Home > Property & Casualty > Software’s End User Licensing Agreements on trial

Software’s End User Licensing Agreements on trial

Everyone has experienced the software End User Licensing Agreement (EULA) when downloading something new. They go on for pages of very small print and are unintelligible even if they were not so long. We all simply click “Agree” and move on to hopefully nothing more painful. EULAs are mostly meant as a deterrent against undue litigation and patent infringement from users. However, a federal judge in Hawaii ruled that despite the use of a EULA, a suit could proceed against software maker, NCSoft, for harms allegedly incurred by a user while playing the “Lineage II” online game. In the past, these cases have been routinely dismissed in the earliest stages mostly due to EULA defenses.

The plaintiff, Craig Smallwood, alleges that “he has suffered extreme and serious emotional distress and depression, and has been unable to function independently in usual daily activities such as getting up, getting dressed, bathing or communicating with family and friends.” While this stereotype of the unsociable prolific gamer may sound funny, it represents a significant liability exposure for computer game designers. Game makers have relied on EULAs in the past, with much success. This suit, if successful, could bring about a change in how insurers look at and rate the cost of liability insurance in this sector.

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