Hey Zoom! Is that really in my EULA?

Joel MacMull: 

In looking at the Zoom agreement, I actually just focused on the five or six paragraphs that are specified in the top half of the page.

 I did that because I suspected that this effective date, which of course was just last week, March 31st, 2023, to the extent that amendments were made, they were, and I guarantee you they were because I suspect Zoom was concentrating on those sections. Given that my expectation is these are the freshest sections, I wanted to walk through, perhaps why Zoom has taken the action it has and in particular as it relates to, I know a provision that’s near and dear to your heart, as well as mine, the arbitration provision in paragraph 27. 

 It is rare, that I will give a hat tip to good lawyering. But there’s a lot of great things going on in this paragraph, and it’s sub paragraphs, that I certainly must, in the interest of full candor, acknowledge is a pretty smart, impressive series of provisions. Now, that doesn’t mean that they’re not particularly onerous, to someone who’s adverse to Zoom, but if you’re Zoom, you’ve got a pretty impressive tool here for reasons we can certainly discuss. 

Mark Miller: I had some highlights in the first couple section 1.1 and 2.1, but they’re minor compared to when I hit Section 10, the uses of customer content.

 I want to read one of these, because it just stopped me. I got chills. It said. 10.2. Yeah. You agree that Zoom compiles and may compile service generated data based on customer content and use of the services and software. 

Here’s the, thing that got me: you consent to zoom’s access, use, collection, creation, modification, distribution, processing, sharing, maintenance and storage of service generated data for any purpose.

I’m looking at 10.2 and I want to pull in 10.3 at the same time as you’re going to comment on this and it says, Zoom, may redistribute, publish, import, access, use, store, transmit… there’s a whole litany of stuff… transcribe, create derivative works and process the customer content. 

Joel MacMull: Derivative works is a term of art, and that jumps out at me because there’s something in copyright law known as a derivative work, which means that it is not typically a violation of the copyright, but rather it may be inspired by it. But it really is its own freestanding creation.

So to your point, in as much as Zoom is relying on your data to create something to alter something. it’s therefore saying you acknowledge that we’re doing it and you’re further acknowledging that which we’ve created, which is reliant on your widget, I would make the argument they don’t say it like this, but by presumption would not be copyrightable among other things. 

Mark Miller: I’m going to keep drilling down into Section 10 because that’s the one I was going to concentrate on with you. 10.4 then goes, you agree to Grant and hereby grant Zoom a perpetual worldwide, non-exclusive blah, blah, blah. We’ve been through that with other contracts before. 

But again, it goes down to we can transcribe, create derivative works and process customer content to perform all acts with respect to that customer content. Wow. 

And then 10.6 in seemingly contradiction says, “You agree that you are solely responsible for the customer content.” Hold on. Didn’t you just tell me you can slice and dice it any way you want to. Am I responsible for that? 

Joel MacMull: The problem is, and I don’t know the answer is, I don’t know how in the absence of these, and I think you’ve view, so do I frankly, these sort of draconian provisions where they say we own everything that shall ever come into your mind, so to speak, I just don’t know how these various platforms would operate if they weren’t that draconian. 

Mark Miller: But the problem, Joel, for me, as I read these my initial response was, what in the hell are you doing looking at my content? Because my content has nothing to do with Zoom.

Joel MacMull: How can you say that though? you can upload your contacts to Zoom.

Mark Miller: I’m talking about the recording you and I are making right now is uploaded to Zoom. That’s my content. The assumption when I read these is they have view into my current content and they can use it any way they like to. 

Joel MacMull: I think that’s right.

And to which their response would be, if you don’t like it, then pick up your iPhone and FaceTime with each other. My point is we’re faced with this all the time. Facebook does the same thing. I think we talked about it. 

Now it does beg the question. It does beg the question, what is the need? I don’t know how these platforms would operate in a landscape in which they didn’t have total control, but it does beg the question. What is the need for the total control over our data? And I think having thought about this for all of 10 seconds, I think it comes from the standpoint of by saying we own it, not withstanding the fact that we may not need to own it for purposes of further developing our platforms, but I suspect it may come from a place and again, I guess I’m a lawyer and I’m jaded, but trying to insulate themselves from any liability. 

If I put you on notice that I own everything that you shall ever stroke into my platform, then I am substantially curtailing your rights at the end of the day to come back and claim that I have somehow unlawfully procured your content.

Mark Miller: Yeah, I get that. But I’m looking at, section 10.4. Zoom says they have a perpetual worldwide license where they can reproduce, share, use, display, copy, distribute, modify, and process customer content. So they can modify my content and use it any way that they like.

And by the way, in another part of this agreement, they also say that they can use you as a customer reference anytime they want to. For me, this was worse than anything you and I have looked at before as far as them implying ownership and the ability to do anything that they want with the content that I’m producing.

Joel MacMull: And let me based on this, and you’re right. that’s the, there’s no dispute. That’s what it says. Now, let me give you a problem. In my hypothetical, you’re an evangelical Christian. Zoom decides that it’s going to support, some sort of pro-choice campaign. They now take your data and they’re using that in some sort of, I don’t know, promotional clip in support of their pro-life campaign or vice versa. I don’t care. 

it seems to me, and not only because of this provision, but others too, display, copy, distribute, translate, create derivative works… you’ve got no claim whatsoever. 

No claim whatsoever with respect to. suggesting most obviously in that example that there has been a violation of your, it’s a right of publicity, which is itself a right to privacy, which is ironic. 

Mark Miller: The right to privacy is what I’m arguing here. If I’m recording a private meeting on the Zoom platform, everything here implies to me that they have access to that and they can use it if they like to 

Joel MacMull: I agree with you, but I go one step further, including a course if it’s for a commercial purpose or not, and in connection with a political position that you’re staunchly opposed to.

Mark Miller: In a legal sense, how do you call bullshit on this paragraph, on this whole section? 

Joel MacMull: I don’t, I don’t call bullshit. I do call SOL, it is what it is, and, I’m sure , any other commercial lawyer would say, well, if you don’t like it, there’s the door.

 That’s actually a great segue because let’s talk about from the consumer’s perspective, if you are aggrieved. What are you going to do? May I suggest that with this in mind that we jump to paragraph 27? 

What’s interesting about this, is that if you read this, It begins, read this section carefully as it limits our liability to you. 

Mark Miller: Oh, this was the one where the entire section is in caps?

Joel MacMull: Yes. Wherever I see caps, we all do it as lawyers. We read it, we see it, we draft it, but it’s just so stupid. 

What’s interesting here is that as you read each of these bullet points, one of the things I find myself asking, because they’ve done a good job of effectively limiting any and all liability, is you got nothing left. You can’t sue us for anything. 

And the irony about this is that they’ve completely insulated themselves. And then in the next paragraph, spend five pages about the process by which you could sue them, in which case you’d never be able to recover anything anyway, because of paragraph 26, it’s what we call belt in suspenders and then some.

 The interesting thing here is, and this actually I thought was very smart, so much so that I may use it, was the last bullet point. As a lawyer, I see this all the time. For example, when I’m hiring, big accounting firms, to have one of their people serve as an expert witness.

So I’ll get this language where they’re limiting liability and they’ll say, Even if this is unenforceable, under no circumstances will you be able to recover the amount that you paid for the nature of our services.

But this goes one step further and says, In the 12 months preceding the event or circumstances giving rise to such claims. Admittedly, I’ve never seen that before. So there’s a time limitation. So not only do you not get to recover more than what you spent, but that is further limited by a 12 month duratinal period.

Mark Miller: So you, as a lawyer, you’re looking at this and saying, oh man, I wish I would’ve thought of that. 

Joel MacMull: I think it’s good. I think it’s good. I don’t do a tremendous amount of services contracts, and it’s not the kind of thing that would’ve typically find its way into a settlement agreement, but I think it’s good language.

But let me pluck out a couple of things in paragraph 27, which I think are really interesting and notable. 

Number one is, and not surprisingly, I’m pretty sure this is a newfangled provision because it says at the end of the preamble to 27, this arbitration agreement supersedes all prior versions. 

They talk about, of course, covered disputes. Which basically is anything and everything. But there’s an exception. In that same first paragraph, 27.1, they talk about, for purposes of this arbitration agreement, a dispute will also include disputes that arose or involve facts occurring before the existence of this, or any prior versions of this agreement, as well as claims that may arise after the termination of this agreement. So they’ve got this agreement applying retroactively to all claims, and of course prospectively.

Mark Miller: You might think it’s cool as a lawyer, but is that part enforceable? You can’t force an agreement upon me in retrospect. 

Joel MacMull: Here’s the thing. I think I can. Let’s make two distinctions here. 

I think I can, because somewhere in here is that you basically stipulate that to the extent you are going to continue to use my service, you are agreeing to my terms. So they’ve got you there. 

What I don’t think it gets to do is essentially eviscerate any existing claim filed in court, of course. because that’s not, to your point, the action has already been filed and that sort of thing.

But I do think they can get you retroactively because the way they do that is they set it up as to the extent that you continue to use our service. You’re accepting our terms. 

I know you don’t like that, but… 

Now this is interesting: exceptions to arbitration. There are two. This is in 27.2… 1) if it’s a small claims court claim but you can assume in most cases that’s probably not going to exceed at most $5,000.

 There, they’re making the educated analysis that they don’t want to pay for private arbitration because I think, as we may have discussed before in the context of our credit union discussion, you have to pay for arbitration. It’s not like the courts where you just walk in. There my guess is they’re saying it’s not worth it given the amount someone wants to sue us for a couple of thousand bucks have at it in small claims court.

The other thing that was interesting though is part two, which is claims pertaining to intellectual property rights, including trademarks, trade, dress, domain names, trade secrets, copyrights and patents. I’m not sure why, institutionally Zoom is saying, intellectual property claims are not subject to arbitration, except this is the only thing I could come up with, that for purposes of establishing rules, and by rules precedence of law that they could then trot out in subsequent proceedings as it would go to, for example, matters of patent and validity and that sort of thing, which certainly would be very costly. I think what they’re saying is we want a public determination of these issues. So that if and when they arise and there are copycat litigations, we will be able to rely on what are ideally favorable decisions in disposing of these claims. 

Mark Miller: As you read it, I was thinking more along the lines of if we find something important enough to us, we don’t want to go to arbitration.

And so we’re saying, you must take us to court. That’s the way I was reading that. 

Joel MacMull: That’s interesting. I actually, I googled it but in my 20 years of practice, I had never seen some sort of constitutional bar to an IP claim. So I was wondering why is that a carve out? 

And then I thought it’s got to be because Zoom is taking the position as you just put it, that it’s far more advantageous for it to litigate these cases in court than it is to have binding private arbitration. 

Mark Miller: What it did is it also reminded me of section 16.1, If you give feedback to Zoom, Zoom says we own that feedback and ownership as you and I have discussed before, means I can no longer use it because I’ve given you the ownership of it. 

if I’m going to give you feedback, zoom owns it, and Zoom shall retain ownership of and all rights and titles to an interest in such feedback.

And so it reminded me of the section that you’re going through right now to say, is this something if somebody went out and created something based upon the feedback they gave Zoom. This is something Zoom would want to arbitrate or would want to protect in court. That’s what it reminded me of. 

Joel MacMull: it identifies copyrights so to the extent that there would be a copyright claim there, it seems to me It is something that they must assert in a court of law if for no other reason than to get an adjudication that I have ever reason to believe they would then hope that they could, roll over into the next one and get a similar favorable position.

Mark Miller: I kind of laughed because it’s basically saying, don’t give us feedback. I wouldn’t want to give them feedback. 

Joel MacMull: 27.3 it’s crafted interestingly. This is essentially a mandatory mediation provision. What this says is, is before we actually arbitrate, we’re going to agree to try and resolve the dispute amicably. And then they have some mechanisms there by which you have to put their people on notice or they can put you on notice. Keeping in mind too, that the way that’s drafted strikes me as the only beneficiary, not surprisingly to that, would in fact be Zoom.

Then 27.4 talks about the arbitration provisions. It talks about the Federal Arbitration Act applying. And most sophisticated commercial agreements will do that because the FAA provides a whole, a host of other sort of what I’ll call gap fillers, where maybe the arbitration agreement doesn’t speak to the specifics.

Not surprisingly, it’s a US based, California based company, and they’ve identified two forums here in which any user of Zoom may arbitrate. 

One is in California, the ADR Services Inc. But NAM, which is the National Arbitration and Mediation Center is actually based in New York and in fact, I’ve arbitrated matters before NAM. which is interesting because what happens, going back to the example of Australia. I’m an Australian, business. I think I’ve got a good claim against Zoom, and yet now I’m forced to arbitrate in a foreign far flung region.

 The good news is that they provide that unless you and Zoom agree otherwise, the arbitral proceedings will be oddly enough via zoom, as opposed to being in person. But nevertheless, that still probably is enforceable. It’s a little burdensome for, I can imagine people that are not based in the United States, but I also don’t profess to know what Zoom’s market share is outside of the United States, but I trust it’s pretty significant.

The only other thing I want to say about 27.4 is that the issue of arbitrability, in other words, if in fact something is arbitral if it’s not specified in the contract, that issue typically goes to court. Not surprisingly, zoom has said, no, no, no. The issue of Arbitrability shall in the first instance be decided by an arbitrator. 

Mark Miller: What do think 27.5, the jury trial waiver? 

Joel MacMull: Okay. 27.5. Look, in 2023, these kind of jury waivers have been held to be constitutional.

not withstanding the fact that, the seventh Amendment is a right to jury trial. In certain cases it’s, like everything else, it can be waived by contract. And that’s what’s happening here. 

The interesting thing is on the bottom of 27.5. and they, of course, they don’t mean it tongue in cheek, but I read it as tongue in cheek, is they say Discovery may be limited in arbitration, and procedures are more streamlined than in court. Discovery, of course, is that process by which each side gets to gather evidence to make their case.

Discovery may be limited in arbitration Having done, at least a dozen arbitrations in my career, I promise you they will be more streamlined than in court. And that can really be a problem because if you’re forced to be in arbitration and you don’t necessarily know all the answers and have all of the data at your fingertips, you may very well be limited in terms of what you can discover and therefore being able to prove your case 

 This concept of bellweather arbitrations 27.7. ,I found this really interesting and I must tell you I’ve never seen this before, but, there’s also, there’s actually two things I want to talk about. 

Number one is bellwether arbitrations are really interesting. And again, this, you have to appreciate this because at this point, this is drafted by Zoom for the benefit of Zoom. What this provision provides for just very quickly is we get to take to an arbitrator all of those matters if there’s 50 or more of them that relate to the same issue and serve up to the arbitrator a sample set. And if the arbitrator decides that these are indeed like cases and that the provision goes on to talk about what substantially similar means, then the arbitrator reserves the right to essentially make his determination. And therefore in the process of making that determination, we get to then nullify effectively all of the other individual claims that would flow from that similar claim after the fact. 

 What they can’t do, of course, is limit the liability, but what they’re saying is we don’t have to go through the pains of a judicial finding if your case later in time is going to mirror the one that was brought previously. 

. I’ve never seen this before, but again, I can only imagine that those individuals or lawyers that practice in the area of mass torts and class actions, I suspect that this is very common. I think that quite frankly has some real constitutional issues because you are effectively forget the forum for a second, whether it’s a quarter in arbitration, you are effectively depriving an individual of litigating an issue. And that I think could be tested. 

Mark Miller: That’s the first time you’ve said that in one of our recordings.

I think that could be tested. That’s good. 

Joel MacMull: I think that could be tested. Yeah. because I think it, it really has some constitutional. ramifications as far as I’m concerned. 

Mark Miller: 

I want to remind people that you’re a lawyer, but you are not their lawyer. 

Joel MacMull: 

…at least not yet.

Mark Miller:

Thanks for joining us for this week’s “You’re kidding me… that’s in my EULA??” We’d appreciate your comments on today’s show page, located at WhatsInMyEULA.com. You’ll also find information on how to get in touch with Joel. While you’re on the page, tell us what other EULAs we should investigate. If we use your suggestion, we’ll give you a shoutout in that episode.

“That’s in my EULA??” is published weekly. Special thanks today to Katy, that’s with a ‘T”, Kadi, that’s with a “D”, Edwin, and Tracy for the awesome voiceover work at the beginning of the show. Music today is provided by Hash Out from Blue Dot Sessions. 

We’ll see you next week.

This was a Sourced Network Production.

If you’re interested in talking with Joel about some of the issues in this episode, shoot him an email.

Joel G. MacMull | Partner
Chair, Intellectual Property, Brand Management and Internet Law Practice
(973) 295-3652 | JMacmull@mblawfirm.com