California EULA Lawsuit

burgburgburg writes "News.com has this story about a California woman suing Microsoft, Symantec and others, seeking class-action status on behalf of all Californians who've bought software including Norton Antivirus 2002, Norton Systemworks and Windows XP Upgrade. She claims that the companies have devised a scheme to sell software licenses without allowing purchasers to review the license prior to sale. She also claims that people who reject the license cannot return the software to the store. She bases this on her rejecting the EULAs for the software mentioned above, going back to CompUSA and being told she couldn't return them because the boxes were opened."

Slashdot is missing the good stories!

[Anonymous Coward]

Like Dell Dude arrested for pot possesion [thesmokinggun.com]. Dude, he's going to jail!

Used to be done differently

[Limburgher]

Time was that the disks/CDs came inside a seperate envelope with the EULA printed on the outside, with a seal sticker that had printed on it that"by breaking this sticker you agree to the EULA" and any retailer would accept a return of a product with this envelope unopedned, because the software could not have been copied, which is why CompUSA et. al. will not accept opened software nowadays. Typically, the CD is just in a jewel case without even shrink wrap, and the EULA is displayed prior to install, but well after the package is opened past the point of No Return. Going back to the envelopes, while a pain, would get them back out of this legal grey area. I think he plaintiff here has a good, solid case.

We'll see

[bezuwork's friend]

I sincerely hope this succeeds. The one case I know of on point is ProCD v. Zeidenberg. Unfortunately, the judge in that case held the license enforceable as many transactions in our society have conditions on them which the buyer does not know about at the time of the transaction. Entertainment tickets, for example, were mentioned, IIRC (post-transaction conditions might include no taping at the event, etc.). Under the judge's view in that case, a EULA would likely be enforceable.

As with most people here, I don't agree with this assessment. I wish this group success.

Re:Who is responsible?

[Anonymous Coward]

Most major vendors of software, can't say all, either will not give credit back to the stores for open packages OR they will incurr a reduced credit for items that are open thus causing the store to take the hit regardless. Is it the stores fault for the customer not accepting terms? Is it the customers fault for not accepting terms? Is it the vendors fault for making software with unacceptable terms and not disclosing those terms until all the parties mentioned are already too involved?

Re:that is all wrong

[Entrope]

The only hold that shrink-wrap or click-through licenses have at all is because customers read them. Courts have not (so far) cared that customers skim or skip the license agreement; they have said that since the customer makes a particular action (opening the sealed package with EULA printed outside, or clicking "I agree" beneath the EULA text box), the customer agrees to the license.

For a shrink wrap license, you cannot agree without opening the external box. For a click through license, you cannot agree without running software from the install media. Many retailers have policies against you returning software after doing the first. Many software manufacturers will say that only pirates want to return software after doing the second. It is this intermediate stage -- you can neither move forward nor back -- that is being challenged by the lawsuit.

That is her point

[Anonymous Coward]

She could NOT read it without PURCHASING it. See, not so hard to understand after all. She then chose to not enter into the "contract", as allowed by law. Now she wants her money back. So easy and simple of a concept.

Symantec Return Policy is ok!

[Anonymous Coward]

I purchased a copy of Symantec Systemworks (or was it Disk Doctor?) not too long ago trying to fix a screwed up NTFS partition. Long and short of it is, it didn't work on NTFS (having found that out inside the manual, not on the outside of the box!). But even though all that was a pain in the ass, I simply filled out a form, and got my money back. No questions asked. Symantec just said, "Make sure you destroy the disks." It was painless, and very fair.

If I had tried to bring it back to Staples where I bought it, I have a feeling I would've gotten the same deal this woman got though....

Re:If a EULA is illegal...

[Entrope]

Why would GNU be illegal? GNU is a software movement, not a license.

The General Protection License (GPL) would be enforceable because it explicitly does not restrict how a user can use the software -- it only restricts how a user can redistribute the software. The GPL (at least through v2) is not a EULA; it is a redistribution license, based on copyright law rather than on the applicability of contract law to software sales.

read the EULA...

[Archfeld]

it says if you don't agree take it back to the place of purchase for a refund. It seems like the makers are putting the onus on the sellers without giving them anything but grief for doing it, and as usual, the 'consumer' loses.
The local COMP-USA, has a LAN game room, and for games in particular, they will either open one or already have it installed on a machine and will let you try it out...

Re:Who is responsible?

[bwt]

The EULA states (usually) that if you don't agree with the terms of the license, to return the software to the retailer. But the EULA isn't binding on the retailer, so they aren't obligated to take it back if it's opened.

This is exactly why a EULA is not enforcable, actually. You buy the software at a retailer, and you are the "owner" at that point. You have created a valid contract of sale by giving cash for goods. The standard argument for EULA enforcability is that the EULA is part of the contract of sale, but that is untenable because the software maker (in this case Microsoft) is not a party to that contract and cannot retroactively modify it. Thus to be enforcable, the EULA must stand on its own. But 17 USC 117 gives the "owner" the right to install software on "a" machine. Thus the EULA gives the owner nothing that he didn't have as a result of "first sale", and the EULA fails to be an enforcable contract due to lack of "consideration".

The world seems to be unaware that when you own a copy of software, you DO NOT NEED A LICENCE TO INSTALL IT ON A SINGLE COMPUTER. This is the black letter law. 17 USC 117

Re:We'll see

[ebacon]

If the license is enforcable then presumable this clause is as well:

IMPORTANT - READ CAREFULLY: This End-User License Agreement ("EULA") is a legal agreement between you (either an individual or a single entity) and Microsoft Corporation for the Microsoft software product identified above, which includes computer software and may include associated media, printed materials, and "online" or electronic documentation ("SOFTWARE PRODUCT"). The SOFTWARE PRODUCT also includes any updates and supplements to the original SOFTWARE PRODUCT provided to you by Microsoft. Any software provided along with the SOFTWARE PRODUCT that is associated with a separate end-user license agreement is licensed to you under the terms of that license agreement. You agree to be bound by the terms of this EULA by installing, copying, downloading, accessing or otherwise using the SOFTWARE PRODUCT. If you do not agree, do not install or use the SOFTWARE PRODUCT; you may, return it to your place of purchase for a full refund.

So, somethings got to give: Either the EULA is enforceable and you CAN return the product for a full refund, or the EULA isn't enforceable.

Re:Finally.

[terrymr]

It's possible to return software for a refund if it's defective ....ie doesn't perform as claimed (rather than defective media) The Uniform Commercial Code gives you that right.

Unfortunately you're at the mercy of the store if the goods aren't defective and you try to return them.

I think it's fair to say that the manufacturers and stores have conspired together to stop you returning software, even if you choose not to accept the license.

Microsoft & OfficeMax

[joelparker]

Purchasing does not imply agreement.

The problem is the store's return of "no open-box returns" versus the Microsoft license saying "if you do not agree to this, return this to the store for a refund." Because the license is inside the box, it's impossible to read ahead of time.

True example: I bought XP at OfficeMax, opened the box, read the license, decided it wouldn't work for me, and tried to return it. The runaround was amazing, with five managers at OfficeMax and three senior people in MS customer service.

The lesson: Buy it and open the box in the store. That way the manager knows you haven't installed it, pirated it, or switched it. Once you leave the premises things get much more complicated.

Cheers, Joel

Re:Used to be done differently

[GiMP]

I saw a Gateway2000 computer shipped with Windows95. The Windows95 disk was sealed with such a sticker that said you agree to the EULA by breaking the sticker; however, there was no printed EULA. You could only retrieve the EULA by breaking the seal and inserting the disk into your cdrom reader.

Re:Implication?

[susano_otter]

Oral contracts are only binding if the terms of the contract are orally communicated such that both parties understand what they are agreeing to, or if the agreement itself is orally communicated such that both parties understand that they have so agreed.

Implied contracts likewise only binding if the terms of the contract are clearly implied to both parties, or if both parties clearly imply that they understand the terms of the contract, and are agreeing to those terms.

Since the terms of the shrinkwrap EULA cannot possibly be known prior to the purchase, purchasing the software cannot possibly imply agreement to those terms.

IANAL, so the preceeding was pulled out of my ass, of course. Enjoy!

Re:Who is responsible?

[Idarubicin]

There are also a few EULAs which consider consent to be physically opening the package which contains the software (Old School M$, and Iomega).

On the other hand, a lot of these older pieces of software shipped with paper copies of the license agreement. The software media were inside a sealed envelope within the box, so you could read the license agreement before deciding whether or not to open the envelope with the disks inside. Seems like a system that made sense, and it did at least tip its hat towards trying to make the contract binding.

Whether or not the contract provisions were legal in the first place is for another post, but at least MS used to recognize that you needed to be able to read (and agree to) a contract before you could be bound by it.

That recognition seems to be gone now.

Re:Just buy a shrink-wrapping machine!

[EvilTwinSkippy]

Pick it up at home depot. Shrink-wrap cellophane is sold as a weatherizer for windows. (Rimshot). Wrap your package like a [holiday] present, and hit it with a hair dryier. Viola. May also work with standard kitchen plastic wrap as well.

Re:Who is responsible?

[rajpaul]

If you read the suit, it states she did indeed contact the vendors. The suit states that Microsoft and Symantic did offer refunds, but would not reimburse shipping expenses or sales tax. The suit claims this violates commercial code laws. See paragraphs 10 & 11 on page 7 of the suit for details(the PDF of the suit is linked to from the CNet article).

Re:What next, Class Action Suit against swimwear?

[Amazing Quantum Man]

But the situation was this.

1. Woman goes to CompUSA. Buys retail boxed software.
2. Woman opens box, reads EULA (which she cannot read w/o opening box).
3. EULA contains terms she finds onerous. The EULA specifically says, "return to vendor for refund if you do not accept".
4. Vendor refuses to make refund.

I assume she's suing all of them because MS and Symantec won't give direct refunds if the vendor won't make good, and the Vendors (CompUSA and Worst^WBest Buy) because they have her money and won't make good per the EULA, so she can't get it back.

Federal contract law

[yerricde]

17 USC 117 grants installation right to the owner of software. State contract law cannot set that aside.

I am not an attorney, but as far as I know, there also exists a federal contract law that kicks in when a party agrees to waive a right under federal law.

Re:Implication?

[plague3106]

There is a difference between contacts and the law. A contract is not law, nor is law a contract. Laws typically embody rules society agrees upon, and most likely have some moral backing.

A contract is simply a binding agreement between two parties entered willingly. Its been pretty well esablished that both parties entering the contract must agree to it, knowning what they are entering into. Now, if you get handed some paper and don't read it, thats your fault, but you are supposed to be reading these things before signing. Thats not possible with an EULA.

Re:Are EULA's legal?

[Anonymous Coward]

Click throughs have legal problems in some juridictions. Also, some software bundling schemes have run afoul of commercial product laws, particularly in NY I think.

But EULAS in general are untested. There are legal theories and web sites that'll point to some crucial case, but that's usually just the opinion of the writer. It's really unclear.

I'm still trying to figure out when contracts came into play that were legally binding that do not include a signature. For example, I've always wondered about those signs you see at Home Depot or Lowes that say something like "you are entering a working warehouse"--I'm not sure if they are simply cautionary signs, or legally binding. If Home Depot has a hot water heater fall off their shelves and lands on your kid, I would hope you could sue successfully.

Likewise with EULAs. The only areas that I know where similar "you didn't sign but we have your consent" is on traffic tickets (if you don't sign, most states enter a guilty plea) and one direct deposit/withdrawal transactions.

How does one enforce a contract or license where the participant has not signed? I've always wondered how, say, the banking institutions say "you must sign this check for it to be valid" (which makes obvious sense) but can withdrawal money from your account without a signature on file (most direct withdrawal such as mortages you usually sign for, but I know credit card companies tend to not have you send in a signature consenting to such actions for their files).

More on point, I think this woman has a good chance. The "barrier" is so low, it's ridiculous. All the stores have to do is print up the EULA and place it next to or on the product itself.

Re:Who is responsible?

[danb35]

The U.S. Commerical Code explicitly states that if you do not have the opportunity to inspect merchandise before purchase, you have the right under law to return the merchandise for a full refund

There is no such thing as the U.S. Commercial Code. There is something called the Uniform Commercial Code (not at all the same thing, not federal law, and not adopted in its entirety by every state), but I'm not aware of any provision in there (it'd be in article 2) to this effect. There are provisions regarding a buyer's right to inspect goods (2-513), but nothing affirmatively establishing a right to return the goods for a full refund.

IAAL, but you're not my clients, this isn't legal advice, etc.

Re:That is her point

[wayne530]

This is an interesting case because, contrary to what she claims in her suit, I doubt that software vendors are working with retailers to trick customers into purchasing their software. Back in the old days, before every household got a cd burner, it was possible to return open software, music, etc. Many retailers had some type of money back guarantee where if you simply didn't care for the product, you could return it. However, what they quickly realized was that everyone and their brother was simply just copying said software/music and returning the original. In order to reduce piracy and theoretically to keep prices on software down, stores have enforced the policy that you cannot return open software/music unless it is defective, in which case you can exchange it for the same exact title.

So my question is, how do you balance the fairness of being able to read the agreement prior to purchasing without sacrificing the very policies which help prevent software piracy? Sure you can print the license on every box, but is that really practical?

Re:Courts have not said that.

[Entrope]

How many cases do you want? One? [freibrunlaw.com] Two? [prestongates.com] Three? [infoworld.com] A Google search for "shrink-wrap license court case" turns up these and others; judging from that, more shrink-wrap licenses have been upheld than overturned.

You might argue that some or all of those cases gave "no extra rights" to the licensee. Since you did not specify "extra rights" beyond anything in particular, I assume you wanted wiggle room to squirm out of concrete examples.

Re:she didn't scream loud enough

[Anonymous Coward]

If you even need to return anything just follow these two simple steps:

1. Tell them the product you perchased was defective. They will give you a new one in an unopened box.

2. Come back some time later and say you don't want it. Since you are now returnining it in a unopened box they will take it back with a smile.

Just rember to talk to different people for steps one and two.

Happy returning!

Re:Are EULA's legal?

[Anonymous Coward]

You're close. Software licenses are unenforceable. This basically means you can ignore them. Microsoft , Symantec, the SPA, the BSA, and the rest of the shrink-wrap software selling community have lied to you. Once you have assumed ownership of a software program you have a number of rights as detailed here [cornell.edu]. You can also check ProCD v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996); Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F.2d 91 (3rd Cir. 1991); and Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988); and Arizona Retail Systems, Inc. v. The Software Link, Inc., 831 F. Supp. 759 (D. Ariz. 1993). Note that the ProCD case is the only one where licenses were held to be enforceable. At any rate, EULA'a are unenfoceable on two grounds: 1. They are not contracts because they can only be viewed after the transaction has already taken place(this is relevant to case mentioned in the article). 2. Even if they were contracts federal law states that they cannot be enforced.

As for the woman mentioned in the article... well her case works on the assumption that the EULA is actually valid(which it is not), so she should actually lose this case, but only because she was never actually bound by the terms of the EULA to begin with.

Re:Microsoft & OfficeMax

[91degrees]

You mention "The problem". The fact is that there are many problems.

Microsoft made an agreement on behalf of the store. The store wasn't consulted. They have no obligation to refund your money, unless you try to claim that the item sold was not as advertised. My EULA says, 'This End-User License Agreement ("EULA") is a legal agreement between you (either an individual or a single entity) and Microsoft Corporation'. No mention of the store I bought it from.

The other problem is the industries perceived need for licences. Common sense would suggest that you purchase a copy of the software, and that implicitely gives you the right to make sufficient copies to actually use it. Microsoft is certainly not losing a sale because someone copied Windows to their hard disk, and then copied it to RAM. However, legal people seem to think that they need to make this clear.

In the beginning this was actually not too bad. I once looked at my MS-DOS licence. I couldn't find a single clause that I disagreed with. A licence for a C compiler allowed me to install it on multiple machines as long as I only use it on one at a time. It actually made it clear that I had certain rights. They gradually realised they could erode our rights by the same mechanism.

Then we have industry paranoia - Mainly from the legal and marketing branches. Engineers tend to be happy that people aren't making illegal copies of their software. The industry feels that even though the law may prevent you from setting up a huge illegal software empire, this isn't enough, and they have to add this to the licence. As though a criminal will feel bound by a licence, but not by the law.

Finally, we have extra arbitrary restrictions, such as the right to send an expert to fine tune their software for reviews. Actually, it gives them permission to block reviews! None of this is particularly fair for someone who has smple purchased a piece of software in order to do some word processing or play a few games.

The thing is, the store is not at fault in any of these areas. They had some justification to give you the runaround. Opening it in the store may help, but that's not really the point. The point is that licences are unethical, and the software companies are to blame.

Re:Are EULA's legal?

[poot_rootbeer]

I had thought that EULA's were deemed illegal, but companies still used them because consumers didn't know any better.

My understanding (and I welcome any citations that prove me wrong) is that there has never been a court case where End User License Agreements were declared to fundamentally violate any law -- there may have been cases where certain EULAs or certain clauses of certain EULAs have been thrown out by the court, and legal pundits may have declared that EULAs are unenforceable and meaningless, but none of that is enough to establish a legal precedent nullifying EULAs entirely.

Re:Used to be done differently

[CycleMan]

The envelope method is still in use. When I recently purchased a variety of Adobe software, each of the 5 (yes, five, I was feeling rich) different programs had a sealed 5x8 inch envelope with the basic use agreement on one side and the software inside.

Now if only Adobe made an OS.