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ProCD, Inc. v. Zeidenberg
United States Court of Appeals, Seventh Circuit
86 F.3d 1447 (7th Cir. 1996)
ProCD (plaintiff) sells a software product known as its SelectPhone database. The product consists of a detailed address directory and is sold to both commercial and non-commercial users. To make more profit, ProCD engages in price discrimination by charging a higher price for commercial users. It enforces its price discrimination scheme by including a license within the software package that limits use of SelectPhone to non-commercial purposes. The license terms are printed in the manual located inside the SelectPhone software packaging, and also pop up on the computer screen whenever the product is run. Matthew Zeidenberg (defendant) purchased SelectPhone and ignored the license agreement. He started his own company to sell the information contained in SelectPhone to commercial users at a cheaper price than that charged by ProCD. ProCD brought suit against Zeidenberg in federal district court for breach of contract. The district court held that the license agreement was not enforceable on the ground that it was inside the box rather than printed on the outside. ProCD appealed.
Rule of Law
Holding and Reasoning (Easterbrook, C.J.)
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