Laatz v. Zazzle, Inc.
- Beth Freeman
- 5:22-cv-04844
- U.S. District Court · Northern District of California
- 20
In Laatz v. Zazzle, Judge Freeman granted in part and denied in part Laatz’s partial summary-judgment motion involving font licensing, fraud, contract, and copyright claims.
Nicky Laatz, Zazzle, Inc., and Mohamed Mr. Alkhatib; the ruling determines some contract-assent issues but leaves the contract-breach, fraud, and copyright issues unresolved on this motion.
What happened
In Laatz v. Zazzle, Nicky Laatz claimed that Zazzle and Mohamed Mr. Alkhatib obtained a license for her fonts and then used them beyond the license’s limits. She sued for breach of contract, three types of fraud, copyright infringement, and trademark infringement.
Laatz sought partial summary judgment on every claim except trademark infringement. The court ruled that Zazzle and Mr. Alkhatib agreed to Creative Market’s service terms and license terms, but Laatz did not establish that the shop page or license FAQ was part of the contract. The court denied summary judgment on the alleged contract breach, all three fraud claims, and the copyright claim.
Judge Beth Labson Freeman granted in part and denied in part Laatz’s motion. The court granted it only on the issue of assent to the service and license terms, and otherwise denied it, including as to the contract claim against Mr. Alkhatib.
The detailed version
- Laatz v. Zazzle, Inc. · No. 5:22-cv-04844
- Beth Freeman
- Oct. 23, 2023
Background
Nicky Laatz created the Blooming Elegant Trio of fonts and the software used to implement them. She offered licenses through Creative Market. In May 2017, Mohamed Mr. Alkhatib, a Zazzle senior network engineer, bought a license through Creative Market on Zazzle’s behalf and downloaded the software for Zazzle. Zazzle stored the software on its servers and allowed users to use the fonts through its online design tool without independently obtaining the font software.
Laatz alleged that Zazzle and Mr. Alkhatib fraudulently obtained the license and violated it by making the fonts available to Zazzle users, including for commercial use. Her amended complaint asserted fraudulent misrepresentation, fraudulent concealment, promissory fraud, copyright infringement, trademark infringement, and breach of contract. Her motion sought partial summary judgment on all claims except trademark infringement.
Evidentiary objections
The court granted some objections and denied others. It struck evidence that it considered compromise negotiations, excluded hearsay and portions of declarations containing legal argument or conclusions, excluded an undisclosed expert’s declaration, and limited the use of certain exhibits. The court otherwise declined to exclude several challenged statements and exhibits.
Contract claim
The court held that Defendants assented to Creative Market’s Service Terms because the account-creation page linked to those terms and required the user to click the account-creation button. The Service Terms expressly incorporated the License Terms, so the court also held that Defendants assented to the License Terms. The court did not find that Laatz established that the Shop Page or License FAQ formed part of the contract. The Shop Page’s link to the FAQ was not sufficiently conspicuous, and the court found no adequate showing that a post-purchase link in the receipt established assent to the FAQ.
The court nevertheless declined to find that Defendants breached the License Terms as a matter of law. The evidence showed that Mr. Alkhatib purchased and downloaded the software, Zazzle used at least two servers, and Zazzle did not display, distribute, or share the font software with users. But the court found that the record lacked enough technical context to establish a breach. The court also found disputed facts about whether Mr. Alkhatib was a disclosed agent of Zazzle and therefore denied summary judgment on Laatz’s contract claim against him.
Fraud claims
The court denied summary judgment on Laatz’s claims for fraudulent misrepresentation, fraudulent concealment, and promissory fraud. It found substantial factual disputes about the required elements, including whether anyone at Zazzle knew about an earlier inquiry concerning a perpetual server-based license and whether anyone understood Laatz’s failure to respond to that inquiry in the way Laatz alleged. The court concluded that Laatz had not established, at minimum, Defendants’ intent to defraud, an element required for each fraud claim.
Copyright claim
The court denied summary judgment on the copyright-infringement claim. Although Laatz had copyright-registration certificates, Zazzle presented expert evidence that her use of FontLab 7.1 did not create original computer software. Laatz presented conflicting expert testimony supporting copyrightability. Because the expert evidence conflicted, the court could not conclude as a matter of law that Laatz’s copyrights were valid or that no material factual dispute existed.
Disposition
The court ordered:
- Laatz’s motion for partial summary judgment on the breach-of-contract claim was granted in part as to whether Defendants demonstrated mutual assent to the Service Terms and License Terms, and otherwise denied, including as to the claim against Mr. Alkhatib based on his alleged status as an undisclosed agent.
- Laatz’s motion for partial summary judgment on the fraudulent-misrepresentation, fraudulent-concealment, and promissory-fraud claims was denied.
- Laatz’s motion for partial summary judgment on the copyright-infringement claim was denied.
The court stated that it was not deciding Defendants’ arguments concerning the statute of limitations, standing, or preemption in this decision.
Read the full 20-page opinion on CourtListener, the free public archive maintained by the Free Law Project.