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One of the fiercest fights in cyberspace has ended with the death of model legislation for governing licensing of information over the Internet. The National Conference of Commissioners on Uniform State Laws announced last week that it would no longer push for state legislatures to pass its proposed rule, the Uniform Computer Information Transactions Act, or UCITA. The conference — the entity tasked by the states with drafting proposals for uniform and model laws — created UCITA in an effort to reconcile state digital commerce laws. The proposal initially was included in the Uniform Commercial Code, which covers commercial transactions. But the measure was so controversial the conference pulled it out of the code and made it a stand-alone proposal. Heavy hitters lined up on opposite sides of the proposed legislation. The software, Internet and banking industries said the new law was needed to address a legal black hole with respect to digital transactions. But consumer groups, insurance and financial institutions and various corporations argued that current laws were sufficient. “For awhile it was the vampire that wouldn’t die,” said Michael Barclay, a partner at Wilson Sonsini Goodrich & Rosati. “If it’s really dead, I’m not going to shed any tears.” The conference adopted the model law in 1999, and since then, only two states — Virginia and Maryland — have enacted the legislation. Unable to win the backing of other legislatures, conference president K. King Burnett decided to abandon the proposal. He distributed a letter to conference members Aug. 1 at the group’s annual meeting in Washington, D.C. “Clearly our efforts to find consensus and to bring all of the interested parties together has been extraordinary,” Burnett wrote. “Unfortunately in the real world, sometimes doing the right thing at the right time is not enough.” Many corporations, library associations and consumer groups have lobbied against UCITA, arguing that it would give software vendors the ability to override existing copyright laws and place greater restrictions on the use of digital information. “UCITA tilts the playing field so it favors software vendors to the detriment of users,” said Carol Ashworth, of the Americans for Fair Electronic Commerce Transactions, the national coalition opposing UCITA. Vendors could put terms in a licensing agreement “that conflict with federal law, particularly federal copyright law.” Ashworth, who is also a member of the American Library Association, said libraries were concerned that computer shrink-wrap licenses might prohibit libraries from lending or transferring products. Opponents also feared that UCITA would enable software vendors to prohibit reverse engineering — taking something apart to study how it works in order to build a competing or compatible product. States have not only rejected UCITA, they have also taken measures to block its reach. Ashworth said that under the proposed legislation a licensee in any state could designate another state’s law to govern a contract. Thus, a licensor in Oklahoma could apply the law of Virginia to its contracts. Several states have adopted so-called “bomb shelter” provisions to prohibit this. In February, the group presented a resolution supporting UCITA to the American Bar Association’s House of Delegates. But in response to requests by several ABA sections and leaders to defer debate on the issue, the conference withdrew the resolution. For many years the motion picture industry was one of the fiercest opponents of UCITA. But John McCabe, legislative director of the conference, said that once the conference revised the legislation to exclude digital licenses in the wholesale market, the Motion Picture Association of America supported it. State attorneys general and high-tech lawyers also lobbied against the legislation at one point. “It was viewed as allowing well established copyright doctrine to be abolished by contract,” Barclay said. But McCabe said another statute addressing computer information might rise in the future. “I suspect at some point in time there will be more thinking about how the law should look and there will be a statute,” McCabe said. “Nothing happens overnight with the law.”

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