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Groups divided on unifying e-commerce measure

Opponents and supporters of a bill aimed at unifying e-commerce laws in all 50 states will be closely watching a Virginia legislative commission as it holds a hearing next week on the controversial measure.

Opponents and supporters of a bill aimed at unifying e-commerce laws in all 50 states will be closely watching a Virginia legislative commission as it holds a hearing next week on the controversial measure.

The hearing, being convened by Virginia's Commission on Technology and Science, will be the first time a state has considered the Uniform Computer and Information Transactions Act (UCITA) since an obscure legal body signed off on the measure in late July. The bill, which would control the licensing of everything from word processing software to stock quotes, will now make its way to legislatures in all 50 states, where lawmakers will vote up or down on the proposal but cannot make changes to it.

Nearly everyone agrees that current commercial laws--drafted decades ago to cover the sale of physical goods such as toasters and cars--are inadequate when it comes to e-commerce, where "intangible" products are typically licensed. But the e-commerce world remains sharply divided as to whether UCITA is the answer.

The measure's proponents, including software companies and information providers, has strongly backed UCITA. But a vocal band of opponents--led by consumer advocates as well as groups representing the movie and recording industries--say the measure introduces radically new rules that would be harmful to e-commerce.

Both sides on the debate will be watching Virginia's legislature as it holds a hearing on the bill next Tuesday.

"No one who is outside Virginia should say 'this doesn't affect me,' " said Gail Hillebrand, senior attorney with the Consumers Union, which is opposing UCITA. "If it passes in one state there will be added pressure on other states."

The Business Software Alliance, an ardent supporter of UCITA, agrees about the significance of the first hearing.

"It will hopefully be the first victory for UCITA, and we'll be able to take it and move forward with other states," BSA spokeswoman Ann Gavin said.

So far, Virginia appears to be taking a wait-and-see position toward UCITA. "We're really just trying to get an initial update and overview to make sure people are on the same page," said Diane Horvath, director of Virginia's Joint Commission on Technology and Science. "[With] the speed at which everything was changing and the number of drafts [of UCITA] it's been hard for people to keep up," she said.

Horvath added that no legislator has voiced strong support for or opposition to the bill.

Tough road for UCITA
UCITA was passed in July by the National Conference of Commissioners on Uniform State Laws (NCCUSL), a body of about 300 law professors, retired judges, and attorneys. Commercial laws generally are under the province of state legislatures, a system that risks legal confusion when transactions are made by parties in different states. To resolve differences, NCCUSL drafts "model" uniform laws, which states are free to pass or reject.

The road to passing UCITA has been filled with its share of potholes. Last April, for instance, the American Law Institute, another legal body that helps unify state laws, withdrew support of UCITA's predecessor. Without the backing of the venerable institution, UCITA was guaranteed to face an uphill battle as it was received in each state's legislature.

What's more, half of the nation's attorneys general--including those from California, Washington, and Connecticut--have voiced strong opposition to UCITA, arguing that it would "deviate substantially" from consumer expectations.

"We are concerned that these deviations will invite overreaching [changes] that will ultimately interfere with the full realization of the potential of e-commerce in our states," they wrote in a letter to NCCUSL officials.

UCITA is a sweeping measure that would set uniform guidelines for things such as "shrinkwrap" or "click" licenses, which software and Net users must acknowledge before they can legally use a product. UCITA would make those contracts enforceable in most cases, even when they limit rights that users are guaranteed under copyright and other laws. The bill would also limit the liability of software makers and information providers when their products don't perform as promised.

For its part, NCCUSL appears to have been caught off guard by the speed in which Virginia has scheduled a hearing on the bill. The organization is still editing UCITA for grammar, said NCCUSL legislative director John McCabe; and members will not decide how to lobby on the bill's behalf until January.

Although the organization typically lobbies serveral states to pass a uniform act ahead of the rest of the country, McCabe said there are no guarantees that they will use that strategy this time or that the measure will be passed by states anytime soon.

"I know this business and how chancy it is at times, and I don't have the ability to predict how long it will take [or] what other people are going to do," he said.