ProCD v. Zeidenberg in Context
Contents
1. Were there settlement discussions during this time Dave At some point before the summary judgment motions we made an offer to settle Basically our offer was to make the injunction permanent and then dismiss the suit And they rejected that offer Bill Demanding what Dave One of the things they demanded was that Matt pay their attorneys fees which at that point and remember this is before the summary judgment motions were over 200 000 2004 821 ProCD v Zeidenberg in Context 829 Bill Did you seek any help in formulating legal strategy legal theories Dave Of course we sought help laughs we were both new to this experience So we got help from two law professors one was Dennis Karjala who was at Arizona State and the other was Mark Lemley who was at the University of Texas at the time Bill And how did you learn about them or how did they come to be helpers Dave Well both of them had written law review articles on the legal issues that came up in this case so that was one way they came to our attention And then Matt had contacted them at some point and they had indicated a willingness to help Bill I want to make an editorial comment here I recently received an email from Mark Lemley who is now at Berkeley and who I contacted to let him know that we were going to make this videotape In the email Lemley said that he would like to see a copy of the videotape because he wants to know2. and David and then I got a friend who was a law student at the time at the UW to come along just because laughs there s more strength in numbers And then there was all of them it was at a downtown law firm in a high rise building with the typical posh downtown law firm type environment And it was tense I mean I guess anyone who s been through that position would know that They constantly were attempting to get me to admit things that I didn t want to admit And so it was this tortured language type of thing They would ask me a leading question I would say No And then they would say Well why did you say no That leading question is true And I d say Well I don t agree with the way you said it It would go on like that for quite a while Bill Were they seeking any mformation in particular that you remember Matt Well it was very detailed They wanted to know exactly what happened That s totally understandable But they also wanted to know what I thought I was doing with respect to the law how much I knew about the law those kind of issues Bill What were your feelings at this point in time Were you worried Were you still this kind of cocky graduate student who was a bit of an outlaw Matt Oh no I was very worried I mean I was afraid that this was going to ruin me financially Bill Had you received the demand for attorneys fees at this point Matt Well I don t kno
3. in law school but that was it Bill Well Northeastern is well known for its many clinical internships Dave Right Bill And what motivated you to take this case 828 WISCONSIN LAW REVIEW Dave I was new to town I was unemployed sol Bill You had come here because of Laura s job Dave Because of Laura s job right So I didn t have a job and I thought I d do the case as a way to get some experience and fill my idle hours Bill Now the case was filed in September and as I recall the preliminary injunction came down before the end of the month So that happened very fast Dave It happened in the course of one week The case was filed on a Tuesday The complaint was filed with a motion for the preliminary injunction We responded to that motion on a Thursday and the oral argument on the motion for the preliminary injunction was held on Friday The injunction was issued that same day Bill What happened next Dave Well then Judge Crabb put the case on a fast track We laid out a schedule for the entire case It was scheduled to go to trial in January which was pretty quick Bill Was there discovery Dave We went through the standard discovery of interrogatories and requests for documents and then there were several depositions They deposed Matt and they deposed the representative of the company that was hosting Matt s website And we deposed the president of ProCD Bill
4. phrase I used at the time and continued to use is that Judge Easterbrook hazed me It was a pretty awful experience Bill There were a lot of questions Dave There were a lot of questions He made it plain that he thought we were in the wrong and he was very aggressive with us And the other odd thing I thought was that it was a three judge panel and Judge Easterbrook was the only one that talked all day The other two were completely silent Bill Matt what happened after the decision came down from the Seventh Circuit Matt Well it was interesting Right after the argument we were interviewed by a reporter for a Chicago law newspaper or something like that Well actually we weren t mterviewed he interviewed their side and didn t interview us And then I went over to him and said you know What s the deal Aren t you a journalist covering both sides of this Laughs I guess not 2004 821 ProCD v Zeidenberg in Context 835 Anyway we ended up settling the case We decided not to file for certiorari The chances of getting that were slim at best Actually I tried to contact one other attorney to talk about requesting certiorari but I couldn t get in touch with him Bill How long was it between the decision and the settlement do you think Matt Very short Dave Within a month Bill Can you say anything about the terms of the settlement Matt No Bill Well that kind of ends t
5. the country on the Web first right Matt Right I had to sit there and wait for the thing to download the listings and it cost money This was at a time when computers were not as fast and disk space was not as cheap And so I put California and Wisconsin up on the Web initially And I had plans to put the whole country up Bill And were you getting many hits Matt Yeah I was getting like 20 000 hits a day That was because I promoted it on bulletin boards and places like that and I was getting word of mouth on the Web Bill How long was your site up before it was enjoined Maitt 1 think something like May to September it was enjoined in September I believe 826 WISCONSIN LAW REVIEW Bill And the site never went back up again once it was enjoined Matt We re getting a little ahead of ourselves but I got another provider when the injunction was lifted after Judge Crabb s decision granting us summary judgment I got another provider and I was planning to put it back on line but I don t think I actually did Bill How quickly did ProCD respond once you had established the website Matt Well it s quite a long time ago now I think I had established it around May and then they got wind of it around July Their attorneys wrote me well first they tried to call me on the phone but I kind of stonewalled that Then their attorneys wrote me a letter and then I wrote sort of a response I look at th
6. 25 Bill And anybody else Matt Yeah I talked to a friend of mine who is a lawyer in Arizona I talked to a local corporate lawyer who actually helped me set up a company to try to shield me from some liability that might arise Bill When you set up the website I understand you used this product but also another product as well Matt Right There was another company s product which I think was the only other one that allowed unlimited downloading So I figured that 1 ll use both of them and that way I could get a defense against any originality claims they might have from the fact that what I had was exactly what they did Because I was mixing the two Also 1 made what I consider to be a serious tactical error What I should have done if I wanted to avoid the litigation altogether is to have taken the intersection of the two sets of listings The companies put phony listings in their product which they call seeds to allow them to detect anyone copying their listings So if I d done the intersection of the two sets as opposed to the union of the two sets I would have eliminated the seeds A friend of mine at the time advised me to do that but I got a little greedy I had this sort of outlaw state of mind It wasn t all about money It was like I m going to do this damn the torpedoes Laughs Bill Now when you set the site up did it include listings for the whole country You only had listings for part of
7. HEINONLINE Citation 2004 Wis L Rev 821 2004 Content downloaded printed from HeinOnline http neinonline org Sun Sep 7 01 30 50 2014 Your use of this HeinOnline PDF indicates your acceptance of HeinOnline s Terms and Conditions of the license agreement available at http neinonline org HOL License The search text of this PDF is generated from uncorrected OCR text To obtain permission to use this article beyond the scope of your HeinOnline license please use https www copyright com ccc basicSearch do amp operation go amp searchT ype 0 amp lastSearch simple amp all on amp titleOrStdNo 0043 650X APPENDIX PROCD V ZEIDENBERG IN CONTEXT INTRODUCTION The following is a transcript of a videotaped interview of Matthew Zeidenberg defendant in ProCD Inc v Zeidenberg 86 F 3d 1447 7th Cir 1996 and David Austin his attorney in that case The interviewer is Bill Whitford Emeritus Professor of Law at the University of Wisconsin Law School The videotape was first shown on February 7 2004 at the Freedom from Contract Symposium during which the papers included in this symposium issue were first presented The videotape was made about two weeks before that The videotape can be downloaded from the Law Review s website The transcript has been edited for style primarily to eliminate references and usages appropriate to an oral presentation that are less appropriate for a written account of the intervi
8. actually ended up studying both Bill And you re pursuing two PhD s Matt Actually I already have my Computer Science PhD and I m probably going to get my other one Sociology within this year or soon thereafter Bill How did you first come to be interested in and learn about the ProCD product Matt The ProCD product was called SelectPhone I was doing some work for some political groups We wanted to look up phone numbers for names on voter lists that we possessed SelectPhone was one of the first products that allowed you to download the numbers of all the people in a particular zip code and then you could match a voter list against the addresses and phone numbers get the phone numbers and solicit those people So I initially bought the product for that One of the things that attracted me to SelectPhone was that they advertise that there are no limits on how many records you could download from the CD Bill Pd like to interrupt here a little bit for the sake of the viewers I have here some Xeroxes provided to me by Matt of the actual box that he bought I want to call attention to some print that is too fine to show on camera In eight point type here pointing there is this language HomePhone offer HomePhone was the name of the product or SelectPhone Matt Pm not sure Bill It says HomePhone Anyhow it offers unlimited access and unlimited use of all 80 million listings period Other
9. ding interpreted a section of some federal act that had not previously been interpreted in a published opinion This holding was not appealed and reflected very much the plain language of the statutory section The second main holding was that as a matter of Wisconsin contract law the contract was formed at the cash register The terms revealed only later on pages 72 and 73 of the user guide that I referred to earlier were at best proposed modifications to the contract Applying sections 2 207 or 2 209 in the UCC they did not become part of the contract Judge Crabb relied heavily on the cases StepSaver and Arizona Retail Systems that Matt referred to earlier This is a holding of course that was reversed on appeal by Judge Easterbrook And the third principal holding was that even if under state law ProCD s restricted use contract term had become part of the contract between ProCD and Matt the contract term was preempted by section 301 of the Copyright Act and the Supreme Court s Decision in Feist holding the data was not copyrightable The gist of Judge Crabb s argument here is summarized in these two sentences Plaintiff s argument boils down to the proposition that it is unfair and commercially destructive to allow defendants to take the information plaintiff s assembled with a significant investment of time effort and money and use it for commercial purposes without paying any compensation to plaintiff Although the pro
10. e advertising I got one guy to give me a check for a hundred bucks at one point but I had to return it because the injunction had already been entered against me before I could get his advertisement up on the Web Bill So before you had any advertising up on the Web you were enjoined Matt Right Bill That incidentally is a fact that is incorrectly stated in Judge Easterbrook s opinion Did you seek any legal advice before you set up the Web site containing the information contained in the ProCD product Matt Yeah The first thing I did was some legal research of my own I m not a lawyer but I poked around and I read Feist and then I read various shrinkwrap cases like StepSaver and Arizona Retail Systems Basically my impression was at that point that there hadn t been any shrinkwrap agreement that had been upheld by the courts I think that my case might have been the first shrinkwrap agreement that was upheld by the courts Bill Did you consult any lawyers Matt Yeah After I did my own legal research I went to see Professor Kidwell here at the University of Wisconsin Law School and he basically said Yeah you re probably legally in the clear but you ll definitely be sued Laughs So he was right 2 Note that Matt s memory was incorrect here the conversation between him and Professor John Kidwell was over the phone as Kidwell later pointed out 2004 821 ProCD v Zeidenberg in Context 8
11. e response now as sort of arrogant laughs but it was a sort of crazy thing Their attorneys were Hale and Dorr who go back I don t know centuries or something Laughs It s like if you saw the Bill They came across on the Mayflower right Matt Yeah Bill And they also represented you told me the defendants in the book and movie A Civil Action Matt Right Robert Duvall was the lawyer in the movie Bill So did you fear that a lawsuit was coming as a result of these phone calls and this letter you sent and stuff like that Matt Yeah Bill Did you have any legal representation at that time Matt No Laughs That s how Dave Austin came into it Bill How did you get Dave Matt Well Dave s wife Laura who I actually still work with she was coming to town to join our office where I work and I still work there and so does Laura and so Id heard that Laura was married to a lawyer or actually they d just gotten married right at that time And he had just graduated from law school and so I thought maybe he d be interested So I got m touch with hin 2004 821 ProCD v Zeidenberg in Context 827 Bill And just one final question before I turn to Dave Was there any publicity When the law suit was ultimately filed was there any local publicity or anything arranged by ProCD in connection with the filing of the lawsuit Matt Yeah well I m not exactly sure if this wa
12. ently the court felt it was at the time They allowed half an hour on each side which was double the normal amount of time for argument Bill Do you have any idea why Dave I don t know why There was never any indication from the court why Bill Were there any amici in the case Dave There were four amici there were three on ProCD s side and one on our side Bill And who were the amici Dave There were some that I would call the heavy hitters on the other side the Business Software Alliance which is the dozen or fifteen biggest software producers in the country and another trade association that was about 1200 software distributors 834 WISCONSIN LAW REVIEW Bill And on your side Dave And on our side the Committee for Interoperable Systems Mark Lemley who had helped us in the trial court was the attorney for that group and wrote that brief Bill Do you think it s reasonable to speculate that the fact that these amicus briefs were filed might have had something to do with the extended argument Dave It seems likely Bill Did those amici attorney argue Dave No ProCD and we argued but that was all Bill Can you describe what the argument was like as an existential experience Dave As an existential experience on a scale of one to ten it was the worst day of my life You know I admit that I was in over my head and didn t really know what was going to happen The
13. ew No substantive changes have been made I BACKGROUND Bill Whitford My name is Bill Whitford I have here Matt Zeidenberg and David Austin They are the defendant and attorney respectively in the case of ProCD v Zeidenberg one of the most famous American contract cases in the past decade I have prevailed upon Matt and David to relate some of the events connected with this case that don t appear in the opinions Our purpose is to provide information to the law teaching profession for whatever use they want to make of it in their writings and in their teaching I will be interviewing Matt and David I will start with Matt and go over some of the events that preceded the litigation When I get to the litigation 1 will introduce Dave and ask him about his recollections and reactions Matt can you give me a brief biography How did you end up at Wisconsin and what are you doing now Matt Well I came here for graduate school I went to Harvard as an undergrad studied physics and then decided I wanted to go into Computer Science Wisconsin has a good Computer Science program so I came here 1 Wisconsin Law Review ProCD v Zeidenberg in Context at http students law wisc edu lawreview zeidenberg 822 WISCONSIN LAW REVIEW Bill And I think you re also a graduate student in Sociology now Matt Yes I was also interested in Sociology and Wisconsin has a very good graduate program in Sociology as well so I have
14. he story I now want to ask each of you let me start with you Matt if you have any kind of final reflections on this experience that you d like to share Matt I guess the first thing is that if I had it to do over again I would do it over again Because contrary to what a lot of law professors have written about this I do not think that I was in the wrong ProCD knew exactly the legal environment under which they were operating And they were doing exactly what I was doing they were copying phone books I was copying their listings All of it was in the public domain You know that was what the law was at the time That s the way that business operates people follow the rules that are put down at that time If they want to operate under that regime they should expect people like me to pop up and try to do what I tried to do So I have no regrets The other thing that I find interesting is that coming into this as a sort of a naive person who d never been involved in a lawsuit before I really expected a lot more consistency in the law I recently read a book by Robert Kagan which is called Adversarial Legalism and basically in this book he argues that in the American system as opposed to the European system judges are given a lot more latitude to make the kinds of decisions they want to make In the European system they re controlled in a much more bureaucratic type hierarchical system Here you go into court you real
15. le and Dorr Dave I would say it s doable don t be intimidated You have access to the same law and resources They have more people and more money but you can write briefs that are just as good or better than a big law firm and you can win Bill Well I want to thank the two of you for your time Matt You re welcome
16. ly don t know what you re going to get And that s not what I expected I researched what the law was and I went into court and I expected to get what I got from Barbara Crabb And then when I got to Judge Easterbrook I had no idea about you know 836 WISCONSIN LAW REVIEW the Olin Foundation and law and economics and the Chicago School and Judges Easterbrook and Posner and this whole thing you know I had no idea that this kind of thing could happen I was just totally blown away So those are my reflections Bill So it was an educational experience Matt It was very educational Bill And Dave do you have any final reflections that you can share Dave My reflection on the legal part of the case is similar And I think that quote from Judge Crabb that you read really is true that she decided the case on the law disregarding the equity And Judge Easterbrook decided it on the equity and then worked backwards to find the law that he thought would support it Personally I m not as confident as Matt that I would do it again It was pretty hard and challenging at the time and you know it s always hard to lose in the end But in retrospect I think it s great I have this great story to tell and for some reason we re well known in the legal world which is very funny to me Bill And would you what would you say to other people who would consider taking a case as a solo practitioner going up against like Ha
17. no oral argument Judge Crabb decided it on the briefs I remember going back to the David versus Goliath aspect of the case I remember one part of the briefing that I particularly liked was that the Hale and Dorr lawyers had cited a Supreme Court case in one of their briefs and they hadn t even Shepardized it and the point they were relying on had been overruled ten years later by a unanimous Supreme Court So in the midst of all this pressure and intimidation you know there were moments of comic relief that this prestigious law firm didn t even Shepardize its cases Bill At this point l d like to make a brief statement about the trial court opinion Many of the viewers of the tape will have read it but many will not have And Pd just like to promote it a little bit It s a very good opinion by our own district court judge here Barbara Crabb who should say is also an alumna of the University of Wisconsin Law School although she was not my student in contracts The citation is 908 F Supp 640 It s a very long opinion with a much more complete statement of the facts than you ll find in the Seventh Circuit opinion There were three main holdings in the trial court opinion and a few subsidiary ones 832 WISCONSIN LAW REVIEW The first main holding was that Matt had not violated the Copyright Act by downloading a software program onto his hard drive although the program itself was copyrightable as all conceded This hol
18. phone books limit you to a mere 5000 records At the very bottom of the page in smaller type six or seven point type is the following language which is quoted in Judge Easterbrook s opinion All listings are subject to terms and conditions of the enclosed license agreement Excuse me for the interruption Matt 2004 821 ProCD v Zeidenberg in Context 823 Matt So basically I was interested in the fact that there were competing products and they ProCD were pushing the idea that a buyer could do unlimited downloading When you buy something like this product what you want to use it for is to get listings out of it So I bought the product in part because of that and then when I popped open the user guide and 1 m actually still stunned to this day that this was in there there s this letter from a gentleman that I later met James Bryant the President of the ProCD in which he said Well the reason why we were able to start this company was because of the Feist decision And I had no idea what the Feist decision was so that piqued my curiosity I went on the Web and I looked it up Basically it ruled that a lot of factual information wasn t subject to copyright I believe it was a unanimous Supreme Court decision Bill That s right Matt So this piqued my interest and I said Hmm what s the deal here Laughs How can this guy think that he can go around and redistribute this information and ye
19. position has substantial equitable appeal it is one that the United States Supreme Court rejected specifically in a nearly identical context four years ago citing Feist This holding was reversed on appeal as well III THE APPEAL Bill Okay Dave I assume that ProCD made it clear that it would appeal Dave Yes Bill Very quickly once the decision came down Dave Right 2004 821 ProCD v Zeidenberg in Context 833 Bill Did you undertake to do the appeal Dave I did not want to do the appeal I thought I had done well enough in the district court I didn t want to press my luck in the circuit court I had no experience in law school with a circuit court argument So I prevailed upon Matt to get another attorney to handle the appeal And for some foolish reason I kept my name on the case in the Seventh Circuit Then it came about that a week before the oral argument this guy totally bailed out on the case and Bill He did the briefing this other attorney Dave He did all the briefing and then a week before the argument he called me up and said I m leaving the country Here s the file You ve got to do the oral argument Bill So you actually did the oral argument in the Seventh Circuit without having written the briefs Dave That s right Biil How much time was allotted for oral argument Dave Looking back we can see this had become a very important case and appar
20. s before or after the filing of the lawsuit but there was quite a bit of publicity I was on two TV stations I was in the both local newspapers the campus papers and the Milwaukee Journal Sentinel Bill These are people who contacted you Matt Yeah And then Bryant who was the President of ProCD went around giving interviews He was calling me a criminal He may bave complained to the DA trying to get me indicted II THE TRIAL Bill I m going to turn to Dave now Dave can you give us a brief biography how did you end up in Madison where do you come from how much legal experience did you have when Matt retained you What are yon doing now Dave I grew up in Ann Arbor Michigan I did my undergraduate work at the University of Michigan I went to Law School at Northeastern University in Boston I graduated from Northeastern in May of 1995 And then as Matt said my wife Laura and I moved here that summer I took the bar exam here in Wisconsin that July and then I was admitted to the bar in September of 1995 And one of the ironies of this case is that I was admitted to the bar on exactly the same day that the complaint was filed I was sworn in at a noon ceremony in the capitol and then later that afternoon Matt contacted me and told me he had just been served with the complaint So to your question of how much legal experience I had as an attorney zero I had you know whatever experience I had gotten as an intern
21. t use this contractual language to you know he was basically shrinkwrapping a copyright around these listings is the way I looked at it Bill Now the contractual language itself was also in this manual Matt Yeah in the back Bill I have here a photocopy of the manual It includes the letter from President Bryant that Matt referred to The contractual language is On pages 72 and 73 of the manual This is the only place in the manual where there s any reference to returning the product if the buyer is unsatisfied with anything in the user manual It s on the top of page 72 in I think seven point type Matt what was the state of the Web at the time Was it easy to get telephone numbers and so forth on the Web Matt No The Web was basically in its infancy This was 95 and I think the Web had basically gotten popular in maybe 93 or something like that It existed in essential form maybe around 91 but in 95 it was really just beginning to take off and there was nobody offering this kind of information I was obviously was just a grad student but I figured that if I jump in first maybe I can get some advantage here Bill So were you hoping to make money on this venture 824 WISCONSIN LAW REVIEW Matt Yeah Bill How were you going to make money Matt Banner advertising Bill Did you make any money Matt No Bill Why not Matt Well I was just going to sell Yellow Pages typ
22. w but I knew that there was a definite possibility for a severe downside to this whole situation laughs Bill Dave when you took the deposition of President Bryant what information were you seeking Dave One part of the deposition was focused on this unlimited downloading concept and we were getting information about how other users of SelectPhone used the product One of our points was that the product was used for commercial purposes and that they expected and 2004 821 ProCD v Zeidenberg in Context 831 knew people were using it for commercial purposes We were trying to show that Matt s use was expected and similar to regular use of the product We also discussed their return policy which looking back I m sad that we didn t develop more since Judge Easterbrook makes so much of the fact that if you don t like the terms of the license you can just return it And in fact in this deposition Bryant said We don t have a return policy We handle returns on an ad hoc basis It could be accepted or not So Judge Easterbrook s point that you can always return the product is not supported by the record in this case Bill Was that deposition in the record Dave Yes Bill And then at some point each side moved for summary judgment as I understand it Dave Right Bill Was there anything special about the briefing or argument at that time that you d want to note on this tape Dave There was
23. what Matt Zeidenberg looks like He still remembers the Saturday he got a phone call from Matt who said I m a graduate student who read Feist and your law review article and now I m being sued Laughter So we are sending Professor Lemley a copy of this video Were there any Rule 11 motions Dave Dave Yeah Part of the case was no pun on my name was sort of this David versus Goliath story As Matt said ProCD was represented by Hale and Dorr which is one of Boston s premier corporate law firms And Hale and Dorr had three attorneys on the case a partner a senior associate and a junior associate And then they also had local counsel they had two attorneys from a Madison law firm as well Then there was me on the other side And so part of the case was their attempts to intimidate us Part of it was what Matt said threatening him with criminal action The part against me was filing a Rule 11 motion that our arguments were frivolous And that Rule 11 motion was actually pending at the time Judge Crabb issued the summary judgment motion decision Bill Matt let me turn back to you if I can What was the deposition like What do you remember about the deposition What information 830 WISCONSIN LAW REVIEW did they want Did they threaten anything Tell us a little bit about the hearing Matt Well it was tense because you know as David just indicated there was basically three of us on our side There was me
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