ARCHIVED: Opposition to the Uniform Computer Information Transactions Act

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April 20, 2000

Albert Burstein, Chairman
New Jersey Law Revision Commission
153 Halsey Street
7th Floor
Newark, New Jersey 07101

RE: The Uniform Computer Information Transactions Act (UCITA)

Dear Mr. Burstein and Members of the Commission:

The American Association of Law Libraries (AALL) was founded in 1906 to promote and enhance the value of law libraries to the legal and public communities, to foster the profession of law librarianship, and to provide leadership in the field of legal information and information policy. Today, with 4,800 members nationwide, the Association represents law librarians and related professionals who are affiliated with a wide range of institutions: law firms; law schools; corporate legal departments; courts; and local, state and federal government agencies.

The purpose of this letter is to inform you that AALL opposes the Uniform Computer Information Transactions Act (UCITA) in its current form. Our Washington Affairs Office and our state chapters have actively participated during the legislative process in those states that are considering UCITA. There is ample evidence that UCITA is extremely controversial, given the fact that the American Law Institute withdrew from the drafting process because of objections to "substance, process, and product." The Federal Trade Commission, the National Consumer Law Center, and the Attorneys General of a majority of states are among many others who have opposed UCITA because it would impair consumers' rights and remedies.

Proponents of the legislation state that it is needed for electronic commerce and to protect software and information databases from theft. However, they have not articulated exactly which provisions of current contract or intellectual property law are deficient in protecting software and electronic information, nor how those purported deficiencies have injured the thriving technology industry. Proponents also argue that UCITA is needed to protect against the piracy of digital information and software. The Digital Millennium Copyright Act and the No Electronic Theft Act include provisions that make the piracy of digital information a criminal offense. While we agree that at some point in the future there should probably be uniform rules of the road to govern computer information transactions, we believe strongly that UCITA, as promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL), is deeply flawed and should not be enacted by any state in its current form.

We appreciate the work of your staff in documenting evidence of numerous and substantive concerns with many provisions of UCITA, as articulated in their memos to the Commission. The library community has been monitoring UCITA dating back to the NCCUSL drafting process, and it is very clear to us that even experienced practitioners disagree about how to interpret UCITA and how it would actually work in practice.

Libraries are a major stakeholder in the outcome of the debate over UCITA because we are among the largest consumers of software and fee-based electronic databases and services. I would like to briefly enumerate several of our concerns with UCITA:

First, UCITA's Section 209 validates shrink wrap and clickable licenses. Today, many software and information products are sold either in a shrink wrap package or a click-on license through the Internet. In non-negotiated contracts that would be enforcement under UCITA-notwithstanding the unconscionability testa user may agree to contract terms that restrict legitimate uses of the product under federal copyright law by the mere act of opening and downloading the software or clicking Agree.

The attached Report of the Committee on Copyright and Literary Property of the Association of the Bar of the City of New York (July 1999) fully examines UCITAs preemption provision in Sections 105(a) and (b). After noting that the Committee believes that UCITA significantly diminishes national uniformity by establishing state copyright licensing rules that overlap and sometimes conflict with federal copyright law, it concludes that,

Copyright law also seeks [t]o promote the Progress of Science and useful Arts through a system of limited protection for original works of authorship that maintains a balance between what is protected and what is reserved for the public domain and the creation of future works. The Committee believes that UCITA may upset this balance by validating mass market shrinkwrap and click licenses which prohibit fair use and other conduct permitted by copyright law.

UCITA's impact on the copyright system raises serious Supremacy Clause questions that require closer scrutiny. (page 22)

. (page 22)

Second, UCITA's Section 112 would make it easier for a researcher or librarian to enter into a license agreement in which he or she inadvertently releases valuable information rights to a publisher to the detriment of their institutions.

Third, UCITA's Sections 605 and 815 on electronic regulation of performance and electronic self-help would permit a licensor to recover its data or prevent the use of its product when a license expires. Electronic self-help would apply to applications software and electronic databases across the entire spectrum of a library's operations.

Fourth, UCITA's Section 503 validates the use of transfer restrictions in the mass market. It conflicts with normal customer expectations and with the long established first sale doctrine. This could effectively deny libraries the right to transfer legally acquired materials through interlibrary loan, or to enhance their collections through gifts and exchanges. Law firm libraries may be forced to repurchase software they already have after corporate acquisitions, mergers or restructuring. Although there is a requirement that such a provision must be conspicuous in a mass-market license, there is no equivalent requirement for standard form contracts that libraries typically use.

In conclusion, the provisions of UCITA would leave libraries with little bargaining power and few rights. While the law library community fully supports the growth of electronic commerce, we also believe that the historic balance between the interests of producers and end-users should be maintained in the electronic environment. Because UCITA tilts the balance heavily in favor of software developers and vendors, we oppose it in its current form and urge that it not be recommended for adoption in New Jersey.

Sincerely,

Mary Alice Baish
Associate Washington Affairs Representative
American Association of Law Libraries