Given the uncertain state of software engineering, the fact that nearly all software products contain flaws, and the fact that many software firms were small startups with limited resources, liability exposure was highly threatening. Indeed, many, if not most, click and shrink-wrap agreements for digital works include terms that severely limit liability.
So, history explains to some extent the use of the license model in software, and licensing seems a logical way to arrange for access also to a centrally owned and managed database.
But, there are broader reasons why content providers are eager to strengthen the legal framework for licensing of consumer information products. License-based marketing of digital works, coupled with increasingly sophisticated technologies that allow contractual terms to be enforced remotely, promise for providers highly controllable and potentially highly profitable new business models.
Some of these business models depend on being able to limit or prohibit particular uses of a product. UCITA offers a way to enforce those limitations on uses that, otherwise, might be perfectly legal. A final point. The previous message illustrated some instances in which courts have held that these non- negotiable license agreements are valid. The answer is that the court decisions indicate a trend towards enforcement of these licenses, but it will not be settled on a nation-wide basis without more years of state-by-state litigation over some basic questions: What terms are enforceable?
How clear and understandable do the terms have to be? Who may be held accountable? For example, has a minor installing a computer game on his or her home computer entered into a binding agreement? In other words, even if the trend in the courts toward enforcing these contracts were to continue, it would take a long time to settle the state of the law. Furthermore, because courts are interpreting state contract law, it is very likely that the answers would be different in each state.
Vendors selling digital products in a national market argue that they would be faced with a "crazy-quilt" of rules throughout the states. UCITA proponents intend to prevent that scenario. American Library Association 50 E. A software license includes a provision that specifies which law governs the contract. UCITA to govern a software or access contract entered into by residents and businesses anywhere in the country. This means that a business or consumer in a state that has not passed UCITA could still be subject to it.
In the case of "shrink-wrap" or "click-wrap" licenses, the licensor unilaterally determines the terms and could include such a term regardless of whether the licensor or the licensee have any relationship to Virginia or Maryland. UCITA also broadly allows choice of forum clauses that might choose Virginia or Maryland as the state where any litigation or arbitration regarding a dispute in the contract would take place.
Consequently, some states have developed "defensive legislation" to protect their residents. Iowa, West Virginia and North Carolina have passed such laws, often referred to as "bomb-shelter laws. Although the amendments respond to many issues raised by the ABA, they do not address some important consumer protection issues.
Although an amendment related to libraries has been approved, the amendment was not originally proposed by the libraries and does not address the fundamental concerns that libraries have voiced about UCITA.
Libraries received a small concession to their concerns in an amendment, originally proposed in late , that would permit the transfer or donation of computer software to public libraries, and public elementary and secondary schools, even if the terms in a shrink-wrap contract indicate otherwise.
However, the proposed amendment would apply only to computer software that is transferred in a computer. Moreover, the drafting committee rejected library proposals that would have affirmed the primacy of federal copyright law in determining the enforceability of terms in "shrink-wrap" and "click-on" contracts. The committee's report showed either a complete misunderstanding or a misinterpretation of the library arguments regarding UCITA. The impetus for a uniform law relating to information technology transactions came from the American Bar Association ABA.
The ABA usually reviews proposed uniform laws and approves their readiness for introduction in state legislatures. The resolution was withdrawn before a vote could be taken when it became apparent that the resolution was likely to fail. Prior to the meeting, six ABA sections and two committees had considered the resolution and all failed to vote for passage. The report states that UCITA "is a very complex statute that is daunting for even knowledgeable lawyers to understand and apply.
AFFECT is a broad-based coalition of over sixty retail and manufacturing businesses, consumers, financial services institutions, technology professionals and libraries.
Libraries and other UCITA opponents are concerned that certain proposed amendments to UCC Article 1 and Article 2, if adopted, would create changes to the law that would negatively impact business and consumer transactions and create fertile ground for a renewed interest in UCITA in the future.
Libraries will continue to join with their partners in AFFECT to oppose the adoption of these proposed amendments in state legislatures. Copyright Statement. View our Feedback Form.
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