Designer Skin LLC v. S & L Vitamins, Inc., et al.
Robert Novak, d/b/a Pets Warehouse and Petswarehouse.com v. Overture Services, Inc., et al.
309 F.Supp.2d 446, Civ. 02-5164 (DRH) (WDW) (E.D.N.Y., Mar. 25, 2004)
Court holds that plaintiff, by clicking an "I accept" icon agreeing to be bound by the Terms of Service governing use of an online discussion group set forth in a scrollable window, viewable ten lines at a time, was bound by the forum selection contained therein. Finding such a clause enforceable, the Court dismissed a claim brought by plaintiff asserting that defendant Google breached this agreement, because this claim was not brought in the designated forum.
The Court also held that Section 230 of the Communications Decency Act ("CDA") immunized an ISP hosting an online discussion group from claims that its failure to remove objectionable content posted on the discussion group's web page gave rise to claims of tortious interference with contractual relations.
Finally, the Court denied the motions of two additional defendants to dismiss the claims asserted against them for want of personal jurisdiction. The Court held that the first defendant was subject to specific jurisdiction in New York because of its operation of a commercial website via which it sold $6000 of products a year to New York residents. The second defendant was similarly subject to suit because he had entered into a contract with a New York company, which contract allegedly gave rise to the claims asserted against him.
Plaintiff operated a website at PetsWarehouse.com, and owned a federally registered trademark in the mark "Pets Warehouse." Plaintiff sued defendant Google, Inc. ("Google") claiming that its failure to remove "objectionable" content posted by unaffiliated third parties to an online discussion group it hosted breached Google's Term of Service, and constituted a tortuous interference with plaintiff's contractual and business relations.
Plaintiff also sued both Google and the operators of other search engines for selling placements in search engine results to those who wished to have information about their sites appear when a user entered particular queries into defendants' search engines. Apparently, plaintiff claimed that these sites would appear in response to queries containing the terms 'pet' or 'warehouse,' words contained in plaintiff's mark. According to plaintiff, this had the effect of manipulating search engine results so that paid placements preceded sites, such as plaintiff's, that were more responsive to the users' query. Such conduct purportedly gave rise to claims for unfair competition, trademark infringement and dilution, and deceptive trade practices, among others. Also joined in the suit were individuals and/or companies which allegedly purchased the opportunity for such placements on defendants' search engines.
Google moved to dismiss those claims that arose out of its hosting of an online discussion group. It moved to dismiss the claim that it breached the Terms of Service on the grounds that the forum selection clause contained in those Terms of Service mandated suit in California, not New York where it was brought.
The Court agreed, and dismissed this claim. In so doing, the Court held that plaintiff had agreed to be bound by Google's Term of Service by clicking on an 'I accept' icon while ten lines of the Terms of Service were displayed in a scrollable window appearing to the right of the icon. The balance of the Terms of Service, including the forum selection clause, could be read by scrolling down that window.
The Court rejected plaintiff's challenge to the enforceability of the forum selection clause. "A forum selection clause is enforceable unless it is shown that to enforce it would be 'unreasonable and unjust' or that some invalidity such as fraud or overreaching is attached to it." The Court held that neither the fact that the reader was required to scroll down to read all of the terms, including the clause at issue, nor its mandate of suit in California, rendered the clause unenforceable.
Google also moved to dismiss the tortuous interference claim arising out of Google's alleged failure to remove objectionable content posted by a third party to an online discussion group it hosted, on the ground that Google was immunized from such a claim by the CDA. The Court agreed that under Section 230 of the CDA, which provides that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of an information provided by another information content provider," Google was immune from plaintiff's tortuous interference claims, and dismissed them.
The Court denied motion by defendants Biochemics Inc. d/b/a Doctordog.com and John Holdefehr to dismiss the claims asserted against them for want of personal jurisdiction. Apparently, these defendants were joined because they purchased placement of their sites in the search results produced by defendants' search engines in response to queries interposed by users containing various terms, including "Pet" and "warehouse." The Court held that it could exercise specific jurisdiction over Biochemics under Section 302(a)(1) of New York's long arm statute because it operated a website at which individuals could purchase products, and shipped approximately $6000 a year of products to New York residents. The Court held that it could exercise specific jurisdiction over defendant Holdefehr because he entered into a contract with a New York entity, pursuant to which he paid at least $17,000 for search engine placement of his site in search results, which contract gave rise to the claims at issue.
Finally the Court held that on a motion to dismiss, it could not determine if plaintiff's mark "Pets Warehouse" was generic, and accordingly, denied defendants' motions to dismiss plaintiff's trademark claims on that ground.