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Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

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Groff v. America Online, Inc.

File No. C.A. No. PC 97-0331, 1998 W L 307001 (R.I. Superior Ct., May 27, 1998)

In the course of dismissing plaintiff's suit for improper venue, the court affirmed the validity of a click-wrap agreement entered into by America Online, Inc. ("AOL") and one of its customers.,

Groff was one of a host of lawsuits brought as a result of AOL's decision to offer users unlimited internet access in exchange for a flat monthly fee. This represented a switch from AOL's prior pricing model, under which users were provided a limited time online for a lower set fee. Usage that exceeded the proscribed minimum was billed out at an hourly rate.

Plaintiff Groff and others charged that this offer violated the Rhode Island Unfair Trade Practice and Consumer Act, because AOL knew that its computer system was incapable of providing the offered services to the number of users AOL expected to accept its offer.

Plaintiff brought suit in Rhode Island. AOL moved to dismiss on the ground that the forum selection clause contained in the parties' contract mandated that the suit be brought in Virginia, where defendant's base of operations was located. The court agreed, and dismissed the suit.

In reaching this conclusion, the court held that the parties' contract, entered into online by the click of an "I agree" button, was enforceable. According to AOL, before a user can access AOL's system, he must first click on an "I agree" button indicating his assent to be bound by AOL's Terms of Service. This button first appears on a screen that offers the user a choice to either read, or agree to be bound by, AOL's Terms of Service. It also appears at the foot of the Terms of Service, where the user is offered the choice of clicking either an "I agree" or "I disagree" button, by which he accepts or rejects the Terms of Service.

The Court held that by clicking on the "I agree" button, plaintiff became bound by AOL's Terms of Service. Because the Terms of Service contained an enforceable forum selection clause mandating suit be brought in Virginia, the court accordingly dismissed plaintiff's action.

In its decision, the court twice indicated its belief that plaintiff and defendant were parties to a binding agreement. The court indicated this belief when it rejected plaintiff's contention that he was not bound by the forum selection clause because he was not aware it was in his agreement with AOL.

Our Court ... stated the general rule that a party who signs an instrument manifests his assent to it and cannot later complain that he did not read the instrument or that he did not understand its contents. Here, plaintiff effectively "signed" the agreement by clicking "I agree" not once but twice. Under these circumstances, he should not be heard to complain that he did not see, read, etc. and is bound to the terms of his agreement.

The court also indicated that it believed Groff and AOL were parties to a binding agreement during its analysis of the validity of the forum selection clause at issue. One of the factors courts look to in analyzing the validity of such clauses is the location at which the parties entered into their contract. The court's comments on this point provide further evidence that it believed that plaintiff and defendant were parties to a binding agreement:

It is not clear, in this electronic age, where the last place the contract was executed. Was it when plaintiff clicked the "I agree" button in Rhode Island or where that message was received, at defendant's mainframe in Virginia? The place where the transaction has been or are to be performed appears to take place where defendant's mainframe is located. Given the burden imposed upon plaintiff, this Court is not satisfied that the contract was executed in Rhode Island, or to be performed in Rhode Island.

The full text of this decision can be found on a website maintained by America Online Inc.

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