The
Uniform Computer Information Transactions Act (UCITA) is a draft law
that seeks to bring consistent rules to software contracts and
licensing agreements.
It was created and adopted by the National Conference of
Commissioners on Uniform State Laws and was sent last July to the
legislatures of all U.S. states and territories for consideration.
But UCITA has been plagued by controversy almost since work began on
drafting it back in 1996.
Opponents - and there are many - say UCITA is too broad and gives
far too much power to software vendors.
"The simple case is that it is a bad thing for consumers of any
type, whether you are an individual or a business," says Randy Roth,
director of corporate purchasing at Principal Financial Group in Des
Moines, Iowa.
"The only organizations it is good for are the software vendors,"
Roth adds. "Don't call it UCITA, just call it the Licensor
Protection Act."
Skip Lockwood, director of Washington-based For a Competitive
Information and Technology Economy (www.4cite. org), a coalition of
end users and trade associations opposed to UCITA, agrees.
"UCITA is anticompetitive and is counter to the whole economic
model we have been currently using," he says.
'Rules of the Road'
UCITA was born out of a need to have common, legally enforceable
rules governing software contracts at a time when the Internet is
rapidly changing the way people buy and use software, explains UCITA
proponent Keith Kupferschmid, intellectual property counsel for the
Software & Information Industry Association (SIIA) in
Washington.
"UCITA sets out the rules of the road for licensing of software
products, especially in the online environment," he says.
UCITA is very similar to the Uniform Commercial Code, which
covers physical products and goods. It establishes the legal rights
of software buyers and sellers. It covers standard and
custom-developed software licenses and those that deal with online
access of software. It addresses issues such as shrink-wrapped and
online click-through licenses, warranties, transfer of ownership
rights, contract terms, disputes and vendor liability for defects.
Current laws are inadequate and open to varied interpretations in
different states, says Kupferschmid.
Also, currently there aren't uniform contract laws that apply to
custom-developed software, he says. Such issues are becoming more
important as people use the Internet to cut across state lines when
buying software, Kupferschmid adds.
"The only uniform rules out there apply to tangible goods - not
the software on a CD-ROM, but on the CD-ROM itself," Kupferschmid
says.
One of the principal concerns among opponents of UCITA is that it
automatically validates all the terms and conditions in
shrink-wrapped licenses, click-through agreements and default
clauses without giving users much course for legal redress, Lockwood
says.
"Under UCITA, those terms are just enforceable, period. It's the
law," he says.
For instance, UCITA allows software companies to avoid liability
for damage caused by defective software, even though the problems
were undisclosed to the customer at the time of purchase.
Another major concern is a provision that says users who don't
uphold software licensing agreements could have their software shut
down remotely by the manufacturer.
Other issues include provisions prohibiting the transfer of
software between companies, even in mergers and acquisitions, and
other rules that tie buyers to agreements that were disclosed only
after purchase.
The ability of each state to amend UCITA, and the fact that not
all of them may eventually enact it, also weakens its potential of
becoming a widely accepted law, critics claim.
Supporters such as the SIIA dismiss such concerns and claim that
customers remain free to negotiate their own terms with vendors.
Important provisions - such as a 15-day notice period before a
vendor can disable software, for instance - ensure consumer
protection, say SIIA officials.
Cautiously Moving Ahead
But the controversy has caused states to exercise extreme caution
as they move to enact UCITA.
The Virginia Senate was one of the first legislative bodies to
approve the act, but enactment has been deferred to July 1, 2001, to
accommodate provisions aimed at ensuring consumer protection.
Maryland also approved UCITA, and it appears to be poised to
become the first state to enact it this October.
Iowa, meanwhile, is trying to pass "bomb-shelter" legislation
that would prevent consumers in the state from the effects of UCITA.
Some states, including Hawaii and Illinois, have considered UCITA
and have decided not to move forward with it.
Although the legislation isn't expected to be ratified by every
state, it is expected to be introduced in all 50 states and
territories during the next year and a half.
Lockwood says that more discussion about UCITA will only increase
the ranks of his opposition group, 4cite.org.
"I expect I will be adding more members," he says. Definition
The Uniform Computer Information Transactions Act (UCITA) is a
draft law aimed at creating consistent rules for software licensing
and contracts.
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