ARCHIVED: Lyn Warmath, Regarding the Virginia UCITA

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Statement of Lyn Warmath
Library Director, Hirschler, Fleischer, Weinberg, Cox and Allen

Before the Joint Commission on Technology and Science (JCOTS) Advisory Committee #5
June 29, 2000

on behalf of the American Association of Law Libraries and the Virginia Association of Law Libraries

RE: The Uniform Computer Information Transactions Act (UCITA)

Delegate May, thank you very much for this opportunity to appear before the JCOTS Advisory Committee #5 regarding the Virginia Uniform Computer Information Transactions Act (UCITA) that was signed by Governor Gilmore on April 9th of this year. I am Lyn Warmath, Library Director for thirteen years at Hirschler, Fleischer, Weinberg, Cox and Allen. The Virginia UCITA provides for the formation of this new technical advisory committee to JCOTS and for a report to the Governor and the General Assembly by December 1, 2000. My comments today represent the views of the American Association of Law Libraries (AALL) and the Virginia Association of Law Libraries (VALL).

Our organizations opposed the Uniform Computer Information Transactions Act as enacted in Virginia and strongly supported the amendment delaying the effective date to July 1, 2001 and providing for this additional study. We are hopeful that the Joint Commission will use this opportunity to pay special attention to the extremely controversial provisions of UCITA that continue to be opposed by a broad-based group of consumers, businesses, and library associations. We are confident that the new Advisory Committee #5 will take its charge seriously and will recommend amendments to the legislation that result in a level of agreement by all parties that was not achieved last spring.

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 federal 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 continue to believe that the approach taken in UCITA is deeply flawed.

The library community has been monitoring UCITA dating back to the drafting process by the National Conference of Commissioners on Uniform State Laws, 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 § 59.1-502.9 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 enforced under UCITA-notwithstanding the "unconscionability" test-a 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." Terms in non-negotiated contracts would restrict the ability of a library to make information available in ways permitted under federal copyright law.

The Association of the Bar of the City of New York issued its Report of the Committee on Copyright and Literary Property of the Association of the Bar of the City of New York in July 1999 that fully examined UCITA's 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.

Second, UCITA's § 59.1-506.5 and § 59.1-508.15 on electronic regulation of performance and electronic self-help permit a licensor to exercise self-help during the term of the license even for an unknowing minor infraction. Electronic self-help would apply to applications software and electronic databases across the entire spectrum of a library's operations. Let me give you an example of how this could affect work in a law firm. Suppose that LEXIS decides to exercise its self-help option on the day that the firm is obligated to abide by a pleading deadline. LEXIS unplugs the firm's life line to Shepards' Citators just when the firm needs to perform its mission-critical, last minute cite checking. LEXIS's 45-day e-mail notice to the firm was deleted when the librarian was on vacation weeks earlier. Even though the firm may have paid its bills, it could have a costly malpractice case on its hands.

Third, UCITA's § 59.1-505.3 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. An additional problem is the 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 that currently exist. 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. UCITA tilts the balance heavily in favor of software developers and vendors at the expense of consumers, including libraries. These provisions will have a negative impact on the ability of libraries in Virginia to fulfill their mission in serving the public by requiring the expenditure of additional substantial sums of money in order to comply with UCITA, and by precluding the preservation of materials in electronic format.

Therefore, the American Association of Law Libraries and the Virginia Association of Law Libraries formally request that the Advisory Committee recommend adopting the following amendment that would exclude transactions involving libraries from the scope of UCITA:

§ 59.1-501.3 SCOPE; EXCLUSIONS

 

(d) This chapter does not apply to:

 

[new sub-section] (1) A transaction made by a library or archives without any purpose of direct or indirect commercial advantage.

The above language reflects the "fair use" exemption for libraries under current federal copyright law. Libraries occupy a unique intermediary position somewhere between producer and consumer that is not recognized by UCITA, but is recognized and protected by "fair use" under federal copyright law. Preserving this exemption that carefully balances the rights of owners and users is of critical importance to all libraries in Virginia.

Thank you very much for the opportunity to appear before you today and for your serious consideration of this proposed amendment.