99 F. Supp. 3d 190
D. Mass.2015Background
- Plaintiffs (Small Justice, Goren, and DuPont) sued Xcentric (operator of RipoffReport.com) seeking declaratory relief on copyright ownership of two reports and alleging copyright infringement and a Chapter 93A claim. Xcentric moved for summary judgment.
- DuPont posted two reports on RipoffReport in Jan. and Feb. 2012. The site’s submission screen displayed a scrollable terms box (partially visible) and a checkbox the user had to select to post; deeper terms (requiring scrolling) granted Xcentric an "irrevocable, perpetual, fully‑paid, worldwide exclusive license" to posted content.
- Goren obtained a default judgment in state court against DuPont and procured orders purporting to transfer DuPont’s copyrights to him; Goren then assigned any claimed rights to Small Justice.
- Xcentric contends DuPont assented to its terms when posting (giving Xcentric an exclusive license/transfer); Plaintiffs dispute notice/assent and also assert Chapter 93A claims based on Xcentric’s fee‑based arbitration and CAP services soliciting targets of negative reports.
- The district court considered (1) whether the website’s terms produced a binding transfer/license, (2) whether the state court’s involuntary transfer could vest Goren/Small Justice with rights under 17 U.S.C. § 201(e), and (3) whether Chapter 93A liability existed for Xcentric’s solicitation programs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of online terms/license transfer | DuPont lacked reasonable notice and did not unambiguously assent to terms (browsewrap invalid) | Posting process (visible terms, conspicuous links, checkbox language) gave inquiry notice and assent; terms enforceable | Court held browsewrap was enforceable; DuPont granted Xcentric exclusive license/ownership (or at least a nonexclusive license) |
| Copyright ownership downstream transfers | State court’s order and Goren’s assignment validly conveyed DuPont’s copyrights to Goren/Small Justice | Xcentric says it already owned copyrights (or a license) so transfers to Goren were ineffective | Court held transfers to Goren/Small Justice ineffective: Xcentric owned rights (or DuPont’s involuntary transfer was invalid under § 201(e)), so Goren/Small Justice obtained nothing |
| Effect of nonexclusive license (if exclusive transfer fails) | If DuPont retained ownership, Xcentric still infringed | Even a nonexclusive license from DuPont would bar infringement claims within license scope | Court held that, at minimum, a nonexclusive license existed, barring infringement claims for uses within its scope |
| Chapter 93A claim re: CAP and arbitration solicitations | Xcentric’s solicitations were oppressive/unethical and caused reputational and monetary injury to Goren | CDA shields Xcentric from liability for third‑party content; solicitations are separate speech but Plaintiffs lack causation/actual loss from the programs | Court held CDA did not bar claims based on Xcentric’s own solicitations, but Plaintiffs failed to show causation or actual monetary loss from those programs; 93A claim dismissed |
Key Cases Cited
- Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014) (browsewrap vs. clickwrap, inquiry notice test)
- Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002) (terms hidden below download button do not give notice)
- Veeck v. Southern Bldg. Code Congress Internat’l, Inc., 293 F.3d 791 (5th Cir. 2002) (protection against involuntary copyright transfers)
- John G. Danielson, Inc. v. Winchester‑Conant Prop., Inc., 322 F.3d 26 (1st Cir. 2003) (nonexclusive license immunizes licensee from infringement suits for authorized uses)
- Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (U.S. 1984) (authorized uses by licensees are not infringement)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden rules)