Information Technology Reference
In-Depth Information
To purchase the software, Step-Saver called TSL and placed an order, then followed
up with a purchase order. According to Step-Saver, the TSL phone sales representatives
said that Multilink was compatible with most DOS applications. The box containing the
Multilink software included a licensing agreement in which TSL disclaimed all express
and implied warranties.
Step-Saver's time-sharing systems did not work properly, and the combined efforts
of Step-Saver, Wyse, and TSL could not fix the problems. Step-Saver was sued by twelve
of its customers. In turn, Step-Saver sued Wyse Technology and TSL.
The Third Circuit of the US Court of Appeals ruled in favor of Step-Saver [58]. It
based its argument on Article 2 of the UCC. The court held that the original contract
between Step-Saver and TSL consisted of the purchase order, the invoice, and the oral
statements made by TSL representatives on the telephone. The license agreement had
additional terms that would have materially altered the contract. However, Step-Saver
never agreed to these terms.
The court wrote, “In the absence of a party's express assent to the additional or
different terms of the writing, section 2-207 [of the UCC] provides a default rule that
the parties intended, as the terms of their agreement, those terms to which both parties
have agreed along with any terms implied by the provision of the UCC.” The court noted
that the president of Step-Saver had objected to the terms of the licensing agreement.
He had refused to sign a document formalizing the licensing agreement. Even after this,
TSL had continued to sell to Step-Saver, implying that TSL wanted the business even if
the contract did not include the language in the licensing agreement. That is why the
court ruled that the purchase order, the invoice, and the oral statements constituted the
contract, not the license agreement.
PROCD INC. v. ZEIDENBERG
ProCD invested more than $10 million to construct a computer database containing
information from more than 3,000 telephone directories. ProCD also developed a pro-
prietary technology to compress and encrypt the data. It created an application program
enabling users to search the database for records matching criteria they specified. ProCD
targeted its product, called SelectPhone, to two different markets: companies interested
in generating mailing lists and individuals interested in finding the phone numbers or
addresses of particular people they wanted to call or write. Consumers who wanted Se-
lectPhone for personal use could purchase it for $150; companies paid much more for
the right to put the package to commercial use. ProCD included in the consumer version
of SelectPhone a license prohibiting the commercial use of the database and program.
In addition, the license terms were displayed on the user's computer monitor every time
the program was executed.
Matthew Zeidenberg purchased the consumer version of SelectPhone in 1994. He
formed a company called Silken Mountain Web Services Inc., which resold the infor-
mation in the SelectPhone database. The price it charged was substantially less than the
commercial price of SelectPhone. ProCD sued Matthew Zeidenberg for violating the li-
censing agreement.
