Linking to Other Websites - the Ticketmaster Case

Where there's money, disputes arise and litigation follows. It's the American way. E-commerce is no different. A March 27, 2000 decision in the case of Ticketmaster v. Tickets.com provides an excellent example of how real courts handle real cases involving the new and often esoteric issues that arise from e-commerce. I'm going to focus on online contracting and what's called deep linking.

Here are the high level facts of the case in a nutshell. Ticketmaster.com and Tickets.com are competitors in selling tickets online for things like sporting events and concerts. Ticketmaster.com often has exclusive arrangements with events it carries on its website so that tickets aren't generally available to those events except through Ticketmaster, the event organizers directly, and premium priced ticket brokers.

Tickets.com also has an online ticketing service, but it operates a bit differently. While in some cases it may have the ability to sell tickets directly, when it can't, it tells you where and how to buy those tickets. It even gives you a short factual description including the time, date, place and price for the upcoming event.

Where Tickets.com doesn't itself sell the tickets, you can click for a referral to another ticket broker, or to another online ticket seller. Here's where the unique feature of this case-hyperlinks or deep linking-comes in.

According to the Court, when the exclusive ticket broker was Ticketmaster, and you clicked on "Buy this ticket from another online ticketing company" (on Tickets.com's site) you were deep linked to an interior web page of Ticketmaster (bypassing Ticketmaster's home page) for the particular event in question.

A "deep link" is a link to a page on a website other than its home page. The "deep" refers to the depth of the page in a website's structure. "Deep" is any page below the top page in a website's hierarchy (the home page).

Many websites don't want to be deep linked because all of their ads and promotions are on their home page. Many find linking to a home page less offensive than deep linking.

Once you were at the deep link in Ticketmaster's website, you could buy the tickets from Ticketmaster (without seeing their ads or promotions), not Tickets.com. Tickets.com gave an explanation, which read as follows: "These tickets are sold by another ticketing company. Although we can't sell them to you, the link above will take you directly to the other company's website where you can purchase them."

Court Procedure

To understand the significance to be placed on this ruling, you must understand that the March decision was procedurally early in the life of this case. It still has miles to go before it's over. Unless it settles, it will probably end up in an appellate court.

Further, the court decision was a pronouncement of a single United States Federal District Court Judge in California. The ruling arose from Motions to Dismiss. This stage of a case is early and things could change dramatically before the case is over.

Having said that, what's interesting is the judge's discussion and analysis. As an e-commerce lawyer, I often work in a legal environment where I frequently say things like "maybe" and "nobody really knows the answer yet."

The simple fact is that there are many more open legal questions in e-commerce law than resolved ones. Even some of the most basic questions are open to intense debate among lawyers. There are just too few court decisions and statutes to create a comprehensive body of e-commerce law.

In this much publicized case, we get to go beyond academic discussion and have a real judge making real rulings. It's fascinating to see how the court views much debated points of law.

Clickwrap

One of Ticketmaster's arguments was that it had a link at the bottom of its web pages to "Terms and Conditions of Website Use." As is typical with this type of agreement, it apparently stated that by using the website, you were agreeing to the terms of the agreement.

You're probably familiar with these types of agreements. I am because I write them. It's common to see a link to an agreement at the bottom of a web page. Most people don't bother to read them.

Since I know that, when I write them for my clients, I usually like to include "innocuous" clauses like, "No matter what we do to you and no matter how bad it is, we owe you nothing." "We hereby take ownership rights in your first born." My favorite is, "If you sue us, you agree to sue us in the American court geographically farthest from your home." (I hope that I've made you wonder about all those times you clicked "I Accept" without reading what you've accepted.)

Ticketmaster argued that this agreement prohibited deep linking and using the site for commercial purposes. According to the Court, it also argued that the agreement was valid because it was like the "shrink-wrap license" cases, where the packaging on the outside of the CD stated that opening the package constituted adherence to the license agreement (restricting republication) contained inside. This has been held to be enforceable.

The court did not buy into that argument. It felt that this wasn't the same because the shrink-wrap license agreement is open and obvious. (I wonder if the judge ever noticed that when you're installing software on your PC that when the license pops up and you're asked to click "I Accept" that there's no obvious way to print the license. It makes you wonder if anybody really wants you to read that either.)

Clearly, the court liked the procedure that requires a clicked "I Accept" better than just a link at the bottom of a web page to Terms and Conditions.

My prediction here is that Ticketmaster will ultimately prevail in enforcing its Terms and Conditions because the court invited Ticketmaster to amend its pleadings to show that Tickets.com knew of the Terms and Conditions plus facts showing implied agreement. I think that with the invitation the court is tipping its hand. It will ultimately uphold this agreement.

Arguably, the average web surfer might be able to argue that he was never aware of or read the Terms and Conditions. The President of Tickets.com is going to have a tough time saying that with a straight face

Deep Linking

Now that I've predicted that Ticketmaster will ultimately prevail on its contract claim, the fact is that the press never mentions the contract claim. The headlines say things like, "Hyperlink to Web Site Not Copyright Infringement."

While the court did say that, I don't think it will be the dispositive in this case. The "Terms and Conditions" will decide it and it will be in Ticketmaster's favor.

What's interesting is that the case is seen as a leading case on deep linking, but the court truly had little to say about deep linking. What it said is that, "[H]yperlinking does not itself involve a violation of the Copyright Act . . . since no copying is involved, the customer is automatically transferred to the particular genuine web page of the original author.

"Hyperlinking" or mere "linking" could mean a link to anywhere including the home page. While the court may be blessing that under copyright law, the court's language doesn't help Tickets.com with deep linking and really doesn't solve its problem with the Terms and Conditions of Website Use.

Somehow, the perception is that Tickets.com is winning this case. I'll put my two dollars on Ticketmaster.

Self Help

If you want to limit deep linking to your site, the most important thing that you can do is have solid Terms and Conditions of Website Use on your site. Your Terms must prohibit then prohibit deep linking and any other use of your website that you want to prohibit.

Clearly, you'll have a stronger case for a valid agreement if you require web surfers to click "I accept" to an agreement before they can use your site. Still, if this is not customer friendly enough for you, I don't think that this court's ruling should be used as a basis for saying that a link at the bottom of your home page to an agreement is an impermissible procedure. The law is still unclear on this.

Depending on your business, it may make sense to err on the side of customer friendly rather than legally conservative. You should make that choice after consulting with your e-commerce lawyer.