contracts – internetcases – Attorney Evan Brown

March 26, 2026 Artificial Intelligence, Contracts, First Amendment

Court blocks federal crackdown on Anthropic

anthropic contract department of war

The United States District Court for the Northern District of California granted Anthropic’s motion for a preliminary injunction, finding it likely to succeed in challenging federal actions that barred it from government work and that labeled it a national security supply chain risk.

Plaintiff AI company Anthropic PBC sued defendant U.S. Department of War and other federal defendants after the government moved to cut it off from federal contracts, pressure defense-related companies to stop working with it, and designate it a supply chain risk. Plaintiff alleged the measures were unlawful retaliation for its public criticism of defendant’s demand that Claude be available for all lawful military uses, including mass surveillance of Americans and lethal autonomous warfare.

Requested relief

Plaintiff asked the court to preliminarily enjoin defendant from implementing or enforcing three challenged actions: (1) a presidential directive ordering agencies to stop using Anthropic technology, (2) a directive from Secretary Pete Hegseth cutting Anthropic off from military-related commercial relationships, and (3) the Department of War’s supply chain risk designation. Plaintiff argued these actions violated the First Amendment, the Fifth Amendment, and the Administrative Procedure Act.

Court’s ruling

The court granted the preliminary injunction in a modified form (that varied from what Anthropic had proposed). It concluded plaintiff was likely to succeed on its First Amendment retaliation claim, its procedural due process claim, and its APA claims that the supply chain risk designation and Hegseth directive were contrary to law, exceeded statutory authority, and were arbitrary and capricious. The court also found plaintiff had shown irreparable harm, that the equities and public interest favored relief, and that a nominal $100 bond was sufficient.

Why it ruled

The court found the record supported an inference that defendant acted to punish plaintiff for speaking publicly about AI safety and for criticizing the government’s contracting position, rather than to address a genuine national security threat. It said the broad federal ban and supply chain risk label went far beyond simply stopping use of Claude, and it emphasized that the Department of War had previously praised Anthropic and raised no comparable security concerns until the public dispute. The court also found serious procedural flaws, including lack of notice and opportunity to respond, and held that the statutory supply chain risk framework did not fit plaintiff’s conduct because the record did not show sabotage, subversion, or any reasoned determination that less intrusive measures were unavailable.

Anthropic PBC v. U.S. Department of War, et al., Case No. 26-cv-01996-RFL (N.D. Cal. Mar. 26, 2026)

[Read the full opinion]

February 25, 2025 Contracts, Social Media

YouTube prevails in the Second Circuit over content removal breach of contract claim

Plaintiff sued defendants YouTube and Google for breach of contract, claiming that defendants violated their Terms of Service by removing and restricting plaintiff’s uploaded content without prior notice or cause. Plaintiff argued that defendants’ actions went against their agreement, which governed plaintiff’s use of the platform and the operation of plaintiff’s channels.

Defendants moved to dismiss plaintiff’s breach of contract claim, which the district court treated as a motion for summary judgment. The court granted the motion, finding that the Terms of Service clearly allowed defendants to remove content at their discretion. Plaintiff sought review with the Second Circuit. On appeal, the court affirmed the dismissal.

The appellate court noted that defendants’ Terms of Service explicitly reserved the right to take down content that violated their policies or posed potential harm. The agreement also stated that defendants would notify users after content was removed but did not require prior notice or a detailed explanation before taking action. Plaintiff received an email explaining that defendants removed content for serious or repeated violations of their Community Guidelines, which the court found sufficient under the contract’s terms.

On appeal, the pro se plaintiff did not present specific arguments against the district court’s decision. Instead, plaintiff repeated claims from the original complaint and attempted to introduce new allegations, including violations of intellectual property rights and his right to free speech. The appellate court declined to consider these new arguments because they were not part of the original case. Given the unambiguous contract terms, the court ruled that defendants had not breached the agreement and upheld the lower court’s ruling in favor of defendants.

Three reasons why this case matters:

Clarifies platform control – The ruling reinforces that social media companies have broad discretion under their Terms of Service to remove user content.
Limits user challenges – It highlights the difficulty users face when challenging content moderation decisions through breach-of-contract claims.
Confirms contract enforcement – The case affirms that courts will uphold clear contractual terms, even if users feel the enforcement is unfair.

Qian v. YouTube, LLC, 2025 WL 582785 (2d Cir. Feb. 24, 2025)

February 29, 2024 Contracts, Litigation

Nvidia forces consumer lawsuit into arbitration

arbitration provisoin

Plaintiffs filed a class action suit against Nvidia alleging that Nvidia falsely advertised a game streaming feature for its Shield line of devices which was later disabled, thus depriving consumers of a paid feature and devaluing their devices. The suit included claims of trespass to chattels, breach of implied warranty, and violations of various consumer protection laws.

Nvidia filed a motion to compel arbitration, citing an agreement that users ostensibly accepted during the device setup process. This agreement provided that disputes would be resolved through binding arbitration in accordance with Delaware laws and that any arbitration would be conducted by an arbitrator in California.

The court looked to the Federal Arbitration Act, which upholds arbitration agreements unless general contract defenses like fraud or unconscionability apply. Nvidia emphasized the initial setup process for Shield devices, during which users were required to agree to certain terms of use that included the arbitration provision. In light of Nvidia’s claim that this constituted clear consent to arbitrate disputes, the court examined whether this agreement was conscionable and whether it indeed covered the plaintiffs’ claims.

The court found the arbitration agreement enforceable, rejecting plaintiffs’ claims of both procedural and substantive unconscionability. The court concluded that the setup process provided sufficient notice to users about the arbitration agreement, and the terms of the agreement were not so one-sided as to be deemed unconscionable. Furthermore, the court determined that plaintiffs’ claims fell within the scope of the arbitration agreement, leading to a decision to stay the action pending arbitration in accordance with the agreement’s terms.

Davenport v. Nvidia Corporation, — F.Supp.3d —, 2024 WL 832387 (N.D. Cal. Feb 28, 2024)

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February 18, 2024 Contracts, Licensing

Software reseller not entitled to preliminary injunction to protect customer relationships

Plaintiff CD appointed defendant SST to be the exclusive reseller to certain customers of CD’s software development platform. CD sued SST for breach, and SST likewise filed counterclaims for breach of contract and fraudulent inducement. SST sought a preliminary injunction against CD, asking that the court prohibit CD from unilaterally terminating the reseller agreement.

SST asserted, among other things, that it would suffer irreparable harm from this termination, citing potential loss of solicited clients and reputational damage. CD argued, however, that these asserted harms could be remedied monetarily, and thus did not qualify as irreparable.

The court agreed with CD, finding SST’s arguments regarding reputational damage and loss of client relationships to be speculative and unsupported by concrete evidence. As such, these claims did not meet the stringent criteria for irreparable harm, which requires a clear, immediate threat of injury that monetary compensation could not redress.

Further undermining SST’s claim of irreparable harm was the notion that any potential financial losses due to CD’s actions, including the costs associated with resolving issues with target accounts or transitioning to alternative software solutions, were quantifiable and thus recoverable in monetary terms. The court noted that SST’s reluctance to make additional payments to CD for resolving software access issues did not constitute irreparable harm, as those could be recouped in resolution of the contract dispute. Moreover, the court pointed out that SST’s concerns about CD not restoring access post-payment were speculative and lacked evidentiary support, given the record showing ongoing negotiations and concrete offers from CD.

Citizen Developer, LLC v. System Soft Tech., Inc., 2024 WL 554140 (M.D. Penn. February 12, 2024)

Click to Agree: Online clickwrap agreements steered bank lawsuit to arbitration

online terms and conditions

Plaintiffs sued their bank alleging various claims under state law. The bank moved to compel arbitration based on various online clickwrap agreements plaintiffs had entered into.

One of the clickwrap agreements required plaintiffs to scroll through the entire agreement and then click an “Acknowledge” button before continuing to the next step. Citing to the case of Meyer v. Uber, 868 F.3d 66 (2d Cir. 2017), the court observed that “[c]ourts routinely uphold clickwrap agreements for the principal reason that the user has affirmatively assented to the terms of agreement by clicking ‘I agree.'”

Similarly, for the other relevant agreements, plaintiffs were required to click a box acknowledging that they agreed to those agreements before they could obtain access to digital products. Again, citing to the Meyer case: “A reasonable user would know that by clicking the registration button, he was agreeing to the terms and conditions accessible via the hyperlink, whether he clicked on the hyperlink or not.” By affirmatively clicking the acknowledgement, plaintiffs manifested their assent to the terms of the these agreements.

Curtis v. JPMorgan Chase Bank, N.A., 2024 WL 283474 (S.D.N.Y., January 25, 2024)

The power of publicity and trademark use provisions in legal agreements

publicity agreement

In today’s brand-conscious marketplace, legal agreements between businesses often contain clauses allowing for publicity of the agreement itself and use of each other’s trademarks. This practice of mutual brand promotion can lend credibility to the involved parties and also serve as a powerful marketing strategy.

Understanding Publicity and Trademark Use Provisions

Publicity provisions in a legal agreement permit the parties involved to disclose specific details about their agreement to third parties. This could involve a simple announcement about the partnership or a more detailed disclosure about the agreement’s purpose and scope.

Trademark use provisions allow parties to use each other’s trademarks, logos, or brand names. This could be in marketing materials, on products, or in other forms of communication such as websites and social media content.

Why Include Publicity and Trademark Use Provisions?

While the specifics can vary, there are several general reasons why parties might wish to include these provisions:

Brand Awareness: Such provisions can help increase brand visibility and recognition, particularly when partnering with a well-known or highly respected company.
Credibility and Trust: The ability to publicize a partnership or to use a trusted brand’s trademark can lend credibility and foster trust among customers and stakeholders.
Market Penetration: For companies looking to break into new markets, a strategic partnership with a well-known brand can offer a significant advantage.

Key Considerations

Before including these provisions in an agreement, the parties should consider several key points:

Scope of Use: The agreement should clearly define what aspects of the agreement can be publicized and how each party’s trademarks can be used.
Quality Control: Trademark owners will want to ensure that their trademarks are used in a manner consistent with their own quality standards and brand identity.
Duration and Termination: It should be clear when the rights to publicity and trademark use begin and end, and what happens upon termination of the agreement.
Approval Process: Typically, any use of the other party’s trademark or any public disclosure of the agreement would require prior approval.
Indemnification: The agreement should include indemnification provisions to protect against any legal repercussions from the use of trademarks or publicity statements.

Publicity and trademark use provisions can be powerful tools in a legal agreement, offering enhanced brand visibility, credibility, and market penetration. However, they must be handled with care, considering the scope, quality control, duration, approval, and indemnification issues that may arise.

January 25, 2023 Contracts

Warranties in technology agreements: the basics

warranties technology agreements

Warranties in technology agreements can be a crucial component of a technology transaction. They provide a level of protection for both the service provider and the customer, ensuring that the services being provided meet certain standards and that any issues that may arise will be addressed in a timely and satisfactory manner.

There are two main types of warranties that are typically included in technology services agreements: express warranties and implied warranties. Express warranties are those that are explicitly stated in the agreement, while implied warranties are those that are assumed to be in place even if they are not explicitly stated.

Express warranties can include things like a guarantee that the services provided will meet certain performance standards or that certain features will be available. For example, a service provider may include a warranty that their software will have a certain uptime percentage or that their hardware will be free from defects.

Implied warranties, on the other hand, are more general and are assumed to be in place even if they are not explicitly stated. These can include things like a warranty of merchantability (meaning that the services will do what they purport to do) and a warranty of fitness for a particular purpose (meaning that the services provided will meet the specific needs of the customer).

It’s important to note that warranties can be given limitations. A service provider may disclaim implied warranties. Warranties may have time limits, meaning that they will only be in effect for a certain period of time after the services are provided. And a contract can provide that certain remedies (e.g., repair or replacement) serve as the exclusive remedy for the breach of a warranty.

Warranties are an important aspect of technology services agreements and provide a level of protection for both the service provider and the customer. Knowing the types of warranties that are typically included and understanding the scope of the warranties and any limitations or exclusions that may apply is crucial when reviewing and signing a technology services agreement.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.

January 19, 2023 Contracts

Why are API access agreements important?

Twitter has been in the news lately for what some seem to imply has been a problematic termination of third-party developers from its platform. This is a good occasion to talk about API access agreements in general, what they should cover, and why they are important.

An API (Application Programming Interface) access agreement is a legal document that outlines the terms and conditions under which a third-party developer can access and use an API. These agreements are important because they ensure that the API owner maintains control over their system and that the third-party developer understands and agrees to the terms and conditions of use.

System security and stability

One of the key provisions in an API access agreement relates to security. As APIs are used to access sensitive data and perform critical functions, it is essential that the API is protected from unauthorized access and misuse. The API owner should set strict security requirements for the third-party developer, such as data encryption and authentication protocols, to ensure that the API is used in a secure manner. The API owner may also wish to set limits on how often calls can be made to the API, so that the system is not overloaded or otherwise subject to diminished performance.

Intellectual property protection

Another key provision in an API access agreement relates to copyright. The API owner should have the right to control the use of their API, including the right to limit the third-party developer’s use of the API as needed to protect intellectual property rights. The API owner should also ensure that the third-party developer agrees not to copy, distribute, or otherwise use the API in a manner that is outside of an agreed scope.

These are contracts

API access agreements are contracts, and as such, they are legally binding. The API owner must be able to maintain control of its system for the system to function properly. This means that the API owner should have the right to revoke access to the API if the third-party developer breaches the terms of the agreement or if the API is being used in a manner that is not in compliance with the agreement.

Avoiding problems with termination

When terminating access to an API, the provider can treat a third-party developer fairly by providing adequate notice and a clear explanation for the termination. The developer should also negotiate for a reasonable amount of time to transition to an alternative solution or to retrieve any data it has stored within the API. Additionally, the provider may wish to make a good faith effort to assist the developer in finding a suitable alternative solution. If the termination is due to a breach of the API access agreement, the provider may provide the developer with specific details about the breach and allow for an opportunity for the developer to cure the breach before terminating access. A developer should also consider trying to negotiate a provision that says it is entitled to compensation from the developer for any losses or damages incurred as a result of an improper termination. Overall, the provider should approach the termination process in a fair, transparent and reasonable manner, taking into account the developer’s business needs and interest.

API access agreements are an essential part of the API ecosystem. They help ensure that the API owner maintains control over its system, that the third-party developer understands and agrees to the terms and conditions of use, and that the API is used in a secure and compliant manner. It is important that the parties understand the key provisions in an API access agreement and seek to comply with them in order to use the API successfully.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.

January 18, 2023 Contracts, Licensing

Why are limitation of liability provisions important in technology agreements?

liability cap

Limitations of liability are an important aspect of any technology agreement, as they help to define and limit the amount of financial responsibility that each party in the agreement must accept in the event of a dispute or legal action.

Caps

One of the main limitations of liability in a technology agreement is the cap on the amount damages. This means that even if a party is found to be at fault in a dispute, the maximum amount of financial responsibility that it is willing to accept is limited to a specific dollar amount. For example, a technology company may agree to a cap on damages of $1 million in the event of a legal dispute. Or it could agree that the maximum amount it would have to pay would be whatever its insurance will cover. It is important to note that while damages caps can provide predictability and stability in terms of financial exposure, they can also limit the recovery of a party that has suffered significant losses. So they should be negotiated thoughtfully.

Exclusions

Another limitation of liability in a technology agreement is the exclusion of certain types of damages. This means that even if a party is found to be at fault, they are not responsible for certain types of losses or damages. For example, a technology company may exclude consequential damages, such as lost profits or loss of business, in the event of a legal dispute.

Carveouts

Though a limitation of liability provision may call for a damages cap or an exclusion of the types of damages available, parties recognize that in certain situations, damages should not be limited. For example, a breach of confidentiality by one party may be particularly harmful to the other party, and thus it would be unfair to cap the amount of damages. Another example arises in the context of indemnification. If one party is obligated to pick up the tab because the other party got sued for what the indemnifying party did, then the indemnified party will want to make sure it is made whole, regardless of what the damages are. In situations such as these, the parties may negotiate a “carveout” from the damages cap or exclusion, and agree that if something occurs within a defined set of circumstances, the liability caps or exclusions will not apply.

Limitations on limitations

It is important to keep in mind that limitations of liability are subject to legal interpretation and may not be enforceable in all jurisdictions. They can be evaluated and interpreted by courts in different ways. Additionally, some courts may hold that a limitation of liability clause is unenforceable if it is found to be unconscionable or against public policy.

Tough negotiation

In many technology transactions, the limitation of liability provision is among the last remaining issues to negotiate. This fact underscores how important such provisions are in making a particular transaction palatable to a party. A particular vendor may not be willing to “bet the company” on a particular deal (i.e., would not want to risk everything if something goes wrong). So these sorts of provisions are useful in giving parties comfort to enter into a deal.

Evan Brown is a technology attorney in Chicago. Follow him on Twitter: @internetcases

January 11, 2023 Contracts, Licensing

Why are indemnification provisions important in technology contracts?

vicarious liability copyright

Indemnification provisions in technology agreements play a crucial role in protecting the parties involved in a technology transaction. These provisions are often included in agreements among technology vendors, customers, software developers, and other related parties to shift the risk of losses and legal liabilities from one party to another.

Picking up the tab

Indemnification is a legal concept that involves one party (the indemnitor) agreeing to compensate the other party (the indemnitee) for any losses or damages that may occur as a result of a specific event or occurrence. Similarly, a provision of this sort may provide that one party will “defend” the other party by retaining counsel and paying the costs of defense in court, as those costs are incurred. In technology agreements, indemnification provisions are often used to shift the risk of losses or damages that may result from a party’s breach of contract or negligence. Customers will often seek to insist that the vendor indemnify the customer in the event a third party files a lawsuit against the customer because the technology infringes that third party’s intellectual property rights.

The main purpose of indemnification provisions in technology agreements is to protect the parties involved from potential financial losses, legal liabilities, and other costs associated with legal disputes. For example, a contract may provide that if a software developer breaches a contract and causes a loss to the client, the indemnification provision would require the developer to compensate the client for any damages.

Key elements

Indemnification provisions in technology agreements typically contain several key elements, including the types of losses or damages that will be covered, the parties that are responsible for indemnifying the other party, and the time frame for indemnification to take place. It also often covers the notification requirements, the documentation and information that should be provided in case of losses or damages, and the limitation of liability.

Another key aspect of indemnification provisions is that they are often mutual, meaning that both parties are responsible for indemnifying each other in certain situations. This can help to ensure that both parties are protected in the event of a legal dispute, and it also helps to create a balance of risk between the parties.

Why bother?

Indemnification provisions in technology agreements play a vital role in protecting the parties involved from financial losses, legal liabilities, and other costs associated with legal disputes. It’s important for both parties to understand the concept of indemnification, the purpose of these provisions, and how they are typically used in technology agreements.

Evan Brown is a technology and intellectual property attorney in Chicago. Follow him on Twitter at @internetcases.