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Bill aims to unify state e-commerce laws

An obscure legal body has passed controversial legislation that could revamp laws governing e-commerce in all 50 states.

An obscure legal body has passed controversial legislation that could revamp laws governing e-commerce in all 50 states.

After more than three years of debate, the NCCUSL, or National Conference of Commissioners on Uniform State Laws, last week signed off on a bill designed to unify commercial laws governing the licensing of everything from software to stock quotes. Such e-commerce transactions frequently cross state lines, creating confusion about what state's laws apply.

UCITA, or the Uniform Computer Information Transaction Act, now heads to state legislatures across the country, where lawmakers can vote up or down on the measure.

But in passing the bill, NCCUSL, a body of about 300 law professors, retired judges, and attorneys, has made its share of enemies. Among them are consumer advocates and attorneys general from 25 states, who complain that the law erodes licensees rights in favor of a handful of licensors.

Whereas current uniform laws govern the sale of goods, such as cars, clothes, and appliances, UCITA would cover more "intangible" items, such as software and statistics, which usually are licensed.

UCITA would set uniform guidelines for things like ?shrinkwrap? and click licenses, which users must acknowledge before they can legally use a product. The bill also sets out the liability software makers and information providers have when their products don't perform as promised.

It has the strong backing of many large software and information companies, such as the Business Software Alliance and the Nasdaq Stock Market.

But last April, the American Law Institute dealt a serious blow to UCITA's predecessor when the venerable organization withdrew its support. Without the institute's backing, UCITA supporters are sure to face an uphill battle getting the bill passed in some states.

Critics say that far from its professed goals of promoting e-commerce and protecting consumers, UCITA will only create confusion.

"Its rules deviate substantially from long established norms of consumer expectations," 25 attorneys general recently wrote in letters to NCCUSL. "We are concerned that these deviations will invite overreaching that will ultimately interfere with the full realization of the potential of e-commerce in our states." AGs from California, Washington, and Connecticut were among the signatories.

The controversy is likely to scare away many state lawmakers, many of whom are unfamiliar with ecommerce. "An enormous amount of controversy awaits" the bill, said Gail Hillebrand, senior attorney at the nonprofit Consumers Union and a vocal opponant.

Still, said Ann Gavin, a spokeswoman for the Business Software alliance, lawmakers are often eager to attract software companies to their states, giving them an incentive to pass the measure.

"I think the more technology-friendly states would look at this as something very positive that they will want to pass," Gavin said.

There is no schedule for when UCITA will make its way to each state's legislature. One possible scenario, Hillebrand said, is that some states will pass it, while it stalls or is killed in other states. It is unclear if software and information licensors could simply make users everywhere agree to be bound by laws from states that pass it.