An interesting case just came down, and it was Domain Tools, LLC vs. Russ Smith and Consumer.net LLC. And essentially what happened was that Russ Smith objected to the fact that Domain Tools which is an archiving and data and DNS and who is website, was actually archiving his website, Russ Smith's website, at Consumer.net, and putting it into their database so that other third people could go through and see what his website looked like at particular points.
Enrico: Clients often ask whether or not the terms of service or other website agreements that are listed at the bottom in the footer of almost all websites are enforceable. My name is Internet law attorney, Enrico Schaefer. I work for Traverse Internet Law, and today we're going to be talking about whether or not particular terms of service or website agreements are, in fact, enforceable as drafted by the website owner.
An interesting case just came down (see case below), and it was Domain Tools, LLC vs. Russ Smith and Consumer.net LLC. And essentially what happened was that Russ Smith objected to the fact that Domain Tools which is an archiving and data and DNS and who is website, was actually archiving his website, Russ Smith's website, at Consumer.net, and putting it into their database so that other third people could go through and see what his website looked like at particular points.
And so, he sent two threat letters to Domain Tools, indicating that he believed there was copyright infringement going on, perhaps also trademark infringement, as a result of the archiving of the website, and then the display of the website on Domain Tools. And so, what Domain Tools did is, they, through their firm, filed a preemptive lawsuit as a plaintiff against Russ Smith, asking the court to declare that this was not copyright infringement or trademark infringement.
So they filed the lawsuit in the United States District Court for the Western District of Washington in Seattle, where Domain Tools is located. And, of course, Mr. Smith, operating pro se filed a motion to dismiss, saying there was no jurisdiction in the great state of Washington, in Seattle. The court decision, which is included in this show, found in favor of the defendant, Smith, finding that there was no personal jurisdiction. One of the interesting issues is that domaintools.com website agreements, their terms of service, actually had a jurisdiction and venue clause in it saying by using this website, you agree to jurisdiction in the state of Washington, in Seattle, and that you will not object to venue in that location.
Well, the court did not do much by way of analysis of case law, but the court did find that those terms of service were not enforceable against Mr. Smith, the defendant, in that lawsuit. Now, Internet law is still developing, and it is still unclear exactly how enforceable various provisions when within the terms of service or privacy agreement or website agreement will actually be enforced by the court. And here's what you need to know if you operate a website, and you are looking to include terms of service, privacy agreement, other website agreements, as the terms of the contract between you and your website visitors or you and your registered users.
But those things may not actually get enforced by the court. Now, there's no real downside to including them because, at least, you're giving yourself a chance for enforcement of those contract terms between you and your website visitors or registered users, but they are not automatically enforced. Now, in this particular Domain Tools case, the court decided that it was not going to enforce the venue and jurisdiction provisions. One of the interesting facts that may have been important is that Smith in his first letter specifically indicated that he was not agreeing to the terms of service that were included on the website.
And so he rejected the website agreements and rejected the concept that just by visiting the website, he had in fact agreed. Another interesting fact in the Domain Tools case is that the judge noted that there was no consideration for the provisions in the terms of service included in the bottom of the website. Now, you can say what you want about that particular item, whether or not there was consideration to support that particular term.
The court did not analyze that particular issue in the Washington state case, but simply concluded that there was no consideration to support that particular venue and jurisdiction clause within the website terms of service. Now, what I'm going to tell you is this. There is a lot of variation as to how different courts, both state and federal, are dealing with the issue of enforceability of particular website agreement terms found therein. There is no uniformity right now within the states or federal system as to what is going to be enforced and what is not. They are subject to attack.
If you are a website owner and you want to draft a website agreement, you should match that agreement to the risks inherent in your particular business model. And you're going to be balancing two factors. Number one, you want to be fair to your users and create an environment that they are going to be agreeable. Just look at the push-back that people get in terms of Facebook, because they don't like the terms of service or privacy agreement of Facebook. So you don't want to alienate your community.
On the other hand, you do have to protect your business and your business model, making sure that you are including all the key elements in the website agreement so that you're not betting the company if you, in fact, do get sued. I think that one of the important factors in this particular Washington state case for Domain Tools was that Domain Tools had gone on offense and sued this person who had simply sent two threat letters.
I read the opinion, and I see a judge who was looking to penalize Domain Tools for filing the suit. Now, I think the suit was legitimate. Domain Tools had, in fact, been threatened, and they, I believe, had the ability to try and resolve their rights. Now, one of the interesting things is that the court did dismiss the action with prejudice, which is very unusual. Usually, it's without prejudice. Dismissal with prejudice oftentimes means that you can't refile anywhere. But then the court says, because jurisdiction does not exist, the court need not reach the sufficiency of plaintiff's complaint.
Well, there's an unclear issue here as to whether or not Domain Tools could refile this suit in any jurisdiction as a result of the judge's with prejudice dismissal. So you have to be careful. If you're going to step into court, there are a lot of variations. One of the biggest variables is, in fact, the judge. So when you file a lawsuit, you may think the law's on your side. You may think your terms of service and website agreements and privacy agreements are enforceable, but a judge may disagree. And judges aren't necessarily sophisticated in technology, the Internet, the worldwide web, DNS or other key issues which may be factors in your particular case.
So be careful out there. Try and resolve disputes when you can. This is Internet law attorney, Enrico Schaefer, from Traverse Internet Law. We'll see you next time.
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