Landmark Case: ProCD, Inc. v. Zeidenberg, 86F.3d 1447, U.S. Ct. App, 7^th Cir. (1996)

Facts: ProCD sold SelectPhone, a database containing information from 3,000 telephone directories. It sold the software to consumers for $150; business paid a much higher price.

Every box containing the consumer version of SelectPhone was wrapped in plastic shrinkwrap and prominently featured text notifying buyers that an enclosed license restricted use of the software. After removing the cellophane cover and opening the box, buyers could access the printed license. Upon downloading the product, the consumer could not use the software without first accepting the license posted on the screen. This license prohibited the buyers from using the database commercially.

Graduate student Matthew Zeidenberg bought the consumer version of SelectPhone, but violated the license agreement by reselling the databases information on the internet.

ProCD sued Zeidenberg, who argued that the license did not apply to him because he never agreed to it. The district court ruled in his favor. It held that, under the UCC, the license did not bind Zeidenberg because it was on the inside of the shrinkwrapped box Thus, he had not seen it until after the bought the product. ProCD appealed.

Question/Issue: Did ProCD and Zeidenberg enter into a contract that included the terms of the license?