How Does Dropbox’s Terms of Service Compare to Those of Other Companies?

Last Friday, just before a holiday weekend in the U.S., Dropbox made a change to its Terms of Service. Part of the updated ToS gives Dropbox a license to use your data in ways critics believe can be interpreted too broadly. The line in question read: “You grant us (and those we work with to provide the Services) worldwide, non-exclusive, royalty-free, sublicenseable rights to use, copy, distribute, prepare derivative works (such as translations or format conversions) of, perform, or publicly display that stuff to the extent we think it necessary for the Service.”

Despite being a holiday weekend announcement, news of the ToS change spread rapidly and Dropbox quickly updated it yet again to read: “You grant us (and those we work with to provide the Services) worldwide, non-exclusive, royalty-free, sublicenseable rights to use, copy, distribute, prepare derivative works (such as translations or format conversions) of, perform, or publicly display that stuff to the extent reasonably necessary for the Service. This license is solely to enable us to technically administer, display, and operate the Services.”

But even this wording could still be cause for concern.

Much exaggeration followed the initial announcement as some worried that this meant that Dropbox “owned” your content. These worries were probably overblown, especially after the update. However, although the updated version is an improvement, it will probably still be cause for concern for many. In particular, the use of the phrase “to the extent reasonably necessary.” Musician and Positron Records owner Chris Randall notes:

But I’ll tell you what I’m right about: lawyers are not reasonable people. And the boards of large corporations aren’t reasonable people either. And these people make their living exploring the hazy area between the intent of a contract and its actual wording. And they make good livings. And they’re way, way better at reading and interpreting that intent than you or I are. Sure, DropBox is run by reasonable people. Now. What about next week when it is purchased by Yahoo. Or Google. Or the marketing company that bought MySpace?

Randall also compares the Dropbox ToS with that of some of its competitors.

Box‘s ToS (Box’s emphasis):

By registering to use the Services, you understand and acknowledge that Box.net and its contractors retain an irrevocable, royalty-free, worldwide license to use, copy, and publicly display such content for the sole purpose of providing to you the Services for which you have registered. In the event that you give Box.net the right to distribute your content, additional terms may apply to Box.net’s usage or distribution of this content. You continue to retain all ownership rights in any User Content you provide and shall remain solely responsible for your conduct, your User Content, and any material or information transmitted to other Users for interaction with other Users. Box.net does not claim any ownership rights in any User Content.

SugarSync‘s ToS (Randall’s emphasis):

After setting up your account and downloading our Software, you can select the Files you want to sync and/or store. You can change the Files you want to sync or store whenever you want. In order to make the Service available to you, we need your permission to sync and store your Files. Accordingly, you hereby grant to SugarSync a license: (i) to use, copy, transmit, distribute, store and cache Files that you choose to sync and/or store; and (ii) to copy, transmit, publish, and distribute to others the Files as you designate, whether through the sharing or public linking features of the Service, in each case solely to provide the Service to you.

Both are far more specific than even the revised Dropbox statement. Syncplicity on the other hand has a similar ToS:

While you retain all rights in any Sync Files, by using Site or Services, you hereby grant to Syncplicity a non-exclusive, worldwide, royalty-free, sublicensable, perpetual and irrevocable right and license to use and exploit such Sync Files as necessary to provide you with the Services. In addition, you hereby grant all other Syncplicity Users who you invite to access the Sync Files you indicate a non-exclusive, worldwide, royalty-free, sublicensable, perpetual and irrevocable right and license to use and exploit such Sync Files. You represent and warrant that you own or have the necessary licenses, rights, consents and permissions to grant the foregoing licenses to Syncplicity. You acknowledge and agree that your use of the Site and Services will comply with our Copyright and IP Policy as set forth in the section below titled “Copyrighted Materials: No Infringing Use”

Also, the revised ToS doesn’t address a problem author J. Daniel Sawyer pointed out. The ToS says “You must ensure you have the rights you need to grant us that permission.” Sawyer, who emphasizes that he is not a lawyer, writes:

In other words, if you put something you legally bought for your personal, non-infringing use, you’ve just been made a felon, because Dropbox now requires you to grant them worldwide license (including derivatives!), by uploading a file you didn’t author (for a personal backup or so you can have access to it on a business trip, say) you’ve just granted rights to Dropbox that you don’t own. But by uploading it, you’re representing that you do have the right to grant those rights, therefore you’re committing fraud as well as several sorts of infringement.

Dave Winer, who says he deleted his Dropbox account, also criticized the company for making the ToS change right before a holiday weekend. “Right off the bat that tells you something very bad is happening.”

This latest fiasco follows Dropbox’s recent security failure and the subsequent class-action lawsuit against the company. CRN reports that an authentication bug left all Dropbox user accounts wide open. A lawsuit filed in California alledges that Dropbox failed to properly notify users of the error.

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