EULAs and the First Amendment

Freedom to Tinker (Ed Felten) links to reports that the New York State Supreme Court* in Manhattan invalidated a clause in the End User License Agreements (EULAs) under which Network Associates, Inc. (NAI) distributed its software. The pernicious clause forbade users from publishing reviews of NAI software without permission of the company. I like the result, but I worry it may not stand for long.

The court's decision appears to turn on free speech, but I foresee problems with the cause of action; it appears that the New York Attorney General's office had brought the suit claiming that the EULA clause constituted a deceptive practice forbidden by New York law. I don't know the law, but I suspect that an appellate court could reverse that part of the claim, thereby eliminating the Attorney General's standing to bring the suit and leaving it up to a private party to sue or be sued by NAI before giving a definitive holding on the First Amendment question. That's problem one.

I want to see the court's First Amendment analysis that concludes that the clause is clearly unenforceable. The First Amendment question becomes tricky because the First Amendment rarely, if ever, renders part of a private agreement unenforceable. Parties can voluntarily agree to keep silent; this is why parties can agree to non-disclosure agreements and can enforce them. If you really treat this like a run-of-the-mill non-disclosure agreement, there's arguably no First Amendment free speech claim. I think that this could be a huge problem, because we desperately need reliable software reviews in the market for computer software. Numerous EULAs forbid users from publishing benchmark test results of software, and some EULAs, like NAI's, forbid any reviews without permission. If there's no First Amendment claim, how ought contract law treat this sort of provision in End User License Agreements? What about other pernicious clauses that find their way into shrink-wrap or click-wrap agreements?

Peter Suber at FOS News seems to think that this is a fair use/copyright issue, but it's not-- not quite. The EULA clause doesn't say anything about how one can use the software; instead, it controls what one can say about it.

So far, we've been friendly to non-disclosure clauses in business dealings between individuals and companies and between companies. There are good reasons for that, too -- we want companies to be able to develop their ideas in secret, and we want them to be able to protect legitimate trade secrets. Should we be as ready to enforce non-disclosure clauses when they appear in shrink-wrap licenses that govern the licensing relationship between a software publisher and the general public? I don't think so. Now we just need a nice clean legal principle on which to exclude those clauses that doesn't also entirely throw out shrink-wrap and click-wrap licenses (much as I sometimes think I might like that, it won't happen) and that also preserves non-disclosure agreements in technology and business development. Maybe the New York court's got one. We'll see.

* In New York, the "Supreme Court" is a trial court, so Network Associates has several possible stages of appeal open to it.