ProCD, Inc. v. Zeidenberg
86 F.3rd 1447 (7th Cir. 1996)

  • Zeidenberg bought a telephone directory database produced by ProCD.
    • After opening the packaging and installing the software on his personal computer, Zeidenberg created a website and offered the information originally on the CD to visitors for free.
  • ProCD filed an injunction to stop Zeidenberg from continuing his distribution.
    • ProCD argued that Zeidenberg was in violation of the software license agreement.
    • Zeidenberg argued that he was not aware that he wasn’t allowed to repost all the data on the CD for free because the full license wasn’t written on the box, it was contained on the CD (which Zeidenberg couldn’t read until after he bought the CD).
      • The package itself only stated that there was a license enclosed. Zeidenberg first saw the license when he installed the software, which he accepted by clicking the ‘accept’ button when the user agreement popped-up on his computer screen.
      • That’s commonly known as a click-through license or clickwrap. Sometimes these are known as shrinkwrap agreement.
    • Zeidenberg argued that only the text written on the outside of the package counts as part of the contract offered by placing the product on the shelf and agreed to by purchasing the product.
  • The Trial Court found for Zeidenberg. ProCD appealed.
  • The Appellate Court reversed and found for ProCD.
    • The Appellate Court noted that telephone directories are public information, so ProCD can’t copyright the database.
    • However, the Court held that a contract could confer among the parties similar rights to a copyright.
    • The Court then found that the license agreement was a valid and enforceable as a contract.
      • The court relied primarily on UCC §2-204 (describing a valid contract) and UCC §2-606 (describing acceptance of a contract). The court found that ProCD, had offered use of the software as in accordance with the requirements of UCC §2-606.
    • The Court found that Zeidenberg did accept the offer by clicking through.
    • The Court noted that Zeidenberg could have rejected the terms of the contract and returned the software.
      • In addition, the Court noted that Zeidenberg had the ability to return the goods under the UCC if he didnÕt like the license agreement.
  • This was considered a very controversial decision.