Group pulls support of software-sales rules
The American Law Institute parts ways with supporters of proposed additions to state laws governing the sale of software and digital information.
Without the support of the American Law Institute, the bill is likely to lose some of its cachet with state legislatures, whose support is crucial. Both supporters and opponents, however, said the proposal is likely to move forward.
The proposed Article 2B to the Uniform Commercial Code was designed to unify state laws covering the burgeoning sale of software and other digital products. The UCC wields tremendous influence over commercial transactions as common as setting up bank accounts and leasing real estate. Its purpose is to ensure that laws in different states do not hamper interstate commerce.
People in the computer industry generally agree that existing articles did not adequately address the licensing of software or the sale of information online. But they part ways when it comes to Article 2B. Consumer advocates said that it threatens to uphold even the most unconscionable terms in a shrinkwrap license, and some trade groups, such as the Motion Picture Association of America said the bill's breadth would be disastrous to the industry.
But other groups, such as the Business Software Alliance and the Software & Information Industry Association, said Article 2B is necessary for electronic commerce to flourish.
In order for a new article to become part of the UCC, it must receive support from the National Conference Commissioners on Uniform State Law and the American Law Institute. Once an article is passed, it travels through individual state legislatures, which generally pass the bills out of fear their states will be left behind if they don't.
But Pam Samuelson, a professor at the University of California at Berkeley who has vocally opposed 2B, said supporters will have more trouble getting the proposal passed without the support of the ALI.