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[ba-unrev-talk] NYTimes.com Article: A Battle Over Software Licensing

This article from NYTimes.com 
has been sent to you by garyrichmond@rcn.com.    (01)

A Battle Over Software Licensing    (02)

September 16, 2002
By LAURIE J. FLYNN     (03)

Aproposed law intended to standardize software licensing
from state to state has ignited a battle between its
supporters - most notably, the business software industry -
and the many forces who have joined to defeat it.     (04)

Opposition has united a strange collection of bedfellows:
librarians, information-technology managers and corporate
chief information officers, insurance and aerospace
executives, and consumer groups.     (05)

The dispute involves a dense piece of legalese that has
been scrutinized and debated for three years, although it
was first proposed nearly a decade ago. Called the Uniform
Computer Information Transactions Act, the draft law aims
to establish a single national framework for state laws
governing the information economy - laws that vary widely
around the nation.     (06)

Just as other laws apply to consumer products like cars and
groceries, the new law would help states address concerns
like warranties and licenses for packaged software that are
particular to information products.     (07)

Three years ago, a conference of lawmakers from various
states agreed to a version of the legislation, and started
circulating it for adoption by individual states. So far,
only two have passed it: Maryland and Virginia. Most of the
nation's state attorneys general oppose the legislation,
primarily because they see it as potentially overriding
various state consumer protection laws already on the
books.     (08)

One of the proposed law's main effects would be to make
binding contracts of the consumer licenses that come with
shrink-wrapped software - despite the fact the buyer often
cannot read the licensing agreement before buying and
opening the package.     (09)

According to one critic of the measure, Randy Roth, an
information-technology buyers' consultant in Des Moines,
the fight to defeat the new commercial code may very well
be the first time consumers and the insurance industry have
been on the same side of a major legislative issue.     (010)

This week, a group opposing the proposed law, Americans for
Fair Electronic Commerce Transaction, will hold its annual
planning meeting in Washington, with the goal of girding
the organization for the critical year ahead. The group
will try to devise a strategy to prevent the uniform
computer transactions act, which is known by the acronym
Ucita, from gaining ground beyond the two states that have
already adopted it.     (011)

The opponents argue that Ucita is too overreaching and
unclear and gives software companies an unfair advantage
over consumers, while giving consumers little recourse if
they buy bad software. The opposition group "has always
believed that Ucita is too broad, too complex and has too
many problems, and that it should be scrapped and
rewritten," said Carol Ashworth, who holds the title of
"Ucita grass-roots coordinator" for the American Library
Association.     (012)

The opponents contend that the software industry had far
too much influence in the writing the legislation.     (013)

"It's like having the American Medical Association write
the laws governing malpractice," said Edward Foster, a
columnist for the computer trade magazine InfoWorld, who
has been active in the fight against the proposal for the
past eight years.     (014)

Insurers are opposing the legislation because they say it
would make their heavily regulated businesses too
vulnerable to the software companies. Under the proposed
law, critics contend that software companies could disable
a customer's software for perceived violations to the
licensing agreement, or suspected piracy - essentially
bringing business to a halt.     (015)

"For us, there's more at stake because this industry is so
dependent on computer software," said John Lobert, senior
vice president for state government affairs for the
Alliance of American Insurers, an industry trade group.
"Anything that impacts how software is licensed affects the
insurance industry."     (016)

The original version of the proposed code went so far as to
let software companies electronically disable a program
that was being used in violation of its license agreement.
While that proviso was eliminated by recent amendments,
critics like Mr. Lobert say so many loopholes remain in the
statute that the amendments are almost meaningless.     (017)

Work on the proposal began in the early 1990's, after
lawyers from the National Conference of Commissioners on
Uniform State Laws determined that existing product codes
would not comfortably apply to software licensing. Not
until 1999, after countless hours of debate and testimony,
did the conference pass the information transaction act and
send it to the states.     (018)

Since then, the statute has been embroiled in debate. In
perhaps the biggest blow to the proposal, the American Bar
Association, after studying the act, declined to endorse it
and instead issued a long list of recommended amendments.
In July, the commission of legislators made 38 amendments
based on those recommendations, but opponents dismissed the
revisions as inadequate.     (019)

 To press their case, the pro-Ucita forces now intend to
lobby states to enact the legislation.     (020)

Mary Jo Dively, who was a consultant to the original
drafters of the proposal and who is now vice president and
chief counsel at Carnegie Mellon University, says that many
of Ucita's opponents may not be accustomed to doing
business within the framework of the commercial code, and
that the changes the opposition group has suggested are
unrealistic.     (021)

"The group would like to change Ucita to be vastly
different from any commercial law in effect today," she
said, "and it would have no chance of passing."     (022)

Accusations that the software industry unduly influenced
the writing of the law, or that the law is biased in its
favor, are unfounded, Ms. Dively said. "I don't think any
one entity had more input than any other," she said. "What
it does do over existing law is make it worse for the
licensor."     (023)

Ucita's backers also point out that in Maryland and
Virginia the same arguments that opposition group has put
forth were debated at length and rejected. But Mr. Roth,
one of the legislation's critics, argues that when Maryland
and Virginia passed the law, the states were hoping to ride
the tech boom of the late 1990's by making their states
more attractive to software and Internet companies.     (024)

In the meantime, opponents are preparing to do battle in
the upcoming legislative session. In their view, the stakes
are high.     (025)

"If Ucita passes in the states," said David McMahon, a
consumer affairs lawyer in Charleston, Va., and the
consumer representative on the board of the opposition
group, "anybody buying new computer software will have less
protection than when a consumer buys a cheap used car."     (026)

http://www.nytimes.com/2002/09/16/technology/16NECO.html?ex=1033183596&ei=1&en=caa3b79af92c7b61    (027)

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