The Song that Never Ends

by Charles Miller on March 31, 2008

The process goes something like this:

  1. FooCorp offers some service that involves the hosting, distribution or modification of user-generated content
  2. Company sends memo to lawyers: "we need a EULA"
  3. Lawyers panic. How can FooCorp possibly protect itself from all possible avenues of litigation when their entire service is predicated on processing digital copies of someone else's copyright material?
  4. Lawyers put a standard boiler-plate clause in the EULA granting FooCorp a "royalty-free, nonexclusive, perpetual, irrevocable, and fully sublicensable license to use, distribute, derive revenue or other remuneration from, reproduce, modify, adapt, publish, translate, publicly perform and publicly display such Content (in whole or in part) and to incorporate such Content into other Materials or works in any format or medium now known or later developed."
  5. Service is launched.
  6. Within minutes, someone actually bothers to read the EULA, and points out that this clause is complete bullshit.
  7. Users of said service revolt
  8. Company retreats with egg on its face and rewrites EULA

The first time I remember seeing this happen was when Geocities was bought by Yahoo back in 1999. Why, then, is it still happening today?

As more and more of our interactions with companies are governed by explicit legal agreements, companies need to realise that your legal terms are part of the public face of your company. The clauses in your EULAs are the most explicit evidence available of the regard in which you hold your customers, more than anything else because you know somebody has sweated over them word for word to give them a precise, legally binding interpretation.

(Similarly, your employment contracts say what you really think about your employees once the feel-good bullshit has been swept out of the way.)

Adobe don't want to claim ownership of your photos any more than Yahoo wanted to ruthlessly exploit a few hundred thousand pastel-coloured Charmed fan-sites back in 1999. It's just a lot easier, in the face of the possibility that some legal edge-case in copyright law might expose you to damages later on, to claim you have the right to do anything you want "just in case".

Often when a lawyer makes such an ambit claim, there will be another lawyer on the other end ready to strike a bargain somewhere in the middle. Other times there will be a large number of disconnected third parties who either won't read the fine print, or who figure there's nothing they can do to change the terms.

The Internet turns all these disconnected users into a community, though, and turns what used to be the private acceptance of an unavoidable EULA into an exercise in collective bargaining.

Most companies take great pains to make sure their public-facing statements present the company in the correct light. It's about time lawyers were subject to the same processes.

(Further reading: Dangerous Terms: A User's Guide to EULAs by the EFF)

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