Register.com, Inc. v. Verio, Inc.

Brief Fact Summary.

Plaintiff sued to enjoin Defendant from using contact information from Plaintiff’s database to solicit registrants for the sale of web site development services by email, telephone, or direct mail. The trial court enjoined Defendant. Defendant appealed.

Synopsis of Rule of Law.

When a benefit is offered subject to stated conditions, and the offeree accepts the benefit with knowledge of the terms, the taking constitutes a binding acceptance of the terms.

Facts.

Register.com, Inc. (Plaintiff) was a registrar for the issuance of internet domain names. In compliance with federal agency regulations, Plaintiff updated and made available to the public all registrants’ contact information. The results were accompanied by a restrictive caption written by Plaintiff that prohibited searchers from using the data to “support the transmission of mass unsolicited, commercial advertising or solicitation via email.” Verio, Inc. (Defendant), a web site development business, created an automated software program that submitted multiple successive queries each day to acquire the contact information of new registrants. Defendant sent these registrants marketing solicitations by e-mail, phone, and direct mail. Plaintiff updated its caption to further bar mass solicitation via direct mail or telephone, in addition to e-mail. Defendant accordingly stopped using the information for email marketing but refused to cease marketing by direct mail and telephone. Defendant arguing that it never received legally enforceable notice of the new restrictions. The district court enjoined Defendant from using the contact information. Defendant appealed.

Issue.

Whether a party is contractually bound to restrictive conditions of a benefit a party is aware of but does not agree with when it continues to utilize that benefit.

Held.

Yes. The trial court’s ruling is affirmed. When a benefit is offered subject to stated conditions, and the offeree accepts the benefit with knowledge of the terms, the taking constitutes a binding acceptance of the terms.

Discussion.

On a daily basis, Defendant was submitting numerous queries, each of which was accompanied by notice of Plaintiff’s restrictive terms. Defendant’s queries were regular and numerous, not sporadic and infrequent, so its contention that it obtained the contact information without being conscious of the new conditions is implausible. Defendant even acknowledged that it continued drawing the data with full knowledge that access was subject to the appended conditions. Since Defendant was fully aware of Plaintiff’s restrictive terms, its argument that it is not bound by the terms because it rejects them is unintelligible. The enforceability of the Plaintiff’s terms does not depend on Defendant’s disposition to the terms. Defendant’s acceptance of the benefit constitutes an acceptance of the terms.