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Virginia Libraries

Current editors:
Beth DeFrancis defrancb@georgetown.edu, Editor
John Connolly jpconnolly@crimson.ua.edu, Assistant Editor

April/May/June 2000
Volume 46, Number 2

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UCITA Enacted in Virginia

by Sarah K. Wiant

On March 14, 2000, Governor Gilmore signed Senate Bill 372 and Virginia became the first state to enact the Uniform Computer Information Transactions Act (UCITA). This controversial legislation will have a profound effect on library operations. It allows content providers to bypass many of the protections traditionally afforded by copyright law. UCITA will likely replace copyright law, becoming the central body of law governing information transactions.

UCITA is an attempt to conform state law relating to software and information licensing to a uniform national standard. Specifically, the legislation was drafted to address the problem of "shrinkwrap" software licenses, which bind consumers to their tenets as a condition of use. Often this term generically encompasses "click-on" and "active click wrap" licenses, which accompany much of the information found online. Unlike shrinkwrap licenses, which take their name from the plastic they are often printed on, clickon and active click wrap licenses exist only electronically. They typically appear on the monitor as a condition of accessing information or installing software. Most users agree to these conditions as a matter of course, without stopping to consider their restrictions. Although licenses such as these have become commonplace, some courts have hesitated to enforce them. Disparate judicial treatment of these agreements led to an attempt to standardize the law relating to them.

UCITA began as a proposed revision to the Uniform Commercial Code (UCC). Most states have adopted the UCC or some version of it, and it is generally considered the most influential source of contract law in the United States. The UCC was drafted by two groups, the American Law Institute (ALI) and the National Conference of Commissioners on Uniform State Laws (NCCUSL). If both organizations approve a revision, it is submitted to each state government for adoption. Each state then enacts the proposed section or selected provisions, and those enactments become the law of that state.

For several years, the two groups debated the merits of various proposals to cover the licensing of software and information, but were unable to agree on a solution. In May 1999, the American Law Institute withdrew its support after concluding that the UCITA approach was fatally flawed. Despite opposition from dozens of educational, library, and consumer groups, the NCCUSL ratified the model legislation in July of 1999 and sent it to the states without the endorsement of the ALI.

It is not surprising that the legislation had the strong backing of the governor and the hightechnology community in northern Virginia: more than half of the world's Internet traffic passes through Virginia. Governor Gilmore said when he signed the bill, "This increase in electronic transactions will perpetuate the Internet revolution, promote ecommerce, and foster the growth of Virginia's technology and manufacturing economics." Governor Gilmore signed the legislation into law at a special ceremony near America Online's Dulles, Virginia headquarters. UCITA enjoys strong support among large software and Internet companies. It is opposed, however, by a diverse coalition, comprised of groups such as the American Library Association, the Virginia Library Association, the American Association of Law Libraries, the Virginia Association of Law Libraries, the Special Libraries Association, newspaper and magazine publishers, Ralph Nader's Consumer Project on Technology, and industry groups such as Computer Programmers for Social Responsibility. The debate has been spirited on both sides.

Although Virginia was the first state to enact UCITA, it will not be the first state to implement it. In order to obtain the necessary votes, legislators of the General Assembly agreed to amendments delaying the effective date of the legislation until July 1, 2001. During this period, an advisory committee will be appointed, comprised of representatives from the Virginia Library Association, the Virginia Manufacturing Association, and various technology representatives. This committee will study the impact of this act on Virginia businesses, libraries, and consumers, and will report their findings before December 1, 2000. Meanwhile, Maryland has also enacted UCITA and will begin to implement it before Virginia's legislation becomes effective.

Software Licenses and Copyright Law

The Copyright Act of 1976 struck a careful balance, granting protection to authors in exchange for certain public uses of their works. UCITA enables authors and other content providers to contract around the important public uses guaranteed by copyright law. If widely enacted, UCITA will likely supersede copyright law as a practical matter for many information transactions in the digital age. UCITA is not applicable to the sale of books. However, it might apply to supplementation to a book produced on a floppy disk or CD, and will likely apply to any information accessible online or available in electronic form.

The first sale doctrine is described in Section 109 of the Copyright Act of 1976. This provision terminates the rights of the author to the work after its initial sale, and allows the new owner, such as a library, to resell, dispose of, display, and make use of newly purchased content. Many functions, such as lending, browsing, and resale, originate from this provision, and are triggered by the first sale of the work. UCITA allows authors and publishers to license their works instead of selling them. No sale occurs, and the protections afforded under the first sale doctrine never become effective.

In the absence of a sale, the right to sell or transfer licensed information remains with the author or his designee. The author of the work may impose restrictions on lending or reselling the information. Licenses last only for a finite period, driving costs higher as libraries repeatedly pay for the same information. The archival function of libraries will be severely curtailed: the expiration of the license will terminate access to the information, and any right to make archival copies will likely be limited by the terms of the license.

In the absence of copyright exemptions, consumers will have to bargain and pay a premium for the protections previously afforded under the 1976 Act. Even core values such as fair use are threatened by UCITA. The advent of clickthrough licenses allows vendors to condition access to information on acceptance of the terms of an agreement. To access information, endusers may have to agree that they will not reproduce, review, or critique ckthe material. Although fair use would remain a defense to any copyright claim, the publisher would prevail on any claim based on the contract, rendering the copyright defense moot. Although UCITA does address the issue of fair use, its provisions seem to conflict with federal law. Until these provisions are reconciled, the extent to which fair use applies to UCITA transactions is in question.

Beyond Copyright

The UCITA language will affect more than Copyright Law, however. It will fundamentally change the way consumers interact with software and information vendors. This will have a profound effect on the way you do your job and conduct your affairs. Several provisions of UCITA illustrate how this legislation reshapes the relationship between information consumers and information vendors.

o Section 59.1503.4 of the Virginia Act allows vendors to unilaterally modify the terms of a contract during its operation. Such a modification is accepted by the continued use of the software or information. Courts will enforce the modified contract unless it is "manifestly unreasonable."

o Section 59.1506.11(b) states that the occasional failure to provide service does not constitute a breach of contract. This leaves libraries and other subscribers to online databases without a remedy when online providers are inaccessible to their patrons.

o Section 59.1504 immunizes software and information providers from liability when the software they provide is "flawed" or "buggy." Other sections afford similar protection when the documentation is inadequate or incorrect.

o Section 59.1508.15(b) is known as the selfhelp provision. It allows software or content providers to remotely disable your software if they have reason to believe that you are in violation of your license agreement. The Virginia statute requires that providers notify offenders forty-five days before this remedy is effected.

o Finally, UCITA legitimizes email, recognizing communications by this method for the purposes of contracting and legal notice. While this is a laudable goal, the statute falls short by failing to require that the addressee actually read the message. Electronic mail notification is recognized if the message is properly addressed and received. Messages thwarted by full inboxes or buggy email are just as effective as messages properly delivered.

UCITA is being actively considered in DC and Delaware. Maryland is the second state to enact it, and will be the first state to implement it. UCITA will have a substantial effect on the way Virginia libraries conduct their operations. Librarians should inform themselves about these issues and work with the delegates to the study commission to amend the statute before it becomes effective July 1, 2001.

UCITA Information Online

Virginia's version of UCITA is available online at http://leg1.state.va.us/cgibin/legp504.exe?001+ful+SB372ER. Many other websites provide useful information and commentary about the merits of the UCITA proposal:

4CITE
http://www.4cite.org
Comments from business, library, and consumer groups opposed to UCITA.

Badsoftware.com
http://www.badsoftware.com
Cem Kaner's analysis of the shortcomings of UCITA.

UCITA Online
http://www.ucitaonline.com
Comments and information from UCITA proponents.

The National Conference of Commissioners on Uniform State Laws
http://www.law.upenn.edu/bll/ulc/ulc_frame.htm
The NCCUSL's official site for drafts of uniform and model acts, including UCITA.


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