November 26, 2022

Volume XII, Number 330

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November 23, 2022

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“Clickwrap” and “Scrollwrap” Agreements Pervade the Modern Internet

Your first use — or even visit — to an online service, whether at a website or in an app, will usually present you with a detailed user agreement. Often privacy notices, data notices, codes of conduct, and terms of use that will control your relationship with the service provider appear as well. For service providers, these agreements are vital, allowing them to onboard users without the need to exchange signed agreements or collect special digital signatures. In recognition of this, courts enforce clickwrap and scrollwrap agreements that appropriately notify users of their terms.

The Second Circuit Federal Court of Appeals, in particular, looks to the “design and content” of the interface including the agreement, asking whether a reasonable person would be placed on notice of the contract terms, either by being presented with them or by being clearly told where they are located, and once notified, continues to interface with the website or service in a way that shows their assent to the terms. The Second Circuit recently, in its decision in Zachman v. Hudson Valley Federal Credit Union (21-999-cv, September 14, 2022), reiterated that the question of whether the user was properly put on notice, even “inquiry notice,” of an agreement (or terms of that agreement incorporated by reference from another webpage), is highly fact-intensive. The Second Circuit criticized the District Court in that case for failing to review the design and content of the webpage that presented the agreement to the user and to examine how the terms were presented, and ultimately vacated the District Court’s judgment and returned the case for review of how the agreement was presented on the website.

For website and service operators, the lesson is clear. It is not sufficient just to have a user agreement, no matter how detailed. Rather, the agreement must be integrated into or clearly signposted by the design and content of the webpage or interface so that users are properly put on notice that the agreement exists and where they can review its terms. Failure to properly notice users of the agreement will mean they are not bound by its terms, including those regarding their use of the website or service, and what remedies they have against the provider if they have a complaint.

©2022 Norris McLaughlin P.A., All Rights ReservedNational Law Review, Volume XII, Number 280
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About this Author

David H. Siegel IP Attorney Norris McLaughlin New York
Senior Counsel

David Siegel concentrates his practice on all aspects of intellectual property strategy, maintenance, and enforcement. He represents clients in patent, trademark, and copyright prosecution, transactions, and litigation.

David has significant experience in intellectual property licensing and brand protection. He advises clients on global patent and trademark protection and clearance options and alternatives. David has represented inventors, businesses, and start-ups in patent-related matters such as the drafting, filing, and prosecution of patent...

917-369-8895
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