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UCITA: Blessing Or Curse?

Kris Ananthakrishnan
Friday, February 28, 2003
Kris Ananthakrishnan
RIGHT NOW ALL IS QUIET, AND AN UNEASY CALM prevails. But make no mistake: this war is far from over. It won’t be long before the first salvo of the year will be fired. Like all wars, this one, too, has a history. And like all wars, the outcome could profoundly affect us in some way. But, thankfully, that’s where the similarity ends. In this war, there are no guns, no missiles, and certainly no blood.

The genesis of this discord is a document innocuously titled “Article 2B,” authored initially almost a decade ago by the National Conference of Commissioners of Uniform State Laws (NCCUSL). The intent of these 300 state-appointed commissioners was to produce a proposal for a law for uniform software transactions. The outcome, unfortunately, has turned into a wrangling match between the supporters and detractors of the proposed law.

The way the proposed law was originally written, it was clear that the terms were heavily in favor of the software licensors. Among other things, it gave software publishers the right to enforce “shrinkwrap” and “clickwrap” licenses as legally binding contracts. In other words, if you clicked on the “I Accept” button when you install a software, and then find out that the software was unacceptable for whatever reason: well, you are out of luck. You just signed away any rights you had to sue the software publishers for consequential damages. No wonder practically every software industry association (including Business Software Alliance, Digital Commerce Coalition, and Silicon Valley Software Industry Coalition) lined up squarely behind the proposal.

“Outrageous!”, claimed consumer groups, IT business users, and host of advocates of the consumer rights. “How can anyone accept legally binding licensing terms even before really using the product?” they asked. “It isn’t fair to empower the software vendors at the cost of restricting the rights of consumers,” they argued. And so the battle began.

In response to all the adverse reactions, Article 2B has undergone quite a few changes and amendments in the past ten years. The name itself is not Article 2B anymore. It is now called UCITA (Uniform Computer Information Transactions Act). But what hasn’t changed is the rancorous debate that still rages over the benefits and shortcomings of the proposed law.

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