September - October 2001

UCITA Stalls, Giving Opponents Hope

By Chris McManes

After a quick start in 2000, state action on the Uniform Computer Information Transaction Act (UCITA) has stalled this year, and that's good news for IEEE-USA.

In 1999, the National Conference of Commissioners on Uniform State Laws (NCCUSL) developed UCITA as a draft model law that would regulate transactions in intangible goods such as computer software, online databases and other information products in digital form. The complex 344-page model law attempts to modernize the laws that govern commerce in each of the 50 U.S. states, many of which are outdated when it comes to regulating information technology.

Maryland and Virginia signed amended UCITA legislation into law in 2000. This year, 18 other jurisdictions either considered or introduced UCITA: Arizona, Delaware, Florida, Georgia, Hawaii, Illinois, Kansas, Louisiana, Oklahoma, Texas, Maine, New Hampshire, Oregon, Rhode Island, Wisconsin, Washington, New Jersey and the District of Columbia. It didn't pass anywhere. On the other hand, Iowa, West Virginia and North Carolina adopted "bomb shelter" legislation, which bars enforcement of UCITA laws approved in another state.

"The trend has been stopped," said Dan Fisher, a member of IEEE-USA's Intellectual Property Committee who drafted approved amendments to UCITA legislation in Maryland and Virginia. "I'm pleased, but I think we've got to repeal it in those two states. I think it's fatally flawed."

Software industry trade groups and computer heavyweights such as  Compaq, AOL and Microsoft favor UCITA legislation. IEEE-USA is joined in its opposition to UCITA by 26 state Attorneys General, the insurance industry, libraries, consumer protection groups, and large technology users, including Boeing and Phillips Petroleum. While the opposing camps agree that new laws are needed to govern computer information transactions, opponents argue that UCITA provides unusual advantages to those who sell or lease software, while crippling consumer rights.

"UCITA proponents were well organized early, and were able to convince Virginia and Maryland legislators to pass their legislation rather than be characterized as 'high-tech unfriendly,'" IEEE-USA President Ned Sauthoff said. "But as soon as state legislators started hearing from both sides, it became obvious to them that UCITA was not a clear-cut issue, and that there are many fundamental consumer rights concerns that need to be addressed."

IEEE-USA opposes UCITA for many reasons. Among them are concerns that UCITA would make legally enforceable license provisions allowing software makers to remotely turn off computer programs in a contract dispute; prohibit legal reverse engineering of software to promote the advancement of scientific learning, technological improvement and the public interest; ban an individual from publishing an unfavorable review of a software program; and relieve software vendors of liability for selling software with significant known defects.

IEEE-USA formalized its opposition to UCITA in a February 2000 position statement.

Fears of a UCITA steamroller have faded as IEEE-USA and others have worked to raise the awareness of state legislators about the law's fundamental problems. The American Bar Association (ABA) considered a proposal to oppose UCITA in August, but instead formed a committee to evaluate the law. NCCUSL agreed to suspend efforts to pass the legislation in any state until the ABA's recommendations could be considered.

NCCUSL's UCITA Standby Committee has proposed a meeting to consider amendments and "to address concerns and reach consensus among all interested groups." That meeting is tentatively set for Washington on 16 - 18 November in Washington, D.C.

"The failure of UCITA proponents to secure passage in any
state so far this year, coupled with the ABA's decision to take a critical look at UCITA, signals a dim future for the legislation, at least in its present form," Sauthoff said. "That's good news for software consumers and computer programmers."

Chris McManes is PR/Marketing Coordinator at IEEE-USA in Washington, D.C.