Ticketmaster vs. Tickets: Preserving Minimum

Ticketmaster vs. Tickets: Preserving Minimum Requirements of Contract on the Internet

The internet and the emergence of the World Wide Web both as a source of information and as a source of commerce has changed not only the way we live, but the implication of our laws and legal systems.

Freedom of speech, for one, has been impacted by the ease of accessing pornographic or violent materials on the Web. Another area of law that is directly impacted is contracts law. What happens to offer, acceptance and consideration - the three requirements of a contract - in cyberspace?

That is the subject of this University of California at Berkeley Boalt Law School journal article. Ticketmaster Corp. is the largest nationwide vendor and clearinghouse of tickets to events. Its competitor is Tickets.com, which has a very similar - albeit smaller - business model, with a few specific and relevant differences.

Ticketmaster ha the clout to advertise only those events for which it sells ticket on its Web page. Tickets.com not only advertises the events for which it sells tickets, but also other events for which it does not. Its business model is to simply show that the tickets are available and even where and how to get them, to drive back repeat business in the future.

Tickets.com used "spiders" to draw information from Ticketmaster's Web site on upcoming events. Spiders are computer programs that go into another Web site and take all and only the information needed. For instance, Tickets.com spidered all the Ticketmaster info regarding event name, details, location and price, while leaving out Ticketmaster's logo. The resulting information was linked to Tickets.com's Web site.

Ticketmaster sued Tickets.com under several theories of law. First, there was trespass to chattels. However, the federal district court ruled quickly that trespass to chattels requires actual damage to property, and the spider did not create any physical damage to Ticketmaster's computers.

Second, Ticketmaster sued under copyright, but again lost: The court determined that summary judgment for Tickets.com was appropriate since URLs are not copyrightable since they are functional facts.

Finally, Ticketmaster hit upon the only question the survived summary judgment: Contract theory.

Specifically, TM claimed that TX breached a contract - reachable by a hyperlink on the TM home page - which imposed use restrictions on all users of its webpages. The license stated that anyone visiting pages beyond the home page agreed not to deep link interior webpages, use automated programs like spiders on the site, or use information obtained from the site for commercial purposes. TX had seen this license several times on the website and had communicated about it with TM representatives. The court concluded: 'There is sufficient evidence to defeat summary judgment on the contract theory if knowledge of the asserted conditions of use was had by TX, who nevertheless continued to send its spider into the TM interior web pages, and if it is legally concluded that doing so can lead to a binding contract.'" (19 Berkeley Tech. L.J. 495).

The note agrees with the court and concludes that the type of contract that Ticketmaster sought to enforce (a browsewrap license) is a typical example of a mass market form of Internet contract that simply strays too far from the legal definition and requirements of contract to be enforceable.

It neither provides a legitimate offer, nor does it require clear acceptance. Ticketmaster's argument was simply that by logging onto its site, or spidering it, Tickets.com had entered a contract. The court disagreed, and the note blames Ticketmaster's loss on faulty Web contracts such as browsewrap licensing.

The note concludes, "In determining the validity of an online contract, courts should distinguish between commercial, publicly available websites and those that have restricted access. Courts should only allow website providers to form contracts with their web users when they restrict access to their sites. Only when information providers and users engage in a meaningful exchange by rendering a clear offer and acceptance, should it warrant contract formation."

INTEL CORPORATION, Plaintiff and Respondent, v. KOUROSH KENNETH HAMIDI, Defendant and Appellant.

30 Cal. 4th 1342

SUPREME COURT of CALIFORNIA

Issue: Is there trespass to chattels by using an e-mail system at a company?

Rule: The company did not provide sufficient proof of injury to merit the necessary personal injury to justify trespass to chattels.

Analysis: Trepsass to chattels requires some sort of physical invasion, yes, but it also requires that the property be damaged. Simple invasion does not suffice, and most of the cyberlaw cases regarding trespass to chattels will fall in this category.