Category Archives: EULA

This Week on The Web 2009-09-13 (my birthday edition)

It happens to be my birthday weekend and between eating some great food, playing Guitar Hero with my wife and hanging with the family, these are the things that happened around the web this week – maybe you already read about them, maybe you need to again – there were some REALLY great discussions going on.  Come join the party on twitter (follow me here and you’ll join the conversation live.)

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later and “<” which means that I am commenting on what came before it.

This Week on The Web 2009-08-30

The things that happened around the web this week – maybe you already read about them, maybe you need to again.

I also realized that many of you might have no idea what you’re seeing below.  Sorry.  These are “tweets”, 140 maximum character messages sent via Twitter.  Within the Twitterverse individual users follow others and have followers (think of it like overlapping Venn diagram circles).  To read a tweet, you have to wade through a bit of jargon used to make the most of the 140 character limitation.  “RT” for example, is shorthand for “Re-tweet” and the @____ is the username of some other individual on Twitter.  Combined together, then, “RT @_____” means that someone else wrote a tweet that I found important and I now want to forward along to my followers.  The URL’s are then also shortened by shortening services like bit.ly to make the most of the character limitation, too.  Lastly, you might see “hash” identifiers “#______” which are ways to tag tweets of a particular flavor for easy searching later.

Four Disadvantages to Using SaaS for Your Small Business

This is a blog response to DreamSimplicity’s “4 Advantages to Using SaaS for Your Small Business“.  DS is correct, SaaS offers several great advantages that small businesses can exploit – such as obtaining access to enterprise-class software once priced outside non-enterprise reach.  But all is not rosy and wonderful in the SaaS world.  It pays to consider all options before moving ahead with any software product, and some risks are exacerbated by a SaaS environment.  Here are four to consider:

  1. You’re still small and probably have no leverage to negotiate the license.  Even SaaS vendors offer negotiable software licenses to customers who buy above a certain threshold.  As a small business, you’ll be less likely to meet that threshold and will be tied to their unmodified EULA.  Take the time to read this document carefully, it’s the setup for the next three issues.  Oh, and just because you’re small doesn’t mean you can’t TRY to negotiate.  ALWAYS ask for the changes you want – the worst they say is “no.”
  2. The SaaS provider is going to have your data.  Building your business from the ground up within one of these platforms is terrific.  However, once you mature to the point where you consider switching, you might only now start to consider how to get your data out of the system.  If you think of this up front, you might be able to get a small change to your contract to allow you easy access to your information.  If not, do the research to see how you can export data.  Zoho, for example, is awesome.  But there’s almost no way to easily get all of the data from a fully-populated database out of ZohoCRM.
  3. The SaaS provider is going to be storing your data.  Depending on your business, you might have certain regulations governing the acquisition, storage and use of the information you gather from customers.  Again, if you’ve clicked “I Agree” to the standard EULA, chances are, the vendor isn’t offering any real protection of data.
  4. You have to consider the potential for your provider to go out of business.  With the SaaS model, you only have access to the application for so long as the provider is viable.  If the provider goes away tomorrow, so does your access to the application (not to mention your data).  As a small business, you probably won’t have access to some of the enterprise-class contract provisions here either – such as escrow, guarantees for unexpected terminations… heck, even termination notice.

So, while SaaS can offer extremely valuable opportunities, there are pitfalls, too.  Just be aware – for even if you can’t do anything about these issues from a contractual perspective, you can try to deal with it from a business planning perspective.

This Week on The Web for 2009-07-26

Amazon’s Orwellian Behavior

As many are reporting, Amazon.com “recalled” an e-book remotely in response to a request by a publisher.  This is all kinds of scary and most folks are centered on the purely tangible nature of the problem.  I’m also concerned about the precent it sets, but I’m more concerned about the sapping of intellectual property rights that seems to be yet unexplored by these articles.

When you buy a book, you’re actually completing two transactions.  You’re purchasing the paper – the tangible product.  But you’re also buying a copy of the story itself – the intellectual property.  Each of these has distinct legal implications and over the years, laws have been developed to help protect not only the customer/consumer, but also the author and publisher.  The physical aspect protecting the consumer is that you have the ability to change your mind about your purchase (ie: you can return the book assuming you don’t damage it and that the transaction wasn’t noted as “all sales final” (though this isn’t an absolute bar to return)).  Retailers are likewise allowed to return what is returned to them – they have even more flexible return policies with their distributors.  And, as we’ve seen in the prior articles, folks are in an uproar about the idea that a retailer would come to your house to automatically take-back things you’ve purchased simply because their distributors wanted them to do so.

The other transaction – the one for the intellectual property – is much more interesting (IMHO).

Copyright is the protection most books are afforded.  When you buy a book, you have the right to read the story, burn/destroy the book, talk about the story with anyone, and heck, you can even resell the book (this is all part of what is known as the “first sale doctrine”.  What you can’t do is make copies of the book.  If you sell it to someone else, you can’t keep a copy for yourself, too (this is the issue with software, music, movies, etc being “shared” online).  But short of sale, the ownership in the copy is yours.  Therefore, it’s my argument that Amazon.com’s behavior amounts to theft – both of the tangible item AND the intellectual property.

The usual problem with pursuing this claim is that a service provider is smart enough to make device owners agree to some form of Terms of Service.  I would’ve thought that the Kindle ToS would have even been so bold as to allow Amazon an unrestricted right to do what they did.  But it doesn’t (Amazon Kindle ToS as of 2/9/2009):

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon. [Emphasis added.]

I have other problems with this document, of course (such as the restrictions on resale).  But on its surface, Amazon grants a perpetual license to the purchased content.  So through their behavior, following their own Terms of Service, they’re in breach.  But we won’t hear about any suits as the ToS restricts claims to confidential arbitration and limits damages to the price of the device.

For its part, Amazon says that “We are changing our systems so that in the future we will not remove books from customers’ devices in these circumstances.”

[Update:  Amazon’s Herdener (the source of the above quote) actually said more:

These books were added to our catalog using our self-service platform by a third-party who did not have the rights to the books. When we were notified of this by the rights holder, we removed the illegal copies from our systems and from customers’ devices, and refunded customers. We are changing our systems so that in the future we will not remove books from customers’ devices in these circumstances.

This doesn’t really change anything.  Even if an unauthorized party sells you something they don’t own, so long as you don’t know that the item wasn’t theirs to sell, you retain ownership as a “bonafide purchaser.”  I’m glad to see that Amazon won’t remove books in the future, seeing that they weren’t supposed to do it in the first place.]

Facebook’s Voting on ToS

[Disclaimer:  While I’m a Facebook user, I do not know all of the ins and outs of this particular issue, as I’ve not paid too much attention since they rolled back to the old ToS.]

Facebook has announced that they plan to have members vote on the new Terms of Service they’ve been working on.  In fact, they even say that it’s been a group of Facebook lawyers and a group of law students.

Facebook lawyers, with the help of law students, have been reading the 3,000-plus comments, and the administrators of the original protest group against the terms of use changes are consolidating the feedback in a list of “key concerns,” according to Facebook. The company has also sought input from privacy, copyright, and Internet legal experts.

OK, so I’m glad that they’re seeking input from privacy and copyright experts, too.  Even more interesting, though, is that unless 7,000 people submit comments, they’re only going to take the response as advisory.

Facebook will hold a vote on any proposed change if at least 7,000 members submit comments. The results of the vote will be “advisory” if less than 30 percent of Facebook active users participate in the process. If 30 percent or more of active members vote, the results of the vote will be binding, according to Axten.

In theory, that’s very representative.  If the people don’t feel the need to vote, those that do shouldn’t be counted as a representative sample of the entire population.

But let’s also be honest and say that the average teenager does not have a complete understanding of copyright, privacy or any of the other potential legal issues strewn about a Terms of Service document.  To them, music has always been “free”, digital nannies are more effective at stopping them from copying Wikipedia articles for school papers than the fear of punishment, and privacy is something they can control through the use of fake identities online.  It’s not that they’re unable to comprehend, they just haven’t had to do so up to this point.  When given the choice of “Accept” or “Reject” when installing software… how many of you read the language and then click “Reject”?

So while I think it’s commendable that Facebook offer up it’s proposed ToS to the user population for a vote, I think it’s ultimately going to not be an effective means by which the “public” will get Terms of Service that are truly acceptable to them.  The simple truth is that Facebook is a service.   They offer it to the world for free and they have created a Terms of Service document which governs the user’s use.  If the user doesn’t like the ToS, they shouldn’t use the service.  Facebook should have some sort of internal moral compass to not do anything that’s a violation of their user’s rights (even if their users don’t fully understand such rights), but that isn’t a legal requirement.  At the end of the day, Facebook should post it’s Terms of Service in both legal and layperson’s terms – disclosing the good (and more importantly) the “bad”… in detail.

Hopefully, potential users can then make an informed choice about how they wish to use the service.

EULAs: The “I’m Rubber, You’re Glue” Edition

Back in August, I wrote about Cracking the EULA’s shell.  In that instance, a California court was headed down the path of declaring EULAs as contracts of adhesion.  This was a pretty hard blow to the EULA’s drafter (the vendor).

Today is a new EULA case, with a twist.  Long story short, a court ruled against a vendor again.

Moral of the Story:  If you’re using/relying on EULAs to protect you and your product… and you believe that your funky drafting and interesting language is going to be read in a way that always works out in your favor… think again.

[Thanks to ContractsProf Blog for the story!]


Grape Licensing

I saw this the other day:

Sunset Seedless grape package

Sunset Seedless grape package

and I’ve been thinking about the implications…  is it really possible to add this type of condition?  I think I agree with Madisonian’s evaluation of the situation, assuming that the grapes are patented.  But what if they’re not patented?  Can you restrict usage of a purchased good?  Thoughts would be appreciated.  🙂

From boingboing.