A controversial bill that proponents say gives predictability and uniformity to software licenses and that opponents say cedes far too much power to software vendors, has been sent to Virginia Gov. James S. Gillmore III for his expected signature, in what may be the first of a trend.
The Uniform Computer Information Transactions Act (UCITA), which covers topics such as shrink-wrapped licenses and vendor liability for defects, has been introduced in Maryland, Oklahoma and Illinois, while many other states are entertaining its adoption.
UCITA's growing phalanx of critics have issued a barrage of complaints against the statute that could, ironically, perhaps best be summarized in the words of legendary Virginian Thomas Jefferson: "The right to sell is one of the rights of property," "Nothing is ours, which another may deprive us of," "The only security of all is in a free press" and "The freedom of opinion and the reasonable maintenance of it is not a crime and ought not to occasion injury."
UCITA's long and complex journey began in 1988 as an amendment to the nationwide set of state laws governing commercial transactions, the Uniform Commercial Code (UCC). Its intent was to update the 50-year-old regulations to accommodate the world of software and the Internet.
However, the American Law Institute - one of the two organizations that handle the UCC - withdrew from the task last year after the "fundamental reforms" it called for went unheeded. The complaints leveled against UCITA boiled down to the increasing perception that the legislation contained draconian provisions to increase the profits and power of large commercial software and content publishers at the expense of smaller businesses as well as consumers.
UCITA has since been criticized by 24 state attorneys general, the U.S. Federal Trade Commission, several leading computer-industry professional societies (such as the Association for Computing Machinery and the Institute of Electrical and Electronics Engineers), several software-trade groups (such as the Independent Computer Consultants Association and the Free Software Foundation), all five leading library associations, top intellectual-property associations (including the American Intellectual Property Law Association and the Committee of Copyright and Literary Property of the Association of the Bar of the City of New York), the Motion Picture Association of America, the National Association of Broadcasters, the Newspaper Association of America and every consumer-advocacy organization that has looked at the law.
One of the key provisions in UCITA is the transformation of what is now a sale - such as buying a copy of the Windows 2000 operating-system software, or the e-book version of Stephen King's latest novel - into a lease, with the leasing party (typically the software company) dictating the terms of a nonnegotiable license. Among other consequences, this legalistic sleight-of-hand allows a potential leasor to work around pre-existing consumer-protection laws, since many of those govern buyer-seller transactions.
Previous generations of intellectual property vendors have also attempted to legally alter the purchase of their wares - books and record albums, specifically - into a lease transaction with a legally-binding contract dictating their terms. But courts have consistently struck this down. And some of UCITA's critics, such as American Law Institute member Cem Kaner, point out that such provisions within UCITA - if not UCITA itself - may eventually be struck down too. However, that could be more than a decade (and several expensive lawsuits) away.
The National Conference of Commissions on Uniform State Laws adopted UCITA in July. The conference recommends commercial code law and sends it to the 50 states for their adoption. Only a handful of states have introduced the measure.
Large businesses, theoretically, should be able to negotiate contracts with vendors that protect and exclude provisions they don't want, say UCITA supporters. In these contracts, UCITA would apply only as a default rule in areas not covered by the contract.
"Parties in particular situations are always free to
