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Tech Industry

Why UCITA is a no-brainer

Attorney Joel Wolfson explains why the proposed legislation will bring laws governing the software industry into the 21st century.

    One of the lead architects for the Uniform Computer Information Transaction Act believes the proposed legislation will bring the laws governing the software industry into the 21st century.

    Joel Wolfson, an attorney for the Washington, D.C., law firm of Blank, Rome, Comiskey & McCauley, has been involved with UCITA since its inception. When the issue first arose, he headed a Software and Information Industry Association committee charged with looking at modernizing legislation relevant to the software industry.

    UCITA, introduced three years ago, is meant to protect software developers from intellectual property theft by resolving conflicting software licensing laws that vary from state to state. Concerns over how the law is put together has prevented the legislation from passing in all but two states.

    Wolfson recently spoke with CNET about the proposed law and explained why he thinks it needs to be adopted.

    What does the software industry hope from the adoption of a uniform law?
    Unnecessary litigation currently plagues Internet sales, information sales and software sales. Those industries want the same thing that the goods manufacturers and sellers have had for 50 years under the UCC Article 2 for the sales of goods. All they are asking for is a uniform law that is not different in California or Kentucky, so that the issue of whose law controls what becomes less important.

    UCITA seems to have mobilized a coalition of diverse groups, from software engineering consortiums to bar associations. You're in support of this law. Why is there opposition?
    The opponents of UCITA want some fundamental change in the current law. But the purpose (of the proposal) is not to change the fundamental law, but to provide a uniform foundation that restates current law or sets protection better for licensees than are under current law.

    All they are asking for is a uniform law that is not different in California or Kentucky, so that the issue of whose law controls what becomes less important.
    Some of the opponents want to outlaw disclaimers of warranties that they admit are perfectly legal today. Goods manufacturers, for the most part, legally have protection. They sell goods "as is." Services are sold "as is" all the time. It wouldn't be fair that software is the one industry that can't sell things (in this manner).

    Some want to outlaw licenses completely, even though they admit that licenses are perfectly legal and have been upheld by courts and are almost universally used today. Some want to impose liability for failure to disclose defects--an obligation that is not imposed on other products by law. They want software to be the only (industry) that can be sued for just failing to disclose all known defects.

    Some want to declare reverse engineering clauses illegal even though they are perfectly legal today and recently upheld by a number of courts. This coalition wants some fundamental radical change in law. Unfortunately, that was never UCITA's mandate. Let's establish a uniform base of what is law--and then we can talk about radical changes at the next step.

    The proposed legislation seems to benefit the software industry. I'm a consumer or a business owner. Tell me how UCITA benefits me?
    The No. 1 concern of a small business--whether they are developers, buyers or retailers--is they want settled laws. No one wants to pay lawyers to litigate. UCITA's purpose is to set down a unified set of rules.

    If UCITA were to pass in a number of states, is there a chance of other industries--those outside of the technology world--to fall under the scope of the new law?
    If it turns out to state a very good licensing law, it is very possible that other industries might say, 'We want something similar--a uniform set of rules that will help us decrease our litigation risks.' But that is another whole drafting effort by those industries that say, 'Yeah I like the UCITA model, and I would like to modify it for our industry, too.'

    UCC Article 2 was a good idea for the sale of goods. The software and information industry said it could form the model for UCITA legislation. There may be other industries that think UCITA forms a solid basis for them to work from.

    UCITA is said to potentially hamper advancements in software technology--specifically with issues surrounding reverse engineering--according to software experts.

    One of the problems that all the opponents have is that the prohibition on reverse engineering occurs today--without UCITA.
    One of the problems that all the opponents have is that the prohibition on reverse engineering occurs today--without UCITA. In fact, the latest amendments specifically prohibit, for the first time in U.S. law, certain contractual restrictions on reverse engineering.

    The issue of reverse engineering, however, is really a federal issue. It is a copyright issue. If you want to change it, the way Congress did before and the way the European Commission has done in other situations, it is not in UCITA to deal with it. I don't think UCITA affects it, except by prohibiting some of the clauses that prohibit reverse engineering. If you can do it now under law, UCITA permits you to do it under the law. If reverse engineering is illegal under current law, it would still be, regardless of UCITA.

    Would UCITA make shrink-wrap and click-wrap licenses fully enforceable?
    Yes, but it was not UCITA that did that. The shrink-wrap issue is settled. Congress passed the e-sign legislation and almost every state has passed the Uniform Electronic Transactions Act (UETA). Both of these statues say a contract cannot be declared unenforceable merely because it is electronic. So e-sign and UETA settled the issue. Click-wraps are legal. Moreover, there have been two dozen cases in the last few years upholding click-wrap and shrink-wrap. In the law, if you find so many decisions going one way, that issue is settled.

    But I still hear about how UCITA could prevent consumers from using their traditional fair-use rights?
    The opponents forget that those things are occurring and perfectly legal under current law. They want to change current law to outlaw those business practices, (when) UCITA is merely an Internet and software contract process statute. It merely tells you how you create an online or shrink-wrap enforceable contract. It does not attempt to regulate the industries. It does not attempt to invalidate existing practices or law. The opponents want UCITA to do that, but that is not UCITA's job.