They probably threw it over the wall to an apathetic and clueless legal staff. Looks like Google took a server-oriented web application EULA and slapped it on Chrome.
For open source software the clause I found most odd was "10.2 You may not (and you may not permit anyone else to) copy, modify, create a derivative work of, reverse engineer, decompile or otherwise attempt to extract the source code of the Software or any part thereof, unless this is expressly permitted or required by law, or unless you have been specifically told that you may do so by Google, in writing."
The incompatibility of this is covered by clause 1.2, ". . . Open source software licences for Google Chrome source code constitute separate written agreements. To the limited extent that the open source software licences expressly supersede these Universal Terms, the open source licences govern your agreement with Google . . ."
"These Terms of Service apply to the executable code version of Google Chrome. Source code for Google Chrome is available free of charge under open source software license agreements at http://code.google.com/chromium/terms.html."
yup...just proves the suspicion: the software guys just copy/pasted some boilerplate and inserted a few specific clauses without re-reading the whole document or double-checking what it really says.
The OP is correct, though: Google has an army of lawyers and should have caught this.
Google should spend ts considerable resources coming up with a "compiler" for legal docs. You just type in s few one line sentences describing the rights you'd like to have and the compiler checks for consistency errors and then generates a legal document (probably 100 pages long) filled with all of the right "magic words".
sometimes i wonder if the executives ever read their own legal documents. i read every legal document i sign or agree to, because to not do so opens up risk. but before they're released, legal documents should be vetted by a number of people in the company, especially those who are technically inclined. it often feels like many legal docs, terms of use documents, aup's and what not are written by lawyers who really don't understand the essence of what they're doing.
and clearly, there is a class of lawyer who's testing the boundaries of intellectual property law. too little of this has been challenged and brought to court.
Perhaps the dumbest thing of all is bloggers don't actually read up before posting blogs like this particular one. One of the developers debunked the idea, he listed when the browser communicates with Google ( here: http://www.mattcutts.com/blog/google-chrome-communication/ ), and he insisted that they hold no rights in a public blog post that can be cited by any two-bit lawyer from the way-back-machine. Scandalous of them, huh?
"In order to keep things simple for our users, we try to use the same set of legal terms (our Universal Terms of Service) for many of our products. Sometimes, as in the case of Google Chrome, this means that the legal terms for a specific product may include terms that don't apply well to the use of that product. We are working quickly to remove language from Section 11 of the current Google Chrome terms of service. This change will apply retroactively to all users who have downloaded Google Chrome."
Rebecca Ward, Senior Product Counsel for Google Chrome
My guess would be that this EULA was derived from a boilerplate Google EULA with a search/replace done on it. Apparently, it's very similar to the Google Docs EULA.
Other than the limited license set forth in Section 11, Google acknowledges and agrees that it obtains no right, title or interest from you (or your licensors) under these Terms in or to any Content that you submit, post, transmit or display on, or through, the Services, including any intellectual property rights which subsist in that Content (whether those rights happen to be registered or not, and wherever in the world those rights may exist). Unless you have agreed otherwise in writing with Google, you agree that you are responsible for protecting and enforcing those rights and that Google has no obligation to do so on your behalf.
11.1 You retain copyright and any other rights you already hold in Content which you submit, post or display on or through, the Services. By submitting, posting or displaying the content you give Google a perpetual, irrevocable, worldwide, royalty-free, and non-exclusive licence to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content which you submit, post or display on or through, the Services. This licence is for the sole purpose of enabling Google to display, distribute and promote the Services and may be revoked for certain Services as defined in the Additional Terms of those Services.
Google allows you to retain copyright over your content. That's great. So if you send a copy of your manuscript to your publisher using Chrome, you technically will always be "the owner." You can still earn royalties from your content, and enter into contracts with publishers or other parties that want to license your content.
But Google will still have a "perpetual, irrevocable, worldwide, royalty-free, and non-exclusive licence to reproduce, adapt, modify, translate, publish, publicly perform, publicly display and distribute any Content which you submit, post or display on or through" the browser.
Usually, when we own rights to something, it gives us the power to do all those things without being bothered by someone else.
So in layman's terms, this essentially makes them "co-owner" of your content. They can license it to others, collect revenues (albeit not technically "royalties") from its sale, copy it at will, alter it at will. They don't have to have your permission to do any of this.
And that's just the intellectual property side. Forget about privacy with regard to your personal life or with regard to trade secrets.
They actually don't have the rights to license it to others. They're not co-owners, nor do they pretend to be, hence "You retain copyright and any other rights you already hold in Content which you submit, post or display on or through, the Services."
But their license justly protects them from being sued because you uploaded a video to YouTube that became a hit, and then you decide you want to sue them because they're hosting a video you submitted but now want to charge people for.
I guess it was just to test if anyone cares. I still don't think they will change anything because that's what they are aiming for, information control.
Settle down. It appears they just used the default EULA that comes with all their "Services". They have since realized that they need a different EULA. You'll probably see a new (retroactive) Chrome EULA come out shortly.
These are the universal terms of service that apply to all Google products: http://www.google.com/accounts/TOS. It's entirely reasonable given that it limits what they can use and it protects them against, say, Pepsi uploading a document on Google Docs then suing Google for hosting that document.
I find it oddly reassuring that companies don't pay any more attention to EULAs than users.