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Where there’s money, disputes arise and litigation follows. It’s the American way. E-commerce is no different. Ticketmaster v. Tickets.com, a March 27 decision in the U.S. District Court for the Central District of California, provides an excellent example of how real courts handle real cases involving new and often esoteric issues that arise from e-commerce. I’m going to focus on online contracting and what’s called deep linking. Here are the high-level facts of the case in a nutshell. Ticketmaster.com and Tickets.com are competitors in selling tickets online for things like sporting events and concerts. Ticketmaster.com often has exclusive arrangements with events it carries on its Web site so that tickets aren’t generally available to those events except through Ticketmaster, the event organizers directly, and premium-priced ticket brokers. Tickets.com also has an online ticketing service, but it operates a bit differently. In some cases it may have the ability to sell tickets directly. When it can’t, it tells you where and how to buy those tickets. It even gives you a short factual description including the time, date, place, and price for the upcoming event. Where Tickets.com doesn’t itself sell the tickets, you can click for a referral to another ticket broker or to another online ticket seller. Here’s where the unique feature of this case — hyperlinks or deep linking — comes in. According to the district court, when the exclusive ticket broker was Ticketmaster and you clicked on “Buy this ticket from another online ticketing company” on Tickets.com’s site, you were deep linked to an interior Web page of Ticketmaster (bypassing Ticketmaster’s home page). A deep link is a link to a page on a Web site below the top page or home page. Many businesses with Web sites don’t want to be deep-linked because all their ads and promotions are on their home page. Once you were at the deep link in Ticketmaster’s Web site, you could buy the tickets from Ticketmaster (without seeing their ads or promotions). Tickets.com gave an explanation, which read as follows: “These tickets are sold by another ticketing company. Although we can’t sell them to you, the link above will take you directly to the other company’s website where you can purchase them.” COURT PROCEDURE To understand the significance of this ruling, you must understand that the March decision was procedurally early in the life of this case. It still has miles to go before it’s over. Unless it settles, it will probably end up in an appellate court. Furthermore, the decision was a pronouncement of a single federal district judge in California. The ruling arose from motions to dismiss. So early in the case, things can change dramatically before the case is over. What’s interesting, however, is the judge’s discussion and analysis. As an e-commerce lawyer, I work in a legal environment where I frequently say things like “maybe” and “nobody really knows the answer yet.” The simple fact is that there are many more open legal questions in e-commerce law than resolved ones. Even some of the most basic questions are open to intense debate among lawyers. There are just too few court decisions and statutes to create a comprehensive body of e-commerce law. In this much-publicized case, we get to go beyond academic discussion and have a real judge making real rulings. It’s fascinating to see how the court views much debated points of law. CLICK-WRAP One of Ticketmaster’s arguments was that it had a link at the bottom of its Web pages to “Terms and Conditions of Website Use.” As is typical with such an agreement, it stated that by using the Web site, you were agreeing to the terms of the agreement. You’re probably familiar with these types of agreements. I am because I write them. It’s common to see a link to an agreement at the bottom of a Web page. Most people don’t bother to read them. Since I know that, when I write them for my clients, I usually like to include “innocuous” clauses like, “No matter what we do to you and no matter how bad it is, we owe you nothing.” “We hereby take ownership rights in your first born.” My favorite is, “If you sue us, you agree to sue us in the American court geographically farthest from your home.” (I hope that I’ve made you wonder about all those times you clicked “I Accept” without reading what you’ve accepted.) Ticketmaster argued that this agreement prohibited deep linking and using its site for commercial purposes. According to the court, it also argued that the agreement was valid because it was like “shrink-wrap license” cases, where CD packaging stated that opening the package constituted adherence to the license agreement (restricting republication) contained inside. These types of licenses have been held to be enforceable. The court did not buy into that argument. It felt that this wasn’t the same because the shrink-wrap license agreement is open and obvious. (I wonder if the judge ever noticed that when you’re installing software on your PC and the license pops up and you’re asked to click “I Accept” that there’s no obvious way to print the license. It makes you wonder if anybody really wants you to read that either.) Clearly, the court liked the procedure that requires a clicked “I Accept” better than just a link to “Terms and Conditions” at the bottom of a Web page. My prediction here is that Ticketmaster will ultimately prevail in enforcing its terms and conditions because the court invited Ticketmaster to amend its pleadings to show that Tickets.com knew of the terms and conditions plus facts showing implied agreement. I think that with the invitation the court is tipping its hand. It will ultimately uphold this agreement. Arguably, the average Web surfer might be able to argue that he was never aware of or read the terms and conditions. The president of Tickets.com is going to have a tough time saying that with a straight face. DEEP LINKING Now that I’ve predicted that Ticketmaster will ultimately prevail on its contract claim, the fact is that the press never mentions the contract claim. The headlines say things like “Hyperlink to Web Site Not Copyright Infringement.” While the court did say that, I don’t think it will be dispositive in this case. The “Terms and Conditions” will decide it, and it will be in Ticketmaster’s favor. What’s interesting is that the case is seen as a leading case on deep linking, but the court truly had little to say about deep linking. What it said was this: “[H]yperlinking does not itself involve a violation of the Copyright Act . . . since no copying is involved, the customer is automatically transferred to the particular genuine web page of the original author.” Hyperlinking or mere linking could mean a link to anywhere, including the home page. While the court may be blessing that under copyright law, the court’s language doesn’t help Tickets.com with deep linking and really doesn’t solve its problem with the terms and conditions of Web site use. Somehow, the perception is that Tickets.com is winning this case. I’ll put my two dollars on Ticketmaster. Those who want to limit deep linking must include on their Web site solid terms and conditions of Web site use. The terms must prohibit deep linking and any other use of the Web site not wanted. Clearly, a business will have a stronger case for a valid agreement if it requires Web surfers to click “I accept” to an agreement before they can use its site. Still, for those who find such an agreement not customer-friendly enough, I don’t think that this court’s ruling should be used as a basis for saying that a link at the bottom of a home page to an agreement is an impermissible procedure. The law is still unclear on this. Depending on the business, it may make sense to err on the side of being customer-friendly rather than legally conservative. Mark Grossman leads the computer and Internet law department of Becker & Poliakoffin Miami. He welcomes your questions and comments. E-mail him at [email protected]. Also, visit his home page at www.mgrossmanlaw.com. Online research for this column is provided by Lexis-Nexis.

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