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New Battle Brews Over UCITA, Software Licensing Terms

Some users worry that act could be cited by default in courts

July 11, 2005 12:00 PM ET

Computerworld - A new legislative battle is looming over the controversial UCITA software licensing law. But this time, it's software users, not vendors, who are poised to attack.

The push for state-by-state adoption of the Uniform Computer Information Transactions Act was abandoned nearly two years ago because of widespread opposition . But the group of software users that led that opposition has since been quietly drafting its own model software-licensing law. Its concern is that courts may use UCITA as a reference point in legal disputes, giving vendors a victory through the legal system that they couldn't gain in state legislatures.

"That battle against UCITA is still going on; it's just taken another form," said Riva Kinstlick, vice president of government relations at Prudential Financial in Newark, N.J. "People are starting to be concerned about it," said Kinstlick, who maintained that stopping UCITA wasn't enough.

"If there is a void and UCITA is the only thing to take the place of the void, this could end up being the model almost by default rather than choice," she said.

UCITA is a software licensing law that specifies terms and conditions for licensing contracts. Under the act, unless the parties agree otherwise, the default terms apply.

Its supporters argued that UCITA would provide a legal framework for online commerce. Opponents said the default rules favored vendors and created potential perils for corporate users, such as allowing vendors to knowingly ship defective products.

Virginia approved the law in 2000, and Maryland quickly followed. But opponents—especially those in the financial services industry—joined the state-by-state battle to block further adoptions.

In August 2003, the law's legislative sponsor, the Chicago-based National Conference of Commissioners on Uniform State Laws (NCCUSL), suspended efforts to win state adoption.

Alternative Options

But UCITA can still be used as a contract model, said Jean Braucher, a University of Arizona law professor who is working with Americans for Fair Electronic Commerce Transactions (AFFECT) to develop a model bill. "Eventually, we need an alternative," she said.

The model bill will be based on a set of principles AFFECT developed earlier this year. For instance, UCITA all but barred any type of reverse-engineering of a software product. But AFFECT argues in its principles that "sellers marketing to the general public should not prohibit lawful study of a product, including taking apart the product."

AFFECT's effort has drawn the interest of the Chicago-based Society for Information Management, an organization of nearly 3,000 IT professionals. Phil Zwieg, a SIM vice president, said AFFECT's efforts will be particularly helpful to smaller companies that don't have the clout or legal staff to negotiate a licensing contract.

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