The Santa [Clara] Clause

If you’re doing any kind of business online — as a buyer or a seller — the Appeals Court here in Massachusetts has just issued a decision you should know about. It concerns forum-selection clauses, those boilerplate terms that tell you that no matter where you live, the one and only place you can sue is, say, Santa Clara, California.

A few days ago the Appeals Court declined to uphold a forum-selection clause that was part of a contract Yahoo! provided in connection with e-mail accounts.  The case started when the administrators of a deceased Yahoo! email account owner asked the Massachusetts Probate & Family Court to rule that the estate should include the contents of the email account.  Yahoo! tried to dismiss the case saying the Massachusetts courts lacked jurisdiction because of the forum-selection clause, which provided that all disputes had to be litigated in Santa Clara, California. The Probate & Family Court sided with Yahoo!, but the Appeals Court reversed the decision.

Unlike many online contracts, this one was a browsewrap agreement, i.e. it did not require the user to click “I agree.” The Appeals Court held that the clause was too broad (in that it covered every kind of dispute, even those not related to the email account) and did not bind the administrators of the estate.

Unless and until the Supreme Judicial Court rules otherwise, the lesson is this: the courts in Massachusetts will not automatically enforce forum-selection clauses in browsewrap agreements. So if you’re an online merchant, it might be better to opt for a click-wrap instead, and (counter-intuitively) don’t make the agreement too broad. It’s one more step for the consumer, but that is the price of enforceability, for the time being anyway.

ACTA: Euro Commission asks court to rule on legality

Is the Anti-Counterfeiting Trade Agreement (ACTA) compatible with the treaties governing the European Union, in particular the Charter of Fundamental Rights? That is the question before the Union’s highest court. John Clancy, the spokesperson for Trade Commissioner Karel De Guch, issued a press release dated May 11 confirming that the European Commission has referred the issue of ACTA’s legality to the European Court of Justice.


ACTA: judges opine then legislators decide

In the face of strong opposition to the Anti Counterfeiting Trade Agreement (ACTA), the European Commission has asked the European Union’s high court to decide whether the measure passes constitutional muster. According to the Commission’s ACTA site the agreement makes no change to EU law and “does not favor industry over human rights.” Nevertheless, the key question before the European Court of Justice (ECJ) is whether ACTA would infringe basic human rights such as freedom of expression.

Whatever the ECJ’s decision, final power over the treaty lies with the legislature, which is more than can be said here in the US (see below). If ACTA does not win a majority of the votes in the European Parliament, the EU will not be able to ratify the agreement.

Intellectual property (IP) serves as a mainstay of the European economy, says the EU Commission, and protecting IP means protecting jobs for European workers. In contrast, censorship and online repression are job killers, say digital-rights proponents. So will ACTA promote creative expression or stifle it?

The Commission’s fact-sheet claims that global businesses are victims of IP theft by “organized criminal organizations” (sic), that the amount of counterfeit goods entering the EU tripled between 2005 and 2010, and that ACTA will protect European jobs. But ACTA’s goal, according to the Electronic Frontier Foundation, “is to create a new standard of intellectual property enforcement above the current internationally-agreed standards… and increased international cooperation including sharing of information between signatory countries’ law enforcement agencies.”

Critics say that powerful media corporations want a new tool for stopping file-sharing; ACTA will turn Internet service providers (ISPs) into the industry’s police force and judiciary, they allege.  For a short video by ACTA opponents, La Quadrature du Net, click here.

Meanwhile, leading the anti-ACTA effort in the United States Senate, Senator Ron Wyden (D-Or) is trying to claw back the treaty-making power that Congress arguably ceded to the President when it enacted the Prioritizing Resources and Organization for Intellectual Propery (PRO-IP) Act in 2008. If Wyden’s amendment to the jobs bill survives, Congress will have an opportunity to vote on ACTA. Otherwise, the treaty acquires the force of law without having to go before the Senate for ratification.

Whatever the merits of ACTA, European citizens have the chance to weigh in on the issue because the ultimate decision over the treaty rests with their legislators. In the United States, that is not the case. If you would like to contact your Senators about ACTA and the broader question of the Senate’s ratifying authority, click here.