Software law foes see route to harm

Regulation: Debate rages over whether licensing-agreement legislation hurts the public.

June 19, 2000|By Kevin Washington | Kevin Washington,SUN STAFF

Maryland won the national race to put a law on the books governing software transactions, but in the months since it was enacted here, opponents have vowed to make sure that no other state follows suit.

A decade in the making and debated endlessly in a host of forums, the Uniform Computer Information Transactions Act spells out what "shrink-wrap" and "click-on" software licensing agreements can say and how they can be enforced. It continues to ignite firestorms around the country.

UCITA is a model statute that the nonpartisan National Conference of Commissioners on Uniform State Laws wants every state legislature to adopt.

FOR THE RECORD - An article appearing June 19 in the Plugged In section incorrectly stated that the Federal Reserve Board supports a new computer law in Maryland aimed at regulating software transactions. The Federal Reserve has taken no position on the Uniform Computer Information Transactions Act.
The Sun regrets the error.

A diverse group of opponents, including attorneys general, consumer advocates, insurance companies, library associations, educational institutions and small businesses, has lobbied against the measure, calling it an enemy of consumers that favors large corporations.

Unlike most items that consumers or businesses buy outright, software is licensed under an agreement between the buyer and the publisher. But buyers rarely, if ever, sign such agreements - which would be legally binding under traditional law. So, software publishers want legislation that would bind consumers to those agreements merely by opening the shrink-wrap on a software box or clicking an "I agree" button on their screens when the software is installed. UCITA would make those agreements enforceable in court.

Opponents point out that some software licenses are so draconian that they prohibit buyers from publicly criticizing the software or from moving a program from one computer to another.

Supporters, including Microsoft, Adobe, America Online and the Federal Reserve, maintain that the transfer of digital products is so different from buying a carton of milk that the country needs separate rules to regulate the transactions.

While Maryland's law will take effect Oct. 1, several state legislatures - including those of Illinois, Oklahoma, Maine and Delaware - tabled the measure this year, while others postponed the introduction of the bill altogether. Iowa went even further and passed an anti-UCITA law.

And, while the law is supposed to be uniform across the country, it may not be. The Virginia legislature, which enacted UCITA before Maryland but postponed its effective date until July 2001, could have a law that's different from the legislation here once an advisory panel and lawmakers take a serious look at it in the next six months.

UCITA opponent Mary Alice Baish of the American Association of Law Libraries sees a consistent pattern outside of Maryland: "These things get looked at, then legislators learn about the controversy and table it."

John McCabe, legislative director of the National Conference of Commissioners on Uniform State Laws, disagrees. "We'll see initial efforts, like those in Maryland and Virginia, then we'll see reassessments," he said. "And we're going to find other areas where we need to make adjustments. And we'll come to a point where we can obtain a modicum of uniformity."

Maryland lawmakers amended the model statute to meet objections. The state's consumer protection laws will apply to sales of software, and consumers have the right to return software after purchase. Also, publishers can't use a click-on license to disavow the state's implied warranty law, which says programs must do what they purport to do. In addition, Maryland law will prevail in legal disputes.

Del. Kumar P. Barve, the Montgomery County Democrat who pushed Maryland's UCITA bill on the House side, called Maryland's version pro-consumer and says it establishes rules of the road for everyone. "Several smaller IT [information technology] businesses liked the idea ... that the rules are clear," he declared.

Sen. Leonard H. Teitelbaum, who chaired the Senate work committee, said UCITA and a companion package of technology bills would help Maryland stay ahead of others in attracting e-businesses. He noted that the law sets up an oversight committee that can deal with unforeseen problems.

While some opponents applaud Maryland's effort to make the law more consumer-friendly, they say it didn't go far enough.

For example, they note that it bans businesses and educators from taking apart a piece of software, a process called "reverse engineering," to make it work with other programs or to teach students how software is designed.

Attorney General J. Joseph Curran Jr. says he wants important provisions in program licenses to be more conspicuous.

And libraries and colleges fear that UCITA will usurp the "fair use" provisions of federal copyright law under which they lend books, copy portions of written work, archive an extra copy of a document and make materials available to the disabled through new technologies. Software industry officials argue that granting "fair use" exceptions to libraries and others assists in piracy, a charge the librarians dismiss as nonsense.

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