Monday, August 20, 2007

AT&T's mandatory arbitration...

... is also found unconscionable: Shroyer v. New Cingular Wireless Services.
Under this three-part inquiry, courts are required to determine: (1) whether the agreement is “ ‘a consumer contract of adhesion’ ” drafted by a party that has superior bargaining power;
(2) whether the agreement occurs “ ‘in a setting in which disputes between the contracting parties predictably involve small amounts of damages’ ”; and (3) whether “ ‘it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money.’ ”
Because all three parts of the Discover Bank test are satisfied, Cingular’s class arbitration waiver is both procedurally and substantively unconscionable, and cannot be enforced.


Take it or leave it...

... mandatory, binding arbitration / choice of law clause found unenforceable in consumer agreement: Oestreicher v. Alienware.

Tuesday, July 31, 2007

Is copyright infringement...

... covered by your software license agreement's consequential damages disclaimer? Piper v. SunGard.

The gist: to the extent you base your copyright claim on breach of contract, perhaps.

When even service level...

.... commitments are not enough: Silicon Knights v. Epic.

Monday, June 11, 2007

Church sues Sony over rights in church architecture...

... for Sony's 'sick' game: Church wants cash for 'sick' game

Entertainment giant Sony has been branded irresponsible for using a cathedral from a city plagued by gun crime in a violent video game.

The Church of England says the company did not seek permission to use the Manchester Cathedral in the game, and is demanding an apology and a large donation to be used in its work with young people.

I don't know anything about British law regarding copyright in architecture, but I doubt that, even if there were rights at one time, they continue today. Or, even if they do, that they would extend to something like this. Sounds like an interesting research project/law review article.

Another theory might be something under trademark rights. However, that also seems like a stretch.

Saturday, June 9, 2007

Linden Labs' Terms of Service "unconscionable"...

... in part because the Eastern District relied on EMPLOYMENT and FRANCHISEE CASES! I kid you not: read for yourself: Bragg v. Linden.

Linden Labs' the folks that bring you Second Life lost it's motion to compel arbitration because the court found the Terms of Service both procedurally and substantively unconscionable.

When discussing the TOS' procedural aspect, the court points to two California employment agreements about "take-it-or-leave-it" employment contracts. Anyone could figure out that the policies in those cases would be considerably different than the policies underlying a service agreement. This sounds like "clear error" and Linden Labs ought to win on appeal.

The court also stated that there are no market alternatives because no other online world offers "its participants property rights in virtual land." I'm not sure which way this argument should cut. Might the fact that they alone offer this feature be reason that the terms should be given more weight? To what other relevant market participant is the court comparing unconscionability's "shock the conscious?"

I will agree with the court with respect to one argument: PUT YOUR ARBITRATION CLAUSE IN A CONSPICUOUS PLACE. Linden Labs did not.

Thursday, June 7, 2007

Gateway sued in small claims...

... despite its arbitration clause probably because the consumer's faulty computer prevented him from seeing notice. Though, this 'Stubborn' PC owner
is going to have an uphill battle:
As Gateway tells it in court filings, the company replaced Sheehan's computer a few months after he first complained, and he kept both machines.