From Click-wrap to Cost-shifting:Contracting in the Digital World

Ann G. FortSutherland Asbill & Brennan LLP

ICLE GeorgiaAugust 24, 2012

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BIG DATA in the USA1983: 2 million

2007: 200 million

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2007: All stored data 295 exabytes –

295 billion gigabytes

Created in 2011: 1.8 zettabytes –

1.8 trillion gigabytes

BIG DATA in the WORLD

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1.8 zettabytes :

200 billion HD movies

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Agenda

• The Non-Purchase Transaction: Leases & Licenses

• Electronic “Writings”• Internet Jurisdiction• E-discovery Cost-shifting• Evidentiary challenges for electronic

documents• Questions

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Agenda

• The Non-Purchase Transaction: Leases & Licenses

• Electronic Writings• Internet Jurisdiction• E-discovery Cost-shifting• Evidentiary challenges for electronic

documents• Questions

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The Rise of the Lease

• Very typical for businesses to lease their computer equipment– Tax, ease of financing, other business reasons– Easier to keep up with technology improvements

• GA adopted UCC Art. 2A • Implications?

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The Rise of the Lease

• Typical three-party transaction:• Supplier• Finance source• End user

• Situations where lease could matter:• Product defects• Indemnification for IP infringement• Executing on judgment

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Software Licenses

• Why doesn’t anyone sell software?– Copyright first sale doctrine– Trade secrets protection

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Software Licenses

How to establish assent to terms?• “shrink-wrap” license: By installing• “click-wrap” license: By clicking• “browse-wrap” license: By continuing

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Shrink-wrap/Click-wrap often enforceable

Key: Evidence of assent Specht v. Netscape Communications Corp., 306 F.3d 17

(2d Cir. 2002)

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Shrink-wrap/Click-wrap LicensesTracphone Wireless, Inc. v. Zip Wireless Prods.,

Inc., 716 F. Supp. 2d 1275 (N.D. Ga. 2010)

Imageline, Inc. v. Fotolia LLC, 663 F. Supp. 2d 1367 (N.D. Ga. 2009)

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Agenda

• The Non-Purchase Transaction: Leases & Licenses

• Electronic “Writings”• Internet Jurisdiction• E-discovery Cost-shifting• Evidentiary challenges for electronic

documents• Questions

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The Good Old Days . . .

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Electronic “Writings”

• In the 21st Century, most contracts are not even “signed” at all.

• Will electronic document (fax, email, pdf) satisfy definition of “writing” where the law requires one?

• “Beeps & chirps” case: Dept. of Trans. v. Norris, 474 S.E.2d 216

(Ga. App. 1996)

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Electronic “Writings”

• Statutory responses: Edocs anti-discrimination– Georgia• Electronic Records and Signatures Act (O.C.G.A. § 10-12-1

et. seq.) (1997)• Uniform Electronic Transactions Act (UETA), O.C.G.A. §

10-12-1 et. seq.

– FederalElectronic Signatures in Global and National Commerce Act ("ESIGN Act"; codified at 15 U.S.C. § 7001 et seq.)

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Electronic “Writings”

• Exceptions: wills, trusts, most of the UCC

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Electronic “Writings”

• ESIGN Act & UETA: electronic “signature”• No technology standard dictated• Additional support for the click-wrap

agreement

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Agenda

• The Non-Purchase Transaction: Leases & Licenses

• Electronic “Writings” • Internet Jurisdiction• E-discovery Cost-shifting• Evidentiary challenges for electronic

documents• Questions

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Internet Jurisdiction: Web Site

• Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997)

• Aero Toy Store v. Grieves, 279 Ga. App. 515 (2006)• Imageline, Inc. v. Fotolia LLC, 663 F. Supp. 2d 1367 (N.D. Ga. 2009)

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Internet Jurisdiction: Email

• Object Technologies v. Marlabs, Inc., 246 Ga. App. 202, 202-203 (2000)

• Crossing Park Props., LLC v. JDI Fort Lauderdale, LLC, Case No. A12A0201 (Ga. App. June 28, 2012)

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Agenda

• The Non-Purchase Transaction: Leases & Licenses

• Electronic “Writings” • Internet Jurisdiction• E-discovery Cost-shifting• Evidentiary challenges for electronic

documents• Questions

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Big Data + Litigation =

Big Money

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E-discovery Cost-shifting

• Major corporate litigation, 2009: $ 3 million average

• Preservation• Collection• Processing• Production

•Who Pays?

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E-discovery Cost-shifting

• During discovery, producing party pays• Exceptions– “Not reasonably accessible” data under federal

rules– Third party discovery

• Law evolving toward cost containment as judges see more cases

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E-discovery Cost-shifting

Post-judgment: treat like copying costsFed. R. Civ. Pro. 54(d)

In re Ricoh, 2011 U.S. App. LEXIS 23495 (Fed. Cir. 2011)Race Tires Am., Inc. v. Hoosier Racing Tire Corp., No. 11-2316, 2012 U.S. App. LEXIS 5511 (3d Cir. Mar. 16, 2012)

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E-discovery Cost-shifting

• Caution: Agreements to share, or for each party to pay its own e-discovery expenses, will control

• In federal court, consider reserving right in joint preliminary planning report

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Agenda

• The Non-Purchase Transaction: Leases & Licenses

• Electronic “Writings” • Internet Jurisdiction• E-discovery Cost-shifting• Evidentiary challenges for electronic

documents• Questions

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Evidence & E-Docs

• Thanks to Big Data, we rely on computer accuracy in daily life

• In the courtroom, that’s just not good enough• Checklist: Lorraine v. Markel American

Insurance Company, 241 F.R.D. 534 (D. Md. 2007)

• Highlights: authentication, hearsay, original writings

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Evidence & E-Docs

• Most common problem: business records• Capital City Devel., LLC v. Bank of N. Ga., Case

No. A12A0414 (Ga. App. July 5, 2012)• Standard Bldg. Co., Inc. v. Wallen Concept

Glazing, Inc., 298 Ga. App. 443 (2009) • Crawford v. Dammann, 277 Ga. App. 442 (2006)

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QUESTIONS?