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In This Issue
Many businesses prepare fill-in forms for their customers' use and also prepare form contracts, such as sales or service agreements, that consist largely of standard, or "boilerplate," language. Form documents have value because they enable their owners to work more efficiently and also because of the time, effort, and expertise required to create them. But how can businesses protect such documents? Does copyright law offer protection for fill-in forms and form contracts? The answer is yes —with several caveats. U.S. copyright law protects original works of authorship fixed in any tangible medium of expression. Obviously, any document containing text is likely to qualify as a work of authorship fixed in a tangible medium. The test, then, is whether a form document has enough originality to qualify for copyright protection. In the copyright context "original" does not mean unique or even novel; thus, very little originality is needed. A leading Virginia case on the copyrightabilty of form contracts, Phoenix Renovation Corp. v. Rodriguez, 439 F. Supp. 2d 510, 516 (E.D. Va. 2006), says the originality required is minimal, being modest at best. However, originality does require more than merely refraining from copying or even paraphrasing; an author must add some meaningful, not merely trivial, originality. "Blank forms," those with section headings but no instructions, generally lack even the minimal originality needed for copyright protection. Copying such forms is deemed to be "copying for use" and therefore permitted by the seminal case Baker v. Selden, 101 U.S. 99 (1879), now reflected in U.S. copyright law, which expressly denies copyright protection to ideas, systems, methods of operation, etc. The Baker doctrine is also reflected in U.S. Copyright Office regulations, which preclude copyright protection for works designed for recording information which do not in themselves convey information. Examples include time cards, graph paper, account books, and order forms. However, fill-in forms that contain fairly detailed instructions may be subject to copyright protection on the grounds that the instructions have sufficient originality to make the forms original works of authorship. For example, courts have upheld copyright protection for answer-sheet forms that provide spaces for indicating the correct answers but also convey certain minimal information and for record-keeping forms accompanied by instructions for the forms’ proper use. Form contracts, generally being more complex than fill-in forms, have more often received copyright protection, especially in the last few decades. In addition to noting form contracts’ originality (low but sufficient), courts have seemed willing to grant copyright protection to such documents partly because of their owners’ "sweat equity." For example, in Prof'l Sys. & Supplies Co. v. Databank Supplies & Equip. Co., 202 U.S.P.Q. 693 (W.D. Okla. 1979), the court, finding a "Promissory Note, Disclosure Statement, & Security Agreement" protected by copyright, commented on the time, effort, and expertise that had gone into creating and marketing the form. But copyright protection may not be extended to all portions of a form contract. In Phoenix Renovation Corp. the court found that the plaintiff’s "Interior Repipe Agreement" contained language tailored to reflect the peculiar nature of the polybutylene pipe replacement industry, especially class action settlements involving polybutylene pipe systems. That language, the court said, entitled the document to copyright protection even though the contract contained considerable boilerplate language. However, the court excluded copyright protection for such common phrases as "timely and workmanlike manner" and "acts of God, labor disruption, or client default," which the plaintiff had copied from other contracts. Thus, there appears to be a sliding scale for evaluating the degree of copyright protection given to fill-in forms and form contracts:
Consult copyright counsel if you have questions about whether and to what extent your form documents may be subject to copyright protection. Copyright counsel can also advise you about the steps you can take to obtain the benefits of such protection—for example, registering your copyrights, using proper copyright notices, and including information about the permissible and impermissible uses of your form documents.
On February 12 the Federal Trade Commission issued a report entitled "Self Regulatory Principles for Online Behavioral Advertising." The report describes the FTC’s ongoing investigation of online behavioral advertising, which the FTC defines as "the practice of tracking an individual’s online activities over time—including the searches the consumer has conducted, the web pages visited and the content viewed—in order to deliver advertising to the individual’s consumer’s interest." For Web site owners the most significant aspect of the report is that it lays out four "self-regulatory principles" with which owners are asked (but not ordered) to comply. The FTC has broadly defined the information to which the self-regulatory principles apply as all data that could be "reasonably associated with a particular consumer or computer or other device, regardless of whether the data is 'personally identifiable' in the traditional sense." Thus, the principles may apply to internet-protocol ("IP") addresses, "cookie" data, and other information that could allow a set of behaviors or actions to be associated with a particular individual or computer user even if that person is never identified by name. However, the FTC has limited the scope of the principles by excluding from their coverage (1) "first party" behavioral advertising, which is behavioral advertising by and at a single Web site, and (2) "contextual advertising," which is advertising based on an individual’s current visit to a web page that involves no retention of data beyond that necessary for the immediate delivery of an ad or search result. The FTC reasons that these activities are more in line with consumers’ expectations and therefore need not fall within the scope of the principles. Each of the four principles covers a different area. Under the first principle, each Web site where data is collected for behavioral advertising should contain a statement that (1) data about consumers' activities online is being collected at the site for purposes of online behavioral advertising and (2) consumers can choose whether or not to have their information collected for such purpose. In connection with the second item, the Web site should provide consumers with a method to exercise the "opt-out." The second principle provides that a Web site should provide reasonable security for data collected. Whether the security provided is "reasonable" depends largely on the circumstances. In addition, companies should retain data only as long as is necessary to fulfill a legitimate business or law enforcement need. The third principle provides that a company must "keep any promises" it makes with respect to how the company will handle or protect consumer data, even if the company’s policy changes at a later date. Under this principle, a company should obtain consent before using previously collected data in a manner "materially different" from that promised by the company when it collected the data. The final principle focuses on "sensitive data" and provides that such data should be used for behavioral advertising only if the company has obtained the consumer’s prior consent. Acknowledging that there is a lack of clarity about what is considered "sensitive data," the FTC states that the definition may often depend on context. The report lists the following (non-exhaustive) examples of sensitive data: financial data, data about children, health information, precise geographic location information and Social Security numbers. In the report’s conclusion, the FTC notes that the four principles are part of an ongoing process. The FTC says it intends to monitor the marketplace closely, including evaluating the development of self-regulatory programs, conducting investigations where appropriate, and meeting with companies, consumer groups, trade associations, and other stakeholders to keep pace with changes going forward.
Although it is a powerful business tool, the Internet can create liability for a company operating a Web site. To avoid such liability, companies doing business online often adopt "terms of use"—essentially a document governing what a user may do while accessing the Web site and disclosing what the Web site owner may do with the user’s personal information. However, simply adopting terms of use is not sufficient to avoid liability; a business must demonstrate that the user agreed to the terms of use, thereby forming a contract with the company. Two types of online agreements have been developed to demonstrate the user’s assent to their terms: "click-wrap" agreements and "browse-wrap" agreements. A click-wrap agreement presents the user with a message stating that the use of the Web site is subject to certain terms and conditions. Before proceeding to the remainder of the Web site, the user is required to click an icon to the effect of "I agree" or "yes" or manifest some other form of express assent. The courts that have examined click-wrap agreements have found them enforceable on the grounds that an affirmative "click" demonstrates acceptance. In fact, some courts have held that click-wrap agreements are one of the most effective ways to bind users to a Web site’s terms of use. Although courts have held that click-wrap agreements provide a reliable method for establishing assent, many online companies prefer browse-wrap agreements, which are arguably a less reliable method. The main reasons for this preference are that browse-wrap agreements are more conducive to attractive web pages and are less intrusive to users. Browse-wrap agreements are usually indicated by a link at the bottom of a Web site’s homepage. Often the link is accompanied by a notice stating that by continuing to access the Web site, a user is presumed to have assented to the browse-wrap agreement. However, the user is not required to read the agreement or to take any affirmative steps to express assent. The terms of use are there if the user wishes to access them—assuming that the user even reads to the bottom of the homepage and knows the terms exist. Because of this lack of intrusiveness, courts are often reluctant to enforce browse-wrap agreements. Thus, Web site owners who rely on browse-wrap agreements may be doing so at their own risk. A company wishing to take advantage of the aesthetically pleasing and user-friendly nature of browse-wrap agreements can take steps to increase the chance that its agreement will be enforced. These include providing: (1) adequate notice of the existence of terms of use; (2) a meaningful opportunity to review the terms; (3) adequate notice of what will be considered assent to the terms; and (4) a record that the specific action constituting assent was taken by the user. For example, many Web site owners highlight their browse-wrap terms of use with a hyperlink that is underlined and in a color different from the rest of the text on the page. Also, other owners expressly word the hyperlink text to indicate that the terms of use constitute an agreement affecting assenting users' rights. In addition, the terms of use themselves often specify the type of action that shows a user’s acceptance, such as "by using this Web site." Finally, some Web sites automatically retain certain programming records or "click-stream" data as proof that a user took the action deemed to be entering into the browse-wrap agreement. In the end, the appropriate type of terms of use is the one that best achieves the Web site owner’s goals. Click-wrap and browse-wrap agreements each have advantages and disadvantages. When designing its Web site, a company should carefully consider the foregoing factors and consult legal counsel familiar with the different types of terms of use and how they can be enforced.
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