Once there, he found the following language: To locate the notice, the user had to scroll down the page. Typically, this notice was "below the fold" - unlike the "download" button, it was not displayed on that portion of the "Smart Download Communicator" web page which first appeared on the user's computer screen when he went to download the program. Instead, the first mention of the license agreement occurred on a portion of the web page below the "download" button. Indeed, there was no mention of a license agreement anywhere between the top of the "Smart Download Communicator" web page, and the "download" button. ![]() The software in question could be downloaded from a web page on Netscape's web site titled "Smart Download Communicator." Users wishing to download this application commenced the process by clicking on a button on this web page which said simply "download." The terms of the license agreement at issue were not contained on this web page. Finding that plaintiffs were not bound by the terms of the Smart Download license agreement, and that the Communicator license agreement did not cover the dispute at bar, the district court denied defendant's motion to compel arbitration. Netscape sought to compel plaintiffs to arbitrate their claims pursuant to the terms of licensing agreements found on Netscape's web site. Plaintiffs claimed that Smart Download improperly sent information concerning plaintiffs' downloading activities to Netscape in violation of both the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act. Smart Download is a 'plug in' which works in conjunction with Netscape's browsers. Plaintiffs commenced three separate putative class actions against defendant Netscape arising out of plaintiffs' use of Netscape's Smart Download software application. These included claims that Netscape violated both the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act by causing Netscape's Smart Download software, a Netscape browser 'plug in', to send information to Netscape about plaintiffs' downloading activities. The Second Circuit further held that the terms of a license agreement plaintiffs did agree to, governing their use of Netscape's browser, did not obligate them to arbitrate the claims they raised in this litigation. The Court held that this procedure did not create a binding contract between the parties. Once the program was downloaded, the user received no further notice of either the license agreement or its terms. This notice informed the user that his use of the software would be governed by the terms of a license agreement, which terms could be seen by clicking on a link provided on the web page. Typically, this notice appeared "below the fold" and was not on that portion of the page which first appeared on the user's screen when he went to download the program. ![]() The terms of the license agreement in question were not contained on this web page, however, and the only notice the user received of the license agreement was found on a portion of the web page below the download button. The software in question could be downloaded from a page on defendant Netscape's web site by clicking on a button which said "download". 01-7860 (L) (2d Cir., October 1, 2002)Īffirming the decision of the court below, the Second Circuit Court of Appeals holds that plaintiffs are not bound by the terms of a license agreement purporting to govern the use of a software product they downloaded because plaintiffs neither had reasonable notice thereof, nor adequately manifested their assent to be bound thereby.
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