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Browse Wrap Agreements Catch Notice of Courts

July 20, 2012

In September 2011, the British Columbia Supreme Court delivered its decision in Century 21 Canada Limited Partnership v. Rogers Communications Inc. [doing business as Zoocasa Inc.], 2011 BCSC 1196 (Zoocasa). This is among the first cases in Canada to test the boundaries of “browse wrap” terms of use agreements commonly employed by Internet websites.

Unlike its cousins the “shrink wrap agreement” and the “click wrap agreement”, a browse wrap agreement is one that does not require the acceptance of a contract to be indicated via some affirmative action, like removing a plastic wrapper or clicking an “Agree” button. All that is required is for the user to continue using the relevant service or product after being made aware of the product’s Terms of Use.

Browse wrap agreements rely on the notion that, where an offer is made subject to certain conditions and a person takes the benefit of the offer with knowledge of the conditions, the taking can itself be an acceptance of the terms of the contract.

Not all browse wrap agreements are enforceable. The court referred to a decision from the U.S. Court of Appeals for the Second Circuit, in which a browse wrap agreement was ruled unenforceable because the purchaser could download software without ever seeing the notice of Terms of Use. To be enforceable, the court noted, notice of the Terms of Use must be clearly given, and there must be clear assent to those terms by the user. According to the court, “a properly enforceable browse wrap agreement will give the user the opportunity to read it before deeming the consumer’s use of the website as acceptance of the Terms of Use.”

One twist in this case was the question of whether an indexing robot – a computer program that automatically visits websites to copy web pages and generate an index of their content – can meet the conditions rendering a browse wrap agreement enforceable. A robot may be incapable of understanding the Terms of Use, no matter how prominently displayed, and it may lack the ability to provide assent for entering into a binding contract.

However, the court held that the mere involvement of a computer does not allow the individual who programs the computer to escape liability for the actions it carries out on that individual’s behalf. 

It is worth noting that the facts of this case allowed the court to avoid dealing with the thorny issue of notice directly. Through its lawyers, Century 21 had notified Zoocasa of the Terms of Use on several occasions. Moreover, there was evidence that Zoocasa had specifically targeted the Century 21 website, by having an employee – presumably human – review the layout of the Century 21 site prior to programming of the indexing robot.

Thus, with actual notice not in dispute, the court found that Zoocasa had accepted the Terms of Use by continuing, through its indexing robot, to make use of the Century 21 website. Since the Terms of Use prohibited commercial use of the website content, the court found that Zoocasa’s actions were in breach.

The court next turned its attention to the question of copyright infringement. Here, Zoocasa advanced a fair dealing defense, arguing that its actions constituted “research,” one of the enumerated exceptions to infringement under the Copyright Act. In particular, Zoocasa argued that “research” includes “the action or instance of searching carefully for a specified thing or person” and argued that “commercial research by a consumer qualifies as research.” 

After consideration of the fair dealing factors, the court found that Zoocasa’s copying of basic information, such as property addresses and legal descriptions, was not copyright infringement. However, the copying of original property descriptions created by real estate agents and their employees, and moreover “the repeated daily access and indexing of such information” exceeded what could be considered fair dealing. Zoocasa was ordered to pay nominal damages for breach of contract, and additional statutory damages for breach of copyright in the sum of $32,000.

Despite the outcome of this case, website owners, search engine providers, and web surfers in general would be well-served to note that at least some questions of sufficient notice, and acceptance, remain unresolved. In particular, it remains an open question whether a generic indexing robot – one that merely stumbles across a website in the context of an untargeted search – could bind its owner to the terms of a browse wrap agreement. Prudence dictates that website owners continue providing separate written notice as soon as they are made aware of possible violations.

Paul Horbal, B.A.Sc., M.Sc. (Elec. Eng.), J.D., is an associate lawyer with Bereskin & Parr LLP's Electrical & Computer Technology practice group. He can be reached in Toronto at 416.957.1664 or .

Donald H. MacOdrum, B.A., LL.B., is a partner in Bereskin & Parr LLP's Litigation practice group. He can be reached in Toronto at 416.957.1180 or .

Information on this website is for information only. It is not, and should not be taken as, legal advice. You should not rely on, or take or not take any action, based upon this information. Professional legal advice should be promptly obtained. Bereskin & Parr LLP professionals will be pleased to advise you.

 

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