Controversial Act Would Give Software Licensors Broad Powers.

By Rachel Chalmers At its annual meeting starting today, July 23 1999, the little- known National Conference of Commissioners for Uniform State Laws (NCCUSL) will consider a controversial law that could have a tremendous impact on software licensing in the USA. The Uniform Computer Information Transactions Act (UCITA) was intended to clarify the difficult legal territory where judges adjudicating between software vendors and consumers must decide whether they are ruling on state or federal laws on intellectual property or consumer protection. But critics say software vendors have had too much input into UCITA, and that the law as it stands is unfair to software users.

The Bureau of Consumer Protection, part of the Federal Trade Commission, has written to the chair of the executive committee of the NCCUSL to express its concerns over UCITA. The Bureau worries that UCITA will entitle software licensors to limit or control how their licensees use their software, even where that software has been mass-marketed to consumers. It observes that UCITA departs from an established principle of consumer protection - that terms must be disclosed before the transaction is completed. That means software vendors could defer disclosing software licensing restrictions until after the consumer has opened the box - the problem of the so-called "shrinkwrapped license". The Bureau warns the NCCUSL that in its efforts to establish a legal framework for software licensing, UCITA allocates unfair risks to software customers. The Act expands the scope and power of the contracts designed by software vendors and other intellectual property owners.

Another set of objections to UCITA was outlined by the Association for Computing Machinery (ACM), an association of computing professionals with 80,000 members in industry, academia and government. In a letter of her own to the NCCUSL, ACM president Barbara Simons says UCITA may put user interface errors in the same category as errors in a newspaper article, making it too easy for software publishers to avoid the legal consequences of selling defective software. "Perhaps this is appropriate for some defects," Simons writes, "but not for the ones the publisher knew about when it sold the product... By reducing the responsibility of software publishers to detect and eliminate problems before the product is released to the public, UCITA will result in the lowering of standards in our profession."

The ACM also fears that UCITA will threaten normal engineering activities, and particularly reverse engineering, by allowing publishers to ban the technique through contractual-use restrictions. "Reverse engineering is a time-honored, legal procedure that allows consumers and technologists to examine software for security defects, fix dangerous flaws and develop interoperability with other software," explained Eugene Spafford, a member of the ACM's US Public Policy Committee. "UCITA would allow vendors to prohibit or severely restrict these activities, thus increasing the risks to the public from buggy software, computer viruses and other all-too-common software problems."

If in spite of these objections, the NCCUSL annual meeting approves UCITA, the proposal will be introduced into individual state legislatures for voting. It won't necessarily be adopted immediately by all 50 states - the speed at which the legislatures adopt NCCUSL-approved uniform laws varies from state to state. But activists fear that even if only a handful of states give UCITA the green light, the software vendors will consider it a validation of shrinkwrapped licenses and a mandate to extend their power.