Who owns your software?
New state laws governing software licensing are opposed by a broad coalition
By Doug Harper -- Industrial Distribution, 10/1/2001
It's unusual when a piece of legislation is so controversial that it's opposed by as wide a coalition of allies as Ralph Nader, the Attorneys General of 24 states, the Assn. of Research Libraries, the Federal Trade Commission, Consumers Union, and the Newspaper Assn. of America.
But that's the case with legislation that applies to computer software, multimedia products, computer data and online information. The law in question is the Uniform Computer Information Transactions Act. It was approved in 1999 at the annual meeting of the National Conference of Commissioners on Uniform State Laws and could have serious implications for business and individual software users.
The NCCUSL is a body of over 300 commissioners appointed by their states and charged with creating uniform state contract law statutes. It has no connection with the federal government or the U.S. Congress and its laws are promulgated solely to be used by the states.
UCITA, a so-called "cyberspace commercial statute," was designed to create a uniform commercial contract law for computer software and other products.
Forwarded to all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands for possible enactment, UCITA will become law in each state where it is ratified by that state's legislature. But as recently as a few months ago only a handful of states, including Maryland and Virginia, have adopted UCITA.
The legislation's key provision and the one critics are most strenuously opposing, deals with the ownership of software which has historically been considered a legal "purchase." Under UCITA, the purchase is defined as a "lease." And because the products are leased, the leasing party, i.e. software publishers, is able to dictate the terms of a non-negotiable license. Critics contend that redefining purchases as leases allows software companies to by-pass consumer protection laws which currently only govern buyer-seller transactions. As a result, opponents say the law would give consumers significantly less protection against poorly designed or otherwise flawed software than do current laws.
Another provision nearly as controversial as the leasing provision is "Section 816" of the Act. This permits software vendors to place disabling codes in software — codes that can be activated remotely to deny customers' use of the product if they don't strictly adhere to the terms of the lease.
But UCITA also has its supporters, who claim the law is necessary because it gives predictability and uniformity to software licenses. Its proponents also maintain that UCITA is a vital improvement in commercial contract law and is designed to bring uniformity to software licensing contracts and a common standard for software licenses in all 50 states.
However, UCITA's numerous and vocal opponents are encouraged because, in the past, other vendors of "intellectual property," including book and record companies, have attempted to change the purchase of their products into similar lease arrangements accompanied by contracts dictating the terms of their use. But these lease arrangements have been struck down by the courts and UCITA critics are cautiously optimistic that the same future awaits this legislation.
But before your vendor switches off your e-mail software, send your comments and/or suggestions to harper.d@att.net.

















View All Blogs

