C535A104d01 - Page 1 1 of 1 DOCUMENT PROCD, INCORPORATED,

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1 of 1 DOCUMENT PROCD, INCORPORATED, Plaintiff-Appellant, v. MATTHEW ZEIDENBERG and SILKEN MOUNTAIN WEB SERVICES, INC., Defendants-Appellees. No. 96-1139 UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT 86 F.3d 1447 ; 1996 U.S. App. LEXIS 14951; 39 U.S.P.Q.2D (BNA) 1161; Copy. L. Rep. (CCH) P27,529; 29 U.C.C. Rep. Serv. 2d (Callaghan) 1109 May 23, 1996, Argued June 20, 1996, Decided PRIOR HISTORY: [**1] Appeal from the United States District Court for the Western District of Wisconsin. No. 95-C-0671-C. Barbara B. Crabb, Judge. DISPOSITION: REVERSED AND REMANDED CASE SUMMARY: PROCEDURAL POSTURE: Appellant sought review of the order of the United States District Court for the Western District of Wisconsin, which declined to issue appellant an injunction on the basis that its license was ineffectual since it was contained within packaged software. OVERVIEW: Appellant included a shrink-wrap license in its packaged software. Appellant also chose to discriminate in its pricing of the software between commercial and non-commercial users. Appellee purchased a consumer package of the software, but chose to ignore the license restricting its use to non-commercial purposes. Seeking to enforce the license, appellant filed for an injunction. The trial court denied the injunction, holding that the license was ineffectual because the terms did not appear on the outside of the package. On appeal, the court held that the license was to be treated as an ordinary contract accompanying the sale of products. While the terms of the license were included within the package, its terms afforded the purchaser an opportunity to review the product and its terms before being bound. Since the license agreement was a two-party contract, it was not equivalent to the rights of copyright. OUTCOME: The court reversed the denial of the injunction since under ordinary contract principles, appellant's license was binding because appellee had the opportunity to review its terms before being bound. CORE TERMS: license, software, consumer, database, buyer, package's, customer, user's, shrinkwrap, box, ticket, trademark, warranty, vendor, seller's, trade secrets, exclusive rights, copyrighted, directory, federal law, general scope, subject matter, intellectual property, telephone, printed, listings, carrier, preempt, inside, retail LexisNexis(R) Headnotes Contracts Law > Defenses > Unconscionability > General Overview Copyright Law > Conveyances > Licenses > Shrinkwrap Page 1
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[HN1] License agreements that are included in shrink-wrapped software packages are enforceable unless their terms are objectionable on grounds applicable to contracts in general, that is, if they violate a rule of positive law, or if they are unconscionable. Contracts Law > Formation > Acceptance > General Overview
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This note was uploaded on 04/29/2010 for the course ENTR Buisness l taught by Professor Sandhous during the Spring '10 term at Johns Hopkins.

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C535A104d01 - Page 1 1 of 1 DOCUMENT PROCD, INCORPORATED,

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