UCITA and the Mirror of Erised

Richard J. Greenstone

In Harry Potter and the Sorcerer’s Stone headmaster Albus Dumbledore finds Harry Potter sitting rapt before the Mirror of Erised staring at his heart’s desire—his long-dead parents. Dumbledore gently explains to Harry that many a wizard and witch have wasted lives pining before the mirror. Dumbledore promptly banishes the mirror to a secure and mysterious place in Hogwarts thereby putting to an end Harry’s state of desire. The same fate awaits UCITA in the several states.

The Uniform Computer Information Transaction Act (UCITA) is a uniform state law scheme to control the licensing of software, multimedia products, computer data and databases, online information and other such products. UCITA began as a new article to the Uniform Commercial Code (UCC), which was co-sponsored by the National Conference of Commissioners

Mt. Diablo by Richard Greenstone, 2007

Mt. Diablo
by Richard Greenstone, 2007

on Uniform State Laws (NCCUSL) and the American Law Institute (ALI). The new article was designated Article 2B (with another great English writer seemingly predicting 2B’s future—not to be!) and patterned after Article 2 of the UCC on the sale of goods. The ALI withdrew from drafting Article 2B in 1999 due to reservations about the substance and quality of the proposed law. The NCCUSL proceeded with the project and renamed it UCITA.

Maryland (April 2000) and Virginia (March 2000) adopted UCITA. To date, other states have resisted, and in fact, three states enacted “bomb shelter” laws. “Bomb shelter” laws provide that a choice of law or choice of forum term is not enforceable. Iowa, North Carolina and West Virginia have bomb shelters.

Software licenses include provisions specifying which state’s law governs the contract. UCITA enables contracting parties to be bound by Virginia or Maryland law if a dispute arises. A consumer in a state that has not adopted UCITA could still be subject to the act as a result of these provisions. UCITA also allows choice of forum clauses. States that have enacted UCITA such as Maryland or Virginia may be chosen as the forum if a legal dispute in the contract takes place even if a party has no association with those states.

As of the end of 2002, the American Bar Association (ABA) has not taken an official position on UCITA.

UCITA has been criticized for being technically complex, ambiguous and overly broad in scope. Opponents of the act claim it is skewed to benefit software vendors and is so flawed that it should be completely re-drafted. An internal report to the ABA Board of Governors on January 30, 2002 stated UCITA, “is a very complex statute that is daunting for even knowledgeable lawyers to understand and apply.” The report recommended, “UCITA should be redrafted to make it easier to understand and use.” See http://abanet.org/leadership/ucita.pdf

Americans for Fair Electronic Commerce Transactions (AFFECT) led the nationwide opposition to UCITA since forming in 2000. AFFECT is a coalition of retail and manufacturing businesses, consumers, financial service institutions, technology professionals and libraries.

Opponents contend UCITA would undermine consumer and privacy protections. UCITA would alter software and information purchases in numerous ways. First, the software purchased would no longer belong to the buyer. UCITA makes consumers “licensees” who are bound by the terms of the contract in “shrink wrap” products or “click-on” agreements. UCITA allows restrictions on use of the product to be revealed only after purchase and also allows software publishers to change the terms of the contract after purchase. Terms may also limit the extent of use of the software. The act permits restrictions that prohibit users from criticizing or commenting publicly on the software purchased. UCITA allows a software license to say that a magazine or newspaper cannot publish a review of the software without the publisher’s permission unless a court finds this provision unenforceable.

Second, UCITA would permit invasions of privacy. UCITA allows software publishers to track and collect confidential information about personal and business activities of licensees. UCITA permits “back door” entrances in software, which potentially would make a user’s system vulnerable to hackers.

Third, software companies could ship defective products without punishment. Under the Act, software publishers could deny many warranty protections that consumers would have otherwise. UCITA allows software publishers to sell products “as is” and to disclaim liability for product defects. If a consumer brings a claim, UCITA allows a software publisher to choose a preferred jurisdiction for trial

Fourth, software could be disabled under UCITA without notifying the user directly. Publishers could remotely disable software without court approval. They would not be liable for any harm caused to the user as a result of the shut down. Terms of contract could be modified after the sale of the product by E-mail. Consumers would be bound to the new terms whether or not the E-mail was received. Necessary notices of software bugs, security problems and changes in the original agreement may be posted on the seller’s website. The consumer will be deemed to have received these notices even without personal notification under the Act. UCITA would allow software publishers to remove their product in the event usage fees are late. Since publishers have the ability to disable or remove software, they have the power to blackmail users for higher fees for usage. Id.

Lastly, UCITA threatens a user’s privileges under federal copyright laws. UCITA may threaten fair use privileges for institutions like libraries. It also restricts first sale doctrine rights that permit donation, transfer or resale of the product.

UCITA is a highly controversial proposal, which is seen in the fact that only two states have enacted it. On the face, the Act seems unfairly skewed against the consumer or user of software. UCITA seems as if it would cause more problems rather than providing bright line rules that each state could implement. UCITA may hinder competition to improve software quality. The Act would allow even defective software to be sent out into the public without any liability. If this is possible, incentives to improve software are reduced. The law of contract, the UCC, state and federal consumer laws and federal intellectual property laws currently protect consumers. Unless UCITA can be redrafted to be more user friendly, clear, and concise, a consumer may benefit more under the current laws of protection.

Due to UCITA’s many flaws and numerous blocking actions by states, UCITA should meet the same fate as the Mirror of Erised. No matter how you spell it—forward or backwards—UCITA should be banished to Erehwon—Nowhere!

This article first appeared in The Licensing Journal, July 2003.