Why are click-through agreements important?

Why are click-through agreements important?

It is an almost daily occurrence in modern life. You sign up to a web service and get confronted with a tick box asking you to agree to terms and conditions. When people do this, though, they often believe that well-known and trusted corporates have reasonable terms and conditions. Unfortunately, well-known large corporates that people interact with every day can have some very draconian terms in their click-through agreements.

Apistry Inc. found this out to their cost. What appears below is what I have been able to distill from the court case involving Amazon and Apistry in the USA. Some of the facts that I set out below are contentious as each side denied what the other side was saying.

Around 2011 an employee at Apistry Inc. registered to use Amazon Web Services (AWS). As part of that process, the employee clicked to agree to the standard AWS customer agreement.

Section 8.5 of that large (6k words) agreement included:

“During and after the Term, you will not assert, nor will you authorize, assist, or encourage any third party to assert, against us or any of our affiliates, customers, vendors, business partners, or licensors, any patent infringement or other intellectual property infringement claim regarding any Service Offerings you have used.”

Apistry approached Amazon and offered their technology in a licensing arrangement as an inclusion into Amazon’s EC2 product. Amazon refused. Amazon proceeded to install the technology patented by Apistry into the Amazon EC2 product.

When Apistry sued Amazon for infringing its patents in their EC2 web services engine, Amazon raised the AWS clause as a reason why Apistry could not succeed in a suit against them. The court case was decided on other grounds, but it does go to show that Amazon clearly sees its customer’s IP as its own to take if it wants and charge their clients for the privilege.

The agreement is particularly draconian because the clause applies not just to when a client is a customer of Amazon, but lives on forever, even when the customer becomes an ex-customer. It also appears to apply to employees who have been in other roles in the past not assisting with any litigation against Amazon if they clicked the AWS agreement.

Be careful what you agree to when clicking those click-through agreements!

Mark Warburton About the author

The Intellectual Property Guru. His determination to protect innovation stems from a family legacy in which his grandfather, a genius inventor, had his innovations stolen and patented by someone he trusted, which led to his grandfather dying a pauper on a park bench. Mark is an international award winning lawyer and patent attorney and 3-time published author. His prowess in the court room sees him winning cases that others thought were unwinnable. Mark’s passion for protecting intellectual property shines through in his pro-bono legal mentoring, proactive legal workshops and 1-2-1 work with clients.