By Robert Milligan and Joshua Salinas

The best things in life are free, except for screensavers, games, and other software provided on-line that spy on your computer activity and gather your personal information, at least according to the consumer Plaintiffs in the recent data collection/privacy suit filed in Illinois federal court captioned Harris v. comScore, Inc., No. 11 C 5807, 2011 WL 4738357 (N.D. Ill. Oct. 7, 2011). The Plaintiffs in the case won’t be forced to litigate the action in Virginia after a federal court recently denied comScore’s attempt to enforce the forum selection provision contained in its licensing agreement.

The District Court for the Northern District of Illinois, Honorable Chief Judge James Holderman presiding, recently denied defendant comScore’s motions to dismiss and transfer venue because he found that comScore’s forum-selection clause was not reasonably communicated to the plaintiff consumers. In doing so, the court found that the terms and conditions of license agreements for free software downloads require a higher standard of notice to consumers.

According to Plaintiffs’ complaint, Defendant comScore is an internet research company that allegedly monitors the computer and online activity of consumers that download its software. ComScore allegedly bundles its surveillance software with free programs, such as screensavers and games, to encourage consumers to download and install the software. Once installed, comScore’s surveillance software allegedly collects the computer user’s information and activity, which comScore then allegedly sells to its clients for marketing research.

Plaintiffs Mike Harris and Jeff Dunstan allegedly downloaded and installed comScore’s screensavers and games. Harris and Dunstan allegedly soon realized that comScore’s software continually and surreptitiously monitored their computer activity. Additionally, the software allegedly collected usernames, passwords, and credit card information. They brought a class action against comScore in Illinois federal court, and asserted claims, inter alia, under the Computer Fraud and Abuse Act, Electronic Communications Privacy Act, Stored Communications Act, and Illinois Consumer Fraud and Deceptive Practices Act.

ComScore moved to dismiss the case for improper venue or in the alternative, to transfer venue from Illinois to Virginia. ComScore argued that the terms and conditions in its User License Agreement contained a forum-selection clause that limited all litigation to courts in the State of Virginia. ComScore claimed that before anyone can install its software, the individual must first click a box acknowledging that he or she has read and agreed to the terms and conditions of the license agreement. Thus, comScore alleged that Harris and Dunstan agreed to the license agreement, and more importantly, the forum-selection clause that prohibited their lawsuit in Illinois.

Harris and Dunstan argued that comScore’s forum-selection clause was not enforceable because it was not reasonably communicated to them when they downloaded the software. They alleged that the comScore software’s installation process obscured the hyperlink to the license agreement, and thus the terms and conditions were not readily available.

Chief Judge Holderman cited several cases that enforced “click through” agreements, including some with forum-selection clauses. He noted that the key difference in this case was Harris and Dunstan’s allegation that the hyperlink to the User License Agreement was obscured.   Normally, click through agreements place consumers on at least inquiry or constructive notice. Consequently, in this case Harris and Dunstan should have known about the agreement because they were required to acknowledge their acceptance of the agreement before downloading comScore’s games and screensavers. In fact, Harris and Dunstan each clicked a box acknowledging that they read the terms and conditions of the agreement. Chief Judge Holderman held, however, that while there is a lower expectation of notice for free software: “Nonetheless, it is not reasonable to expect a user casually downloading free software to search for such an agreement if it is not immediately available and obvious where to obtain it.” Harris, 2011 WL 4738357, at *2.  Thus, comScore could not hold Harris and Dunstan to its license agreement, and the included forum-selection clause, because it never provided them reasonable access to the terms and conditions.

The court concluded that the forum-selection clause was not reasonably communicated to the plaintiffs, and thus their action could proceed in Illinois.

Additionally, the court declined to transfer the case because at least one of the plaintiffs resided in Illinois, and also he downloaded and installed the software there.

This case is important because of its impact on requirement of notice for online license agreements. Online license agreements are now ubiquitous and users cannot avoid their obligations merely because they clicked “agree” without reading the terms of the agreement. Courts will generally enforce agreements where consumers are required to click the box and acknowledge that they read the agreement’s terms and conditions. This case is interesting because the court refused to find that the plaintiffs read the agreement even though they clicked a box confirming that they read the agreement. This case requires software and service providers to ensure that agreement terms and conditions are readily available; providers cannot merely rely on evidence that the consumer clicked a box.  For free software downloads, Harris concludes that consumers have less of a burden to look for any potential license agreements. Indeed, this case is favorable to consumers seeking to invalidate provisions in licensing agreements, but also reminds us that free rarely means free.