Cairo, Inc. v. Crossmedia Services, Inc.

Brief Fact Summary.

Cairo, Inc. (Plaintiff) used computer program “robots” to access and obtain information from web pages created by Crossmedia Services, Inc. (Defendant). Plaintiff claimed that it was not bound by the forum selection clause contained within the Terms of Use on those web pages because it had no actual knowledge of the terms and had not expressly agreed to them.

Synopsis of Rule of Law.

When a user repeatedly accesses a website through a computer search program “robot,” knowledge of the website’s terms of use will be imputed to the user even when the user does not have actual knowledge of those terms.

Facts.

Defendant created web pages for retail clients that showed shoppers the retailer’s specials and promotional materials. Defendant also provided shoppers access to these web pages. Visitors to the retailer web pages created by Defendant were directed to a web page run by Defendant that required the shopper to enter certain information before accessing the retailer promotional site. Each of the pages hosted by Defendant displayed its name and logo and a notice that “By continuing past this page and/or using this site, you agree to abide by the Terms of Use for this site, which prohibit commercial use of any information on this site.” The shopper was informed that the Terms of Use were a binding contract and that if the shopper did not wish to be bound by the agreement, he or she should not use the website. The Terms of Use included a forum selection clause, requiring all disputes to be litigated within state or federal courts in Chicago, Illinois. Plaintiff created a website allowing users to search its database of in-store sales information. In order to acquire the information for this database, Plaintiff automatically visited retailers’ websites with computer programs known as “robots,” “spiders,” or “crawlers,” which recorded relevant sales information and included it in its database, but which could not read Defendant’s Terms of Use. Within days of launch, Defendant became aware of Plaintiff’s website and that Plaintiff was copying the promotional materials from Defendants web pages and posting them on Plaintiff’s site. Defendant sent Plaintiff a cease and desist letter claiming that Plaintiff’s actions violated Defendant’s Terms of Use. Plaintiff continued to visit Defendant’s websites. Shortly after receipt of this demand, Plaintiff filed an action for declaratory relief against Defendant in federal court in California, seeking a declaration that its actions did not violate any of Defendant’s rights. Plaintiff moved to dismiss the action for improper venue, arguing that its forum selection clause required litigation in Chicago. Plaintiff argued that it was unaware of the forum selection clause until litigation began, and that no agreement existed between the parties as Plaintiff had not assented to the Terms of Use or forum selection clause.

Issue.

If the user of a website accesses that site via a computer program “robot” is the user still bound by the terms of use despite not having actual knowledge of those terms?

Held.

(Ware, J.) Yes. When a user repeatedly accesses a website through a computer search program “robot,” knowledge of the website’s terms of use will be imputed to the user even when the user does not have actual knowledge of those terms. The court must first determine whether a contract exists between Plaintiff and Defendant that would bind Plaintiff to Defendant’s Terms of Use, including the forum selection clause. Plaintiff visited Defendant’s websites even after receipt of the cease and desist letter, so it had actual knowledge of the Terms of Use. Contract principles state that when a benefit is offered subject to certain conditions and the offeree takes the benefit with knowledge of those conditions, the taking constitutes acceptance of those terms and the terms become binding on the offeree. Further, Plaintiff’s repeated and automated visitation to Defendant’s websites allows the court to impute knowledge of Defendant’s Terms of Use to Plaintiff even before the cease and desist letter was received. Even if Plaintiff did not expressly agree to Defendant’s Terms of Use, Plaintiff’s use of Defendant’s websites with actual or imputed knowledge of the Terms binds Plaintiff to those terms, including the forum selection provision. Whether the provision itself is ambiguous as to whether it requires arbitration or litigation, it is unambiguous that the proper forum is not in this jurisdiction. Motion to dismiss for improper venue is granted to Defendant.

Discussion.

The court distinguished the facts of this case from those of Specht v. Netscape Comm. Corp., 306 F.3d 17 (2d Cir. 2002). In Specht, the Second Circuit found that users who downloaded Netscape’s software from Netscape’s website were not bound by an arbitration provision because users would not have seen Netscape’s terms unless they scrolled down their computer screens and nothing on the website would give them reason to do so. Here, Plaintiff admitted knowledge of the Terms once it received the cease and desist letter and the court also imputed knowledge of the terms because of the repeated and automated accessing of Defendant’s websites. Cairo could have a significant impact on online transactions since agreement to a website’s terms of use could be imputed when robot software clicks buttons or checks boxes that would normally be required for the formation of an agreement between a user and a website host.