Cairo, Inc. v. Crossmedia Services, Inc.

Crossmedia Services, Inc. (CMS) (defendant) operated a website displaying advertisements and available merchandise at local brick-and-mortar stores. Webpages on CMS’s website contained a notice stating that by continuing to the use the website, users agreed to CMS’s terms of use. The notice contained a link through which users could access the full terms of use. The terms of use contained a forum selection clause stating that any disputes arising from the terms of use would be adjudicated in state or federal court in Chicago. Cairo, Inc. (Cairo) (plaintiff) operated a similar website. Cairo compiled promotional materials from retailers and third parties, including CMS. Cairo collected the information via “robots” or “crawlers” that visited websites and recorded the data therein. Cairo’s website contained thumbnail images of information from CMS’s website. Cairo users could click on the thumbnail to go directly to CMS’s website. CMS sent a cease-and-desist letter to Cairo. Cairo brought suit in the United States District Court for the Northern District of California, seeking a declaratory judgment that it did not infringe CMS’s intellectual property rights. CMS filed a motion to dismiss for improper venue because, pursuant to the forum selection clause in the terms of use, Cairo should have filed its lawsuit in a state or federal court in Chicago. Cairo argued that there was no contract formed between the parties that would render CMS’s terms of use binding on Cairo. Cairo acknowledged that it was aware of the terms of use as of the day before it received the cease-and-desist letter.