Thank you for sharing!

Your article was successfully shared with the contacts you provided.
It was intended as a crucial new law for the information age, but it quickly became mired in controversy. And now the proponents of the Uniform Computer Information Transaction Act (UCITA) are engaged in a desperate final effort to save it, according to many informed observers. UCITA was promulgated in 1999 as a uniform state licensing law that would detail the rights of suppliers and users of digital data. The law’s sweep was broad, encompassing everything from software programs and Internet databases to video games, digital cameras and, according to some interpretations, any appliance that uses computer chips, including refrigerators and toasters. However, UCITA was opposed by a wide variety of consumer and business groups, as well as a majority of state attorneys general. As a result, UCITA has been adopted in only two states — Virginia and Maryland. Efforts to get it enacted elsewhere have stalled. Three states have gone so far as to adopt “bomb-shelter” laws, which exempt their residents from other states’ UCITA provisions. So on Aug. 1, the organization that drafted UCITA, the National Conference of Commissioners on Uniform State Laws, adopted 38 amendments to the act. These were “very significant, substantive changes to UCITA,” according to John McCabe, the organization’s legislative director and legal counsel. He characterized this as a “strong and good-faith effort to deal with the criticisms of UCITA.” But the amendments apparently changed few minds, and the act’s future remains doubtful. Among the substantive changes recently made in UCITA: • Protecting public comment. The revised act no longer allows software companies and other suppliers of computer information to stifle criticism from their customers. Sec. 105(c) says that any license provision limiting criticism is unenforceable. This section of UCITA might seem unnecessary, but some existing software licensing agreements have forbidden users from making unauthorized statements concerning the licensed products. “We brought a suit in February against Network Associates, which, like some other software makers, had a license agreement saying that users are prohibited from writing a review of the product or publishing the results of a benchmark test involving the software without Network Associates’ consent,” said Ken Dreifach, chief of the New York state attorney general’s Internet bureau. This suit is still pending. • Deferring to consumer protection laws. Consumer advocates have charged that UCITA removes protections that consumers enjoy under state law. So the conference of commissioners revised the act. Now, it states that applicable consumer protection law trumps UCITA when the two come into conflict. DEFERENCE TO ONLY SOME LAWS This amendment may be somewhat misleading, according to Pamela Samuelson, professor at the University of California at Berkeley’s School of Information Management and Systems. She pointed to a legislative note to this revised � 104 that indicates that UCITA does not defer to all consumer protection laws, but only to those that specifically apply to computer information transactions. “If UCITA is adopted, it will be harder for courts to apply general consumer protection laws,” she said. “The states will have to revisit their consumer protection laws and see if they should be amended to specifically apply to computer information.” Even if a state’s consumer protection laws are revised to cover computer information, they might not be applied fully. “When the courts are faced with specific standards under UCITA [say, for notice requirements] and the broader rules of consumer protection laws [which provide only for 'reasonable notice'], the courts may go with the specific standards, rather than the elastic standards that the common law has used for hundreds of years,” said Dreifach. • Allowing some reverse-engineering. UCITA had allowed software vendors to forbid all reverse-engineering of their products. Now, a new � 118 of the act ensures that users can engage in reverse-engineering, but only for the purpose of achieving interoperability. “Someone who wants to reverse-engineer a product in order to discover and protect against security risks, or to find and repair defects, will not be able to do so under UCITA contracts,” said Cem Kaner, professor of software engineering at the Florida Institute of Technology. “If UCITA had been in force before the year 2000, these clauses would have crippled the American economy because the Y2K defects that had to be repaired would never have been sufficiently investigated.” NOT FOR EDUCATIONAL PURPOSES Nor does the act protect reverse-engineering for educational purposes. Kaner fears that this aspect of UCITA would give researchers in other countries a major advantage over those in the United States; foreigners could discover how U.S. software works, while researchers in the United States couldn’t. “Which means we would be giving away the leading edge of the software industry to a country like India,” said Kaner. The United States would be committing “research suicide,” he said. • Abolishing electronic self-help. Before Aug. 1, UCITA authorized software companies to use electronic self-help measures to protect their rights. A company could legally build a back door into a user’s system and then remotely shut down that user’s software if the company believed that the software had not been paid for or that the user had otherwise breached the software licensing agreement. The conference of commissioners has now revised UCITA � 816 so that it prohibits such self-help upon license cancellation. Critics of UCITA remain suspicious, however. Although the revised UCITA does not authorize a software company to engage in electronic self-help, the statute indicates such self-help may be available under other applicable laws. This creates a confusing and troubling gap in the law, according to Kaner. SUPPORTERS AND OPPONENTS Despite the recent changes, UCITA remains likely to face an uphill battle to get approval from state legislatures around the country. The law is actively supported only by the conference of commissioners and large commercial software and Internet firms — such as Microsoft, Adobe and AOL — that are suspected of playing a large role in drafting the law. The law is actively opposed by a wide variety of groups: 32 state attorneys general (including those of California, Florida, Illinois, New Jersey, New York, Ohio and Pennsylvania); Consumer’s Union and other consumer organizations; large businesses that use commercial software (particularly insurance and financial firms); the Electronic Frontier Foundation; the American Library Association; small commercial software companies; developers and packagers of open-source software; and the Institute of Electrical and Electronics Engineers (which represents electrical engineers and computer scientists who use software for their jobs). THE ABA’S OBJECTIONS The American Bar Association has also taken a critical position on the law. On Jan. 31, a special working group of the ABA issued a scathing report on UCITA, calling it a long, complicated and poorly drafted law “that is daunting for even knowledgeable lawyers to understand and apply.” The working group’s report expressed concern that the law “would not achieve the principal objective that a uniform law is expected to achieve, namely the establishment of a high level of clarity and certainty in a particular area of the law,” but would instead create “considerable controversy and litigation over what its various rules really mean.” Carlyle Ring, chairman of the conference of commissioners’ drafting committee, has reportedly said that the Aug. 1 amendments respond positively to 10 of the 11 ABA’s specific recommendations. The amendments, however, don’t address the ABA’s major criticism, concerning the complexity and confusion of UCITA’s provisions. Only one of UCITA’s opponents has indicated that the Aug. 1 amendments have caused the organization to rethink its stance against the law. The American Committee for Interoperable Systems (ACIS), which was composed of high-tech firms such as Sun Microsystems Inc. and NCR Corp., has announced that it will no longer oppose the law, since it now allows reverse-engineering in order to obtain interoperability. The group, however, will not turn around and support the law. “We are taking no position,” said Jonathan Band, ACIS’ legal counsel and a partner in the Washington, D.C., office of Morrison & Foerster. “We [ACIS] feel the big problem we had was addressed, but we can’t support it because different companies in ACIS may take different positions on other aspects of UCITA.” PESSIMISTIC PROGNOSIS Few observers expect that the amendments will make UCITA more attractive to state legislators. “UCITA has been and remains a problematic statute,” said Mark Lemley, a law professor at the University of California at Berkeley. “I doubt that these changes will persuade the legislatures that have rejected UCITA to reconsider.” “UCITA is in a lot of trouble,” said one insider who prefers to remain anonymous. “There is a general recognition in … and outside [the conference of commissioners] that it is a mess.” And there is a widespread feeling that this is UCITA’s last chance. If it is not adopted by more states within the next 12 months, the law’s backers seem poised to throw in the towel. “If no new states adopt it by next year, there is a sense that we would reconsider where we are with UCITA,” said McCabe of the conference of commissioners. “We’d be looking at all our options.” Including the option of tossing aside UCITA and writing a new law from scratch, he confirmed. Some other experts are more categorical. “If UCITA doesn’t get adopted this time, I think it will be scrapped,” said Samuelson. She added, “If UCITA is scrapped, it will take a long time to create a new uniform state law. By that time, state courts may have provided answers to many questions the uniform law was intended to address. But if the courts come up with conflicting answers, a new uniform law might still be useful.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.