- doctrine of first sale) is a subject for another day. See Microsoft
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- Corp. v. Harmony Computers & Electronics, Inc., 846 F. Supp.
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- 208 (E.D. N.Y. 1994). Zeidenberg does not argue that Silken Mountain
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- Web Services is free of any restrictions that apply to Zeidenberg
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- himself, because any effort to treat the two parties as distinct
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- would put Silken Mountain behind the eight ball on ProCD's argument
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- that copying the application program onto its hard disk violates
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- the copyright laws. Zeidenberg does argue, and the district court
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- held, that placing the package of software on the shelf is an
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- "offer," which the customer "accepts" by paying
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- the asking price and leaving the store with the goods. Peeters
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- v. State, 154 Wis. 111, 142 N.W. 181 (1913). In Wisconsin, as
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- elsewhere, a contract includes only the terms on which the parties
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- have agreed. One cannot agree to hidden terms, the judge concluded.
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- So far, so goodbut one of the terms to which Zeidenberg
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- agreed by purchasing the software is that the transaction was
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- subject to a license. Zeidenberg's position therefore must be
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- that the printed terms on the outside of a box are the parties'
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- contractexcept for printed terms that refer to or
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- incor porate other terms. But why would Wisconsin fetter
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- the parties' choice in this way? Vendors can put the entire terms
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- of a contract on the outside of a box only by using microscopic
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- type, removing other information that buyers might find more useful
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- (such as what the software does, and on which computers it works),
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- or both. The "Read Me" file included with most software,
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- describing system requirements and potential incompatibilities,
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- may be equivalent to ten pages of type; warranties and license
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- restrictions take still more space. Notice on the outside, terms
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- on the inside, and a right to return the software for a refund
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- if the terms are unacceptable (a right that the license expressly
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- extends), may be a means of doing business valuable to buyers
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- and sellers alike. See E. Allan Farnsworth, 1 Farnsworth on Contracts
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- sec. 4.26 (1990); Restatement (2d) of Contracts sec. 211 comment
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- a (1981) ("Standardization of agreements serves many of the
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- same functions as standardization of goods and services; both
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- are essential to a system of mass production and distribu
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- tion. Scarce and costly time and skill can be devoted to a class
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- of transactions rather than the details of individual transactions.").
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- Doubtless a state could forbid the use of standard contracts
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- in the software business, but we do not think that Wisconsin has
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- done so.
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- Transactions in which the exchange of money precedes the communication
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- of detailed terms are common. Consider the purchase of insurance.
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- The buyer goes to an agent, who explains the essentials (amount
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- of coverage, number of years) and remits the premium to the home
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- office, which sends back a policy. On the district judge's understanding,
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- the terms of the policy are irrelevant because the insured paid
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- before receiving them. Yet the device of payment, often with a
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- "binder" (so that the insurance takes effect immediately
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- even though the home office reserves the right to withdraw coverage
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- later), in advance of the policy, serves buyers' interests by
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- accelerating effectiveness and reducing transactions costs. Or
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- consider the purchase of an airline ticket. The traveler calls
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- the carrier or an agent, is quoted a price, reserves a seat, pays,
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- and gets a ticket, in that order. The ticket contains elaborate
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- terms, which the traveler can reject by canceling the reservation.
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- To use the ticket is to accept the terms, even terms that in retrospect
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- are disadvantageous. See Carnival Cruise Lines, Inc. v. Shute,
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- 499 U.S. 585 (1991); see also Vimar Seguros y Reaseguros, S.A.
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- v. M/V Sky Reefer, 115 S. Ct. 2322 (1995) (bills of lading). Just
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- so with a ticket to a concert. The back of the ticket states that
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- the patron promises not to record the concert; to attend is to
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- agree. A theater that detects a violation will confiscate the
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- tape and escort the violator to the exit. One could arrange things
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- so that every concertgoer signs this promise before forking over
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- the money, but that cumbersome way of doing things not only would
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- lengthen queues and raise prices but also would scotch the sale
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- of tickets by phone or electronic data service.
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- Consumer goods work the same way. Someone who wants to buy
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- a radio set visits a store, pays, and walks out with a box. Inside
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- the box is a leaflet containing some terms, the most important
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- of which usually is the warranty, read for the first time in the
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- comfort of home. By Zeidenberg's lights, the warranty in the box
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- is irrelevant; every consumer gets the standard warranty implied
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- by the UCC in the event the contract is silent; yet so far as
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- we are aware no state disregards warranties furnished with consumer
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- products. Drugs come with a list of ingredients on the outside
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- and an elaborate package insert on the inside. The package insert
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- describes drug interactions, contraindications, and other vital
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- informationbut, if Zeidenberg is right, the purchaser
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- need not read the package insert, because it is not part of the
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- contract.
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- Next consider the software industry itself. Only a minor
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- ity of sales take place over the counter, where there are boxes
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- to peruse. A customer pay place an order by phone in response
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- to a line item in a catalog or a review in a magazine. Much software
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- is ordered over the Internet by purchasers who have never seen
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- a box. Increasingly software arrives by wire. There is no box;
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- there is only a stream of electrons, a collection of information
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- that includes data, an application program, instructions, many
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- limitations ("MegaPixel 3.14159 cannot be used with BytePusher
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- 2.718"), and the terms of sale. The user purchases a serial
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- number, which activates the software's features. On Zeidenberg's
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- arguments, these unboxed sales are unfettered by termsso
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- the seller has made a broad warranty and must pay consequential
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- damages for any shortfalls in performance, two "promises"
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- that if taken seriously would drive prices through the ceiling
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- or return transactions to the horseandbuggy age.
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- According to the district court, the UCC does not counte
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- nance the sequence of money now, terms later. (Wisconsin's version
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- of the UCC does not differ from the Official Version in any material
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- respect, so we use the regular numbering system. Wis. Stat. sec.
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- 402.201 corresponds to UCC sec. 2201, and other citations
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- are easy to derive.) One of the court's reasonsthat
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- by proposing as part of the draft Article 2B a new UCC sec. 22203
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- that would explicitly validate standardform user licenses,
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- the American Law Institute and the National Conference of Commissioners
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- on Uniform Laws have conceded the invalidity of shrink-wrap licenses
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- under current law, see 908 F. Supp. at 65566depends
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- on a faulty inference. To propose a change in a law's text is
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- not necessarily to propose a change in the law's effect. New words
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- may be designed to fortify the current rule with a more precise
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- text that curtails uncertainty. To judge by the flux of law review
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- articles discussing shrinkwrap licenses, uncertainty is much in
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- need of reductionalthough businesses seem to feel
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- less uncertainty than do scholars, for only three cases (other
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- than ours) touch on the subject, and none directly addresses it.
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- See StepSaver Data Systems, Inc. v. Wyse Technology, 939
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- F.2d 91 (3d Cir. 1991); Vault Corp. v. Quaid Software Ltd., 847
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- F.2d 255, 26870 (5th Cir. 1988); Arizona Retail Systems,
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- Inc. v. Software Link, Inc., 831 F. Supp. 759 (D. Ariz. 1993).
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- As their titles suggest, these are not consumer transactions.
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- StepSaver is a battleoftheforms case,
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- in which the parties exchange incompatible forms and a court must
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- decide which prevails. See Northrop Corp. v. Litronic Industries,
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- 29 F.3d 1173 (7th Cir. 1994) (Illinois law); Douglas G. Baird
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- & Robert Weisberg, Rules, Standards, and the Battle of the
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- Forms: A Reassessment of sec. 2207, 68 Va. L. Rev. 1217,
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- 122731 (1982). Our case has only one form; UCC sec. 2207
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- is irrelevant. Vault holds that Louisiana's special shrinkwraplicense
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- statute is preempted by federal law, a question to which
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- we return. And Arizona Retail Systems did not reach the question,
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- because the court found that the buyer knew the terms of the license
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- before purchasing the software.
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- What then does the current version of the UCC have to say?
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- We think that the place to start is sec. 2204(1): "A
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- contract for sale of goods may be made in any manner sufficient
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- to show agreement, including conduct by both parties which recognizes
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- the existence of such a contract." A vendor, as master of
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- the offer, may invite acceptance by conduct, and may propose limitations
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- on the kind of conduct that constitutes acceptance. A buyer may
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- accept by performing the acts the vendor proposes to treat as
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- acceptance. And that is what happened. ProCD proposed a contract
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- that a buyer would accept by using the software after having an
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- opportunity to read the license at leisure. This Zeidenberg did.
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- He had no choice, because the software splashed the license on
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- the screen and would not let him proceed without indicating acceptance.
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- So although the district judge was right to say that a contract
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- can be, and often is, formed simply by paying the price and walking
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- out of the store, the UCC permits contracts to be formed in other
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- ways. ProCD proposed such a different way, and without protest
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- Zeidenberg agreed. Ours is not a case in which a consumer opens
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- a package to find an insert saying "you owe us an extra $10,000"
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- and the seller files suit to collect. Any buyer finding such a
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- demand can prevent formation of the contract by returning the
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- package, as can any consumer who concludes that the terms of the
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- license make the software worth less than the purchase price.
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- Nothing in the UCC requires a seller to maximize the buyer's net
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- gains.
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- Section 2606, which defines "acceptance of goods",
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- reinforces this understanding. A buyer accepts goods under sec.
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- 2606(1)(b) when, after an opportunity to inspect, he fails
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- to make an effective rejection under sec. 2602(1). ProCD
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- extended an opportunity to reject if a buyer should find the license
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- terms unsatisfactory; Zeidenberg inspected the package, tried
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- out the software, learned of the license, and did not reject the
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- goods. We refer to sec. 2606 only to show that the opportunity
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- to return goods can be important; acceptance of an offer differs
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- from acceptance of goods after delivery, see Gillen v. Atalanta
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- Systems, Inc., 997 F.2d 280, 284 n.1 (7th Cir. 1993); but the
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- UCC consistently permits the parties to structure their relations
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- so that the buyer has a chance to make a final decision after
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- a detailed review.
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- Some portions of the UCC impose additional requirements on
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- the way parties agree on terms. A disclaimer of the implied warranty
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- of merchantability must be "conspicuous." UCC sec. 2316(2),
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- incorporating UCC sec. 1201(10). Promises to make firm offers,
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- or to negate oral modifications, must be "separately signed."
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- UCC secs. 2205, 2209(2). These special provisos reinforce
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- the impression that, so far as the UCC is concerned, other terms
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- may be as inconspicuous as the forumselection clause on
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- the back of the cruise ship ticket in Carnival Lines. Zeidenberg
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- has not located any Wisconsin casefor that matter,
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- any case in any stateholding that under the UCC the
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- ordinary terms found in shrinkwrap licenses require any special
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- prominence, or otherwise are to be undercut rather than enforced.
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- In the end, the terms of the license are conceptually identical
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- to the contents of the package. Just as no court would dream of
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- saying that SelectPhone (trademark) must contain 3,100 phone books
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- rather than 3,000, or must have data no more than 30 days old,
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- or must sell for $100 rather than $150although any
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- of these changes would be welcomed by the customer, if all other
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- things were held constantso, we believe, Wisconsin
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- would not let the buyer pick and choose among terms. Terms of
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- use are no less a part of "the product" than are the
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- size of the database and the speed with which the software compiles
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- listings. Competition among vendors, not judicial revision of
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- a package's contents, is how consumers are protected in a market
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- economy. Digital Equipment Corp. v. Uniq Digital Technologies,
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- Inc., 73 F.3d 756 (7th Cir. 1996). ProCD has rivals, which may
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- elect to compete by offering superior software, monthly updates,
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- improved terms of use, lower price, or a better compromise among
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- these elements. As we stressed above, adjusting terms in buyers'
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- favor might help Matthew Zeidenberg today (he already has the
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- software) but would lead to a response, such as a higher price,
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- that might make consumers as a whole worse off.
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-
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- III
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-
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- The district court held that, even if Wisconsin treats shrinkwrap
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- licenses as contracts, sec. 301(a) of the Copyright Act, 17 U.S.C.
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- sec. 301(a), prevents their enforcement. 908 F. Supp. at 65659.
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- The relevant part of sec. 301(a) preempts any "legal or equitable
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- rights [under state law] that are equivalent to any of the exclusive
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- rights within the general scope of copyright as specified by section
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- 106 in works of authorship that are fixed in a tangible medium
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- of expression and come within the subject matter of copyright
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- as specified by sections 102 and 103". ProCD's soft
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- ware and data are "fixed in a tangible medium of expression",
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- and the district judge held that they are "within the subject
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- matter of copyright". The latter conclusion is plainly right
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- for the copyrighted application program, and the judge thought
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- that the data likewise are "within the subject matter of
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- copyright" even if, after Feist, they are not sufficiently
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- original to be copyrighted. 908 F.Supp. at 65657. Baltimore
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- Orioles, Inc. v. Major League Baseball Players Ass'n, 805 F.2d
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- 663, 676 (7th Cir. 1986), supports that conclusion, with which
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- commentators agree. E.g., Paul Goldstein, III Copyright sec. 15.2.3
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- (2d ed. 1996); Melville B. Nimmer & David Nimmer, Nimmer on
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- Copyright sec. 101[B] (1995); William F. Patry, II Copyright Law
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- and Practice 110809 (1994). One function of sec. 301(a)
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- is to prevent states from giving special protection to works of
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- authorship that Congress has decided should be in the public domain,
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- which it can accomplish only if "subject matter of copyright"
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- includes all works of a type covered by sections 102 and 103,
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- even if federal law does not afford protection to them. Cf. Bonito
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- Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989)
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- (same principle under patent laws).
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- But are rights created by contract "equivalent to any
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- of the exclusive rights within the general scope of copyright"?
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- Three courts of appeals have answered "no." National
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- Car Rental Systems, Inc. v. Computer Associates International,
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- Inc., 991 F.2d 426, 433 (8th Cir. 1993); Taquino v. Teledyne Monarch
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- Rubber, 893 F.2d 1488, 1501 (5th Cir. 1990); Acorn Structures,
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- Inc. v. Swantz, 846 F.2d 923, 926 (4th Cir. 1988). The district
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- court disagreed with these decisions, 908 F. Supp. at 658, but
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- we think them sound. Rights "equivalent to any of the exclusive
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- rights within the general scope of copyright" are rights
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- established by lawrights that restrict the options
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- of persons who are strangers to the author. Copyright law forbids
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- duplication, public performance, and so on, unless the per
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- son wishing to copy or perform the work gets permission; silence
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- means a ban on copying. A copyright is a right against the world.
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- Contracts, by contrast, generally affect only their parties; strangers
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- may do as they please, so contracts do not create "exclusive
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- rights." Someone who found a copy of SelectPhone (trademark)
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- on the street would not be affected by the shrinkwrap licensethough
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- the federal copyright laws of their own force would limit the
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- finder's ability to copy or transmit the application program.
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- Think for a moment about trade secrets. One common trade secret
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- is a customer list. After Feist, a simple alpha betical
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- list of a firm's customers, with address and tele phone
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- numbers, could not be protected by copyright. Yet Kewanee Oil
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- Co. v. Bicron Corp., 416 U.S. 470 (1974), holds that contracts
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- about trade secrets may be enforcedprecisely because
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- they do not affect strangers' ability to discover and use the
-
- information independently. If the amendment of sec. 301(a) in
-
- 1976 overruled Kewanee and abolished consensual protection of
-
- those trade secrets that cannot be copyrighted, no one has noticedthough
-
- abolition is a logical consequence of the district court's approach.
-
- Think, too, about everyday transactions in intellectual property.
-
- A customer visits a video store and rents a copy of Night of the
-
- Lepus. The customer's contract with the store limits use of the
-
- tape to home viewing and requires its return in two days. May
-
- the customer keep the tape, on the ground that sec. 301(a) makes
-
- the promise unenforceable?
-
-
-
-
- A law student uses the LEXIS database, containing publicdomain
-
- documents, under a contract limiting the results to educational
-
- endeavors; may the student resell his access to this database
-
- to a law firm from which LEXIS seeks to collect a much higher
-
- hourly rate? Suppose ProCD hires a firm to scour the nation for
-
- telephone directories, promising to pay $100 for each that ProCD
-
- does not already have. The firm locates 100 new directories, which
-
- it sends to ProCD with an invoice for $10,000. ProCD incorporates
-
- the directories into its database; does it have to pay the bill?
-
- Surely yes; Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979),
-
- holds that promises to pay for intellectual property may be enforced
-
- even though federal law (in Aronson, the patent law) offers no
-
- protection against thirdparty uses of that property. See
-
- also Kennedy v. Wright, 851 F.2d 963 (7th Cir. 1988). But these
-
- illustrations are what our case is about. ProCD offers software
-
- and data for two prices: one for personal use, a higher price
-
- for commercial use. Zeidenberg wants to use the data without paying
-
- the seller's price; if the law student and Quick Point Pencil
-
- Co. could not do that, neither can Zeidenberg.
-
-
-
-
- Although Congress possesses power to preempt even the enforcement
-
- of contracts about intellectual property or railroads,
-
- on which see Norfolk & Western Ry. v. Train Dispatchers, 499
-
- U.S. 117 (1991)courts usually read preemption
-
- clauses to leave private contracts unaffected. American Airlines,
-
- Inc. v. Wolens, 115 S. Ct. 817 (1995), provides a nice illustration.
-
- A federal statute preempts any state "law, rule, regulation,
-
- standard, or other provision . . . relating to rates, routes,
-
- or services of any air carrier." 49 U.S.C. App. sec. 1305(a)(1).
-
- Does such a law preempt the law of contractsso that,
-
- for example, an air carrier need not honor a quoted price (or
-
- a contract to reduce the price by the value of frequent flyer
-
- miles)? The Court allowed that it is possible to read the statute
-
- that broadly but thought such an interpretation would make little
-
- sense. Terms and conditions offered by contract reflect private
-
- ordering, essential to the efficient functioning of markets. 115
-
- S. Ct. at 82425. Although some principles that carry the
-
- name of contract law are designed to defeat rather than implement
-
- consensual trans actions, id. at 826 n.8, the rules that
-
- respect private choice are not preempted by a clause such as sec.
-
- 1305(a)(1). Sec tion 301(a) plays a role similar to sec.
-
- 1301(a)(1): it prevents states from substituting their own regulatory
-
- systems for those of the national government. Just as sec. 301(a)
-
- does not itself interfere with private transactions in intellectual
-
- property, so it does not prevent states from respecting those
-
- transactions. Like the Supreme Court in Wolens, we think it prudent
-
- to refrain from adopting a rule that anything with the label "contract"
-
- is necessarily outside the preemption clause: the variations and
-
- possibilities are too numerous to foresee. National Car Rental
-
- likewise recognizes the possibility that some applications of
-
- the law of contract could interfere with the attainment of national
-
- objectives and therefore come within the domain of sec. 301(a).
-
- But general enforcement of shrinkwrap licenses of the kind before
-
- us does not create such interference.
-
-
-
-
- Aronson emphasized that enforcement of the contract between
-
- Aronson and Quick Point Pencil Company would not withdraw any
-
- information from the public domain. That is equally true of the
-
- contract between ProCD and Zeidenberg. Everyone remains free to
-
- copy and disseminate all 3,000 telephone books that have been
-
- incorporated into ProCD's database. Anyone can add sic codes and
-
- zip codes. ProCD's rivals have done so. Enforcement of the shrinkwrap
-
- license may even make information more readily available, by reducing
-
- the price ProCD charges to consumer buyers. To the extent licenses
-
- facilitate distribution of object code while concealing the source
-
- code (the point of a clause forbidding disassembly), they serve
-
- the same procompetitive functions as does the law of trade secrets.
-
- Rockwell Graphic Systems, Inc. v. DEV Industries, Inc., 925 F.2d
-
- 174, 180 (7th Cir. 1991). Licenses may have other benefits for
-
- consumers: many licenses permit users to make extra copies, to
-
- use the software on multiple computers, even to incorporate the
-
- software into the user's products. But whether a particular license
-
- is generous or restrictive, a simple twoparty contract is
-
- not "equivalent to any of the exclusive rights within the
-
- general scope of copyright" and therefore may be enforced.
-
-
-
-
-
-
-
-
-
- REVERSED AND REMANDED
-
-
-
-
-
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