• Abstract and Figures
• Public Full-text

UNCONSCIONABILITY 2.0 AND THE IP BOILERPLATE: A REVISED DOCTRINE OF UNCONSCIONABILITY FOR THE INFORMATION AGE Amit Elazari Bar On† ABSTRACT In the information age, where fewer goods and more innovations are produced, intellectual property law has become the most crucial governing system. Yet, rather than evolving to fit its purpose, it has seemingly devolved—standard form contracts, governing countless creations, have formed an alternative de facto intellectual property regime. The law governing the information society is often prescribed not by legislators or courts, but rather by private entities, using technology and contracts to regulate much of the creative discourse. The same phenomena persist in other emerging areas of information law, such as data protection and cybersecurity laws. This Article offers a new analytical perspective on private ordering in intellectual property (IP) focusing on the rise of IP boilerplate, the standard form contracts that regulate innovations and creations. It distinguishes between contracts drafted by the initial owners of the IP (such as End-User-License-Agreements (EULAs)) and contracts drafted by nonowners (such as platforms’ terms of use), and highlights the ascendancy of the latter in the user- generated content era. In this era, the drafter of the contract owns nothing, yet seeks to regulate the layman adherent’s creations, and sometimes even to redefine the contours of the public domain. Private ordering is expanding its governing role in IP, creating new problems and undermining the rights that legislators bestow on creators and users. While scholars often discuss the problems caused by IP boilerplate, solutions are left wanting. Inter-doctrinal solutions have been unjustly overlooked. IP scholars reject general contract doctrines as ill- DOI: https://doi.org/10.15779/Z38PG1HP01 © 2019 Amit Elazari Bar On. † Lecturer, UC Berkeley School of Information. This Article is based on my J.S.D (Doctor of Science of Law) Dissertation (UC Berkeley School of Law) filed December 2018 and portions of the paper Amit Elazari Bar On, Copyright and the Greater System of Rights: Utilizing Contractual Concepts to Solve Intellectual Property Problems in Standard-Form Contracts, 29 INTELL. PROP. L.J. 83 (2016). I am grateful for their comments on earlier versions to Lior Zemer, Peter Menell, Steven Davidoff Solomon, Deirdre Mulligan, Chris Jay Hoofnagle, Robert P. Merges, Molly Shaffer Van Houweling, Mark Lemley, David Nimmer, Aaron Perzanowski, Orly Lobel, Mark Gergen, Aviv Gaon, Guy Rub, Eric Goldman, Ted Mermin, Miriam Bitton, Amir Huri, Abraham Drassinower, Niva Elkin-Koren, Uri Hacohen, and the participants of the 2017 Annual Intellectual Property Scholars Conference, the 2017 Internet Law Work-in-Progress Workshop, the 2017 Bay Area Scholars Work-in-Progress Workshop, the J.S.D. Workshop held on Berkeley Law on Oct. 4, 2017. All errors remain my own. 568 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 34:567 equipped. Contracts scholars discard IP considerations, perpetuating consumerist perspectives. This dichotomy, deepened by the preemption doctrine, has led to the underutilization of the prominent doctrine governing standard form contracts: unconscionability. Yet, in the aftermath of ProCD, preemption has failed to solve problems created by contracts in IP settings, while unconscionability has evolved from a legal marginality to a coherent concept. Inspired by the Israeli purposive approach to unconscionability, this analysis aims to resurrect unconscionability as a pragmatic solution to problems created by IP boilerplate. According to this solution, the question of unconscionability is examined by asking, substantially, whether the provision benefits the relevant IP policies or negates them. Drawing on moral foundations, this solution seeks to avoid utilitarian biases and invites discourse between competing approaches. As a legal standard applicable to various relationships, even those that are non-consumer-based, it accommodates the dynamic adjustments often required when IP policies seek to address contemporary problems. While IP scholarship has discarded unconscionability as ill-equipped, this Article suggests that it is an accessible solution that can accommodate extra-contractual notions. Precisely because the doctrine is rooted in contract law, its flexibility and broad applicability are why it could serve as a universal solution to myriad problems created by appropriating contracts. Adopting Unconscionability 2.0 would allow U.S. case law to align the roots of the doctrine with the needs of the information age. 2019] UNCONSCIONABILITY 2.0 AND THE IP BOILERPLATE 569 TABLE OF CONTENTS I. INTRODUCTION ............................................................................. 571 II. INTRODUCING IP BOILERPLATE: WHEN THE FINE PRINT UNDERMINES CREATIVITY AND INNOVATION ....... 586 A. THE ADHERENT-USER AND THE ADHERENT-CREATOR DISTINCTION ............................................................................................... 591 B. ADHERENT-USER IP BOILERPLATE ........................................................ 595 1. Some Examples from Fair Use Waivers to the “Right-to-Repair” Your Smartphone ........................................................................................... 596 2. The Rise (and Fall?) of the “Patent-Wrap” Boilerplate: Limitations on the First-Sale Doctrine, Ownership, and the Sale/License Sham ................. 606 C. ADHERENT-CREATOR IP BOILERPLATE ................................................ 610 1. Social Networks and User-Generated Content: Cognitively Overburdened Creators ................................................................................................ 610 D. THE TECHNOLOGICAL BOILERPLATE: UNCONSCIONABILITY BY DESIGN .......................................................................................................... 612 E. A GAME OF CATCH? SOME EXISTING SOLUTIONS AND THE IP BOILERPLATE PARADOX ............................................................................ 614 III. UNCONSIONABILITY 1.0—A BRIEF HISTORY OF AN ALIENATING DISCOURSE BETWEEN CONTRACTS AND IP LAW ....................................................................................... 622 A. WHY UNCONSCIONABILITY? .................................................................... 622 B. THE UNDERUTILIZATION OF THE UNCONSCIONABILITY DOCTRINE IN IP SETTINGS ............................................................................................ 629 1. The Chicken and the Egg: The Dismissal of Unconscionability in IP Scholarship ............................................................................................ 629 2. The Preemption Doctrine and the Contract-IP “Dichotomy” .................. 636 3. A Limited Tool Set: From ProCD and Preemption to Lexmark and Exhaustion ........................................................................................... 646 4. The Dialogue of the Deaf ....................................................................... 653 IV. UNCONSCIONABILITY 2.0—TOWARDS A REVISED DOCTRINE OF UNCONSCIONABILITY DERIVED FROM INTELLECTUAL PROPERTY RATIONALES ............................... 657 A. THE PROPOSED DOCTRINE OF UNCONSCIONABILITY 2.0 ................. 658 1. Theoretical Background and Comparative Insights: Adopting a Purposive Approach to Unconscionability .............................................................. 658 2. Unconscionability 2.0: The Advantages of the Purposive Approach ........ 666 3. The Adoption of Unconscionability 2.0 in U.S. Law ............................ 676 4. Unconscionability 2.0 in Negotiated Contracts and Between Sophisticated Parties ................................................................................................... 678 B. A ROBUST VISION FOR UNCONSCIONABILITY 2.0 ................................ 681 1. Presumptions of Unconscionability 2.0 ................................................... 681 570 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 34:567 2. Creating an Affirmative Right of Action ............................................... 684 3. Some Case Studies—The Application of Unconscionability 2.0 ............. 687 4. Unconscionability 2.0 in Other Technological Realms ............................ 694 5. Unconscionability 2.0: A “Wild Card” or a Winning Hand—Some Objections and Responses ....................................................................... 697 V. CONCLUSION ................................................................................... 702 “[The] deployment of boilerplate to achieve widespread cancellation of user rights contributes to democratic degradation . the []EULA can override . what the federal intellectual property regimes enacted as appropriate user rights.”1 — Margaret Jane Radin “[T]he rule-making process regarding the use of information is privatized, and the legal power to define the boundaries of public access to information is delegated to private parties.”2 — Niva Elkin-Koren “[T]he fine print is not a contract . It is nothing but paperwork and should have the legal fortune of junk mail.”3 — Omri Ben-Shahar “[F]reedom of contract must mean different things for different types of contracts. Its meaning must change with the social importance of the type of contract . .”4 — Friedrich Kessler 1. MARGARET JANE RADIN, BOILERPLATE: THE FINE PRINT, VANISHING RIGHTS, AND THE RULE OF LAW 168–69 (2012). 2. Niva Elkin-Koren, A Public-Regarding Approach to Contracting Copyrights, in EXPANDING THE BOUNDARIES OF INTELLECTUAL PROPERTY:

Load more

  138

Copy Link