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What Is UCITA?

What's Wrong With UCITA?

UCITA is poorly drafted. It is long, confusing, and unnecessarily complex. Instead of providing greater predictability in the law governing computer information transactions, as proponents claim, UCITA will create more uncertainty.

UCITA is biased in favor of the software industry. Numerous provisions in UCITA change current law to the detriment of individual consumers and business and institutional users of software. For example, UCITA will:

expressly authorize a software publisher, in a dispute over license rights, to remotely shut down an organization's mission-critical software without court approval -- in many cases shielding the software publisher from liability for the harm caused

make it very difficult to challenge unfair or one-sided provisions in "shrink-wrap" and "click-on" agreements (such as clauses prohibiting public criticism of the licensed software, or requiring the end user to litigate disputes in the courts of a distant state or country)

make it easier for software publishers and access providers to avoid being sued for breach of contract

allow the service provider in an access or maintenance contract to change the terms of the contract unilaterally by posting the changes somewhere on its Web site

make it easier for a software publisher to claim that an end-user organization is required to pay additional license fees to continue using the licensed software after a period of initial use

make it easier for a software publisher to leave the end user holding the bag if the licensed software infringes on a third party's intellectual property rights

UCITA will increase the cost of doing business for organizations that make significant use of software and other technologies. Among other things, it is anticipated that UCITA will result in higher asset management, legal and contract negotiation costs.

UCITA upsets the copyright law's careful balance between the interest of the public in the free flow of information and the protection of the rights of creators of software programs and other computer information. This has led researchers, librarians and legal scholars to oppose UCITA.

Unlike other uniform laws (such as UETA), UCITA does not reflect the consensus of the interested parties involved in the drafting process and therefore is highly controversial. To make it less controversial, states that choose to enact UCITA will likely amend it in various ways, destroying the goal of 50-state uniformity. This will make end users subject to a confusing maze of potentially 50 different sets of rules, depending on which state's law is designated as the "governing law" in a particular agreement.

You Should Also Know That...

Claims by supporters that UCITA is pro-consumer are untrue. UCITA is opposed by every consumer group that has taken a position on UCITA, and has been criticized on consumer grounds by the Federal Trade Commission and the attorneys general of 26 states.

Claims that UCITA will attract high-tech business to an enacting state have little or no basis in reality. A high-tech business such as a software company does not need to move to a state that has enacted UCITA in order to take advantage of that state's enactment of UCITA. For example, a California software company can remain in California and simply designate the law of Maryland (the first state where UCITA has taken effect) as the governing law in its "click-on", "shrink-wrap" and other standard form contracts.

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