End of Season One

Mark Miller: 

This is the final episode of our 10 part series on End User License Agreements or EULAs for short. I’m Mark Miller, Executive Producer and host of “That’s in My EULA??” When Joel MacMull and I thought about this series, our assumption was that we’d reach a point where the agreements we were analyzing would start to look alike, and that’s pretty much what’s happened.

What we’re going to do in this episode is to do a quick review and go over the highlights of the series, the highs and lows, to give you some quick insights into what we’ve discovered. 

At the end of the episode, I’ll go over what we’re planning for Season Two and how you can become involved. Stay with us.

We are 10 episodes in on this little journey here, and what we’re going to do today is just go trip down memory lane to see what’s consistent in these things, what should people be aware of in general? And then see if we can find anything that was just so outrageous that it needs to be called out. 

I want to start first though, with Canva because you and I read through Canva and said, this is really nicely put together. 

Joel MacMull: 

We did. To the drafter credit, I think we both looked at it and said, here’s something that at once indicates what it needs to indicate in terms of protecting the company, but is also written in a manner that the man on the street can understand. 

Mark Miller: 

Yeah, that was nice because that’s the way the company is perceived too, when the people that are using the product. The other one that stood out on the other end of the spectrum was the convoluted obfuscation of the Amazon agreement. 

Joel MacMull: 

That document was, I think even under the most generous of interpretations, a mess. This was also a document that was essentially interwoven with several other documents. That’s right. And so it serves as this kind of never ending loop for the reader to figure out where they need to go from one place to another.

 I’ve long said this, and I’ll say it again; I would hope that in time, although certainly the internet and e-commerce is by no means new, but I think in time there needs to be some legislation really at the federal level, that controls how these things are written.

 I think that’s important. Right now it’s a matter of state law. Just today actually I was researching it in connection with another matter and these things always typically becomes a matter of state law and state contract law specifically. There’s a space to federally regulate this. I don’t know what that looks like. I can imagine some regulations being in place that at least provides guidance to these large e-commerce sites so that people really understand what they’re getting into.

And then conversely makes ’em enforceable at the end of the day. I think that’s helpful to everybody. 

Mark Miller: 

You have mentioned, and not just in passing several times, that you would consider leading the charge on that type of legislation. 

Joel MacMull: 

I have. I hope you’re not going to hold me to it. But yes, I have said it, that’s true. It is something that if I ever catch my breath, I would certainly be willing to write my representative, and inform them of what I think is a real issue, particularly as prompted by this little adventure we’re having.

Mark Miller: 

We’re at episode 11 is what we’re working on now, so we’ve got 10 in the bag. I’d have to say that my favorite one, and I’m a little prejudiced here, but last week that conversation between you and Shannon Lietz talking about Stephen Schwartz and the ChatGPT in court, that was fascinating to me. 

Joel MacMull: 

It’s really interesting. It’s an evolving issue. And as we mentioned last week, the legal pundits that were observing this, many of whom I can imagine were in person, really think that this is a seminal event. That no doubt is why I think Judge Castel is doing the things that he’s doing by having the hearing, by gathering the evidence and taking the time to issue an opinion, because he knows all too well that he really is among the vanguard in laying down what for us as professionals, as licensed professionals, lawyers, not only his expectations, more importantly, what I think the rules all as already exist call for. 

 I’m speaking specifically here to those that practice in federal court of course, federal Rule 11, which is essentially as I described last week, a rule that requires every lawyer who signs a pleading that files it in court has made a good faith effort to independently determine that the facts or the laws set forth in that particular submission has been vetted.

And whatever else you want to say about Mr. Schwartz’s naivete or his lack of due diligence, I suspect he’s going to have a very difficult time getting around that requirement. That requirement is not one that I’m reading into the rule. And while I don’t have the rule in front of me, I know it rather well, and of course it’s baked right into the rule. as are the ramifications for failing that. , 

Do I think it’s a little unfortunate that Mr. Schwartz is essentially the focus of all of this? I am sympathetic to him, but I just think the egregiousness of the conduct here and given the proliferation of ChatGPT necessarily requires that the court take a stern look at this, particularly in admonishing him and his partner. 

Mark Miller: 

As you’re looking at the episodes that we’ve done here, what are you seeing from a legal perspective that has been consistent across all of these?

Joel MacMull: 

Common themes among all of these agreements are certainly the arbitration provisions to be distinguished from public court filings. The reason for that certainly is intentional. Not withstanding the market dominance of someone like Amazon, there necessarily is from a PR perspective, a desire to keep those individuals, whether they be consumers or in other cases, entities, to keep them quiet, if for no other reason than to not to tarnish the brand.

And private arbitration. Certainly the older I get, the more jaded I become. But private arbitration lends itself to that model by essentially suppressing the claims and more importantly the discovery, that some of these big players may be bad actors. 

That’s certainly one of the common themes. And then within that, of course, is, what I would consider to be institutional restraints that are by design. For example, you can’t have class action arbitrations. If you remember, a lot of these agreements speak specifically to the fact that they want individuals to only bring claims in their individual capacity, not to essentially collectivize the actions. And that’s for damages purposes. Which is, it’s going to be far cheaper for an entity to settle or resolve an issue with one person than it is a class of individuals. 

Mark Miller: 

The one that stood out from all the other ones is when we did Charles Schwab, because of the financial restrictions and everything that’s built into that industry.

Their’s was an interesting one outside the norm. One of the things that you and I discussed was this idea that you can use all of their research and all their data and all their analytics, but you cannot contact the people that created those. And it took you to explain it to me why. 

Joel MacMull: 

To the extent that I’m remembering it correctly, I think there was a provision that had rather draconian language. Under no circumstances shall you contact the analyst in connection with any of their analyses or reports. Words to that effect is my recollection. That’s right. 

That was very clear to me that was intended to be essentially an effort to control their damages. Which is that they don’t want these analysts, for reasons of self-promotion or otherwise, in a position where they are effectively giving financial advice, because should they be doing that, and should they be doing that under the auspices of their employer, Charles Schwab, now all of a sudden you’re essentially making them a financial advisor, which if I recall in that same agreement, there was specific language disclaiming that they were financial advisors at all, but rather, at least in what we looked at, they were merely providing a platform for you as an investor to engage in self-directed investment. 

 As I think I mentioned then, you can be rest assured that whether it’s in the form of a handbook or training or otherwise, those same young, and they’re typically young, they’re usually junior people, at the analyst level before they go elsewhere. I’m sure they’re encouraging these same analysts, in the event that they’re contacted by a consumer or investor, to not only ignore the request, but to immediately report it. All for the purposes of ensuring that they’re not exposed to any liability, 

Mark Miller: 

One of the things that was exciting about last week’s episode, going back to the one on the ChatGPT in court. It was out of our usual circle that we talk, meaning we’re talking about pulling end user license agreements apart.

But that case was so interesting, the ChatGPT case, that we dedicated an episode to it with you and Shannon. I wouldn’t hesitate to go in that direction more if we could find public cases that were worth exploring and talking about. Whether it’s because of privacy, whether it’s because of breaches, whether it’s because of your perception as a lawyer, that there’s something that needs to be investigated here.

Joel MacMull: 

I certainly think there’s something there. Obviously at the risk of stating the obvious, not all cases that we look at are going to be as sexy as that case. I think you know that. There are certainly cases that involve technologies. There are I could imagine, for example, even within my sort of trademark intellectual property space, there are a number of cases now that implicate NFTs. NFTs as essentially non-fungible tokens and trademark use in connection with those, what does the law have to say. 

 The interesting thing about the law is, at least in my experience, is that not withstanding the development of new technologies, what you often see is the application of old law. And I’ll give you an example. 

20 years ago, I guess more than 20 years ago, it was the early two thousands. I was just graduating law school and a big issue that was emerging was what were we going to do with trademarks on the internet? How are we going to deal with, quote unquote internet infringements? And how is that going to be distinguished from, let’s say, the brick and mortar infringement that had been essentially the fodder for case law for decades. And I’m talking about someone opens up a service center in town and somebody across town rips off the name and they end up having the similar name and they’re within 25 miles of each other.

The answer not withstanding a lot of people that said, we’re in a new era. What are we going to do? The internet is basically unraveling traditional trademark law. 

The answer was exactly the same, for the most part. You’ve got essentially the application of old principles to new factual developments. Just because you had someone on the internet using a mark and you may even have someone in another country that registered the domain. What you saw develop, and I’m specifically talking about the UDRP (Uniform Domain-Name Dispute-Resolution) here, for example, was a body of law that was designed to address these using classic principles. If you could demonstrate you were a trademark owner and you could, typically this was done with a registration, you didn’t have to necessarily be a registered mark holder, but it arguably was the best evidence that you were the rightful owner, you would basically submit that and you would say, I’ve been wrongfully squatted. Somebody in Russia has squatted on, let’s say McDonald’s with two S’s. and you’d, invariably you’d get that domain name back. 

I raise the point only to say that while technologies often add wrinkles, they don’t eviscerate those longstanding bodies of law.

That’s both good and bad because, It’s great to have that consistency. It’s also bad because those old principles sometimes are not designed to account for new formulations. 

Mark Miller: 

That’s a wrap for Season One of “That’s in my EULA??” When we come back in Season Two, Joel and I will be looking at legal cases currently being considered or actually in session in the court system. From what we’re seeing, AI and GPT are going to get some major exposure in the coming months, and we’ll be on top of that.

We’ll also be looking for ideas from you. You can leave us a note and suggestions on our LinkedIn page at Sourced Network Productions. Thanks for staying with us through the first season. We’ll see you in Season Two.

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