Specht v. Netscape Communications Corp.

Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002), is a ruling at the United States Court of Appeals for the Second Circuit regarding the enforceability of clickwrap licenses under contract law. The court held that merely clicking on a download button does not show consent with license terms, if those terms were not conspicuous and if it was not explicit to the consumer that clicking meant agreeing to the license. Background Christopher Specht and several co-plaintiffs were users of the Netscape web browser and related software that they had downloaded from the Internet. The plaintiffs argued that they had not been given an opportunity to review and possibly refuse all the End User License Agreements (EULAs) that came with the software. Upon reviewing the agreements later, they found that they disagreed with a stipulation that any legal disputes must go to arbitration rather to court, and with various stipulations that allowed Netscape to track user activity in ways that allegedly invaded privacy. A software agreement to which a user assents by clicking a "yes" or "OK" button on the screen is known as a clickwrap license. Whether such a license was enforceable under contract law was unsettled at the time of this dispute. All the plaintiffs acknowledged that they clicked "yes" when prompted to agree to the EULAs while downloading the Netscape web browsers, but claimed that there was no such prompt for the associated SmartDownload plug-in that facilitated the process, and that a button to indicate assent to that license could only be found by scrolling beyond the "download" button. The SmartDownload license contained the provisions about arbitration and data tracking to which the plaintiffs objected.