IT Strategies Group, Inc. v. Allday Consulting Group, L.L.C.
975 F. Supp. 2d 1267
S.D. Fla.2013Background
- Plaintiff (ITSG/OilClaim Calculator) developed a web-based damages-calculation software for Deepwater Horizon claims and markets it under the name “OilClaim Calculator.”
- Defendants (Allday Consulting and individuals) obtained a free trial/demo of Plaintiff’s software in Aug. 2012 and later marketed competing software using similar names and advertising elements.
- Plaintiff alleges trade dress infringement and breach of contract based on an online user agreement (browsewrap) and seeks a preliminary injunction to stop Defendants’ conduct.
- At evidentiary hearing, witnesses disputed whether a “terms” hyperlink/user agreement existed or was visible in Aug. 2012, whether the agreement covered free trials, and whether Defendants manifested assent.
- The magistrate found Plaintiff failed to prove (1) the user agreement existed at the trial date, (2) it applied to free demos, or (3) Defendants assented; also found weak trade dress claim and that monetary damages would likely be adequate.
- Magistrate recommended denial of preliminary injunction; district court adopted and affirmed the recommendation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants were bound by Plaintiff’s online user agreement (browsewrap) | Plaintiff: the website contained a "terms" hyperlink and the security warning + user agreement permit injunctive relief for breaches | Defendants: no visible terms link in Aug. 2012, user agreement dated Oct. 2012, trial users did not click/assent; agreement applies to purchasers not free trials | Court: No — Plaintiff failed to show existence, applicability to free trial, or mutual assent |
| Whether Plaintiff would suffer irreparable harm absent injunction | Plaintiff: loss of customers, confusion, and contract clause stating money damages inadequate | Defendants: damages remedy available; speculation about lost sales insufficient; public interest favors competition | Court: No — damages are adequate; speculative injury and no enforceable agreement clause supporting irreparable harm |
| Likelihood of success on trade dress claim | Plaintiff: Defendants copied virtual box, two-tone design, curved calculator graphic causing consumer confusion | Defendants: design elements functional or generic; independent development; differences in functionality and distribution | Court: Not likely — designs not confusingly similar, key elements functional, no evidence of distinctiveness/secondary meaning |
| Balance of harms & public interest for preliminary injunction | Plaintiff: sole source revenue; needs protection now due to claim deadline | Defendants: injunction would harm Defendants’ broader accounting business and reputation; public interest favors competition | Court: Balance disfavors injunction — potential reputational/business harm to Defendants and public policy favors competition |
Key Cases Cited
- McDonald’s Corp. v. Robertson, 147 F.3d 1301 (11th Cir. 1998) (four-factor preliminary injunction standard)
- Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (browsewrap principles; assent requires notice of terms)
- Levi Strauss & Co. v. Sunrise Int’l Trading Inc., 51 F.3d 982 (11th Cir. 1995) (courts may rely on affidavits/hearsay for preliminary injunctions)
- Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, 369 F.3d 1197 (11th Cir. 2004) (trade dress infringement elements)
- Miller’s Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d 1312 (11th Cir. 2012) (distinctiveness requirement for trade dress)
- Cvent, Inc. v. Eventbrite, Inc., 739 F. Supp. 2d 927 (E.D. Va. 2010) (hidden terms/links at bottom of page insufficient for constructive notice)
- Fteja v. Facebook, Inc., 841 F. Supp. 2d 829 (S.D.N.Y. 2012) (contrast between click-through and browsewrap assent)
- Aronowitz v. Realth-Chem Corp., 513 F.3d 1229 (11th Cir. 2008) (Lanham Act damages elements and types of injury compensable)