Not only was the sham license (like the one in this picture) on records and books invalidated. The Supreme Court also invalidated restrictive licenses on the machines (see MOTION PICTURE PATENTS CO. v. UNIVERSAL FILM MFG. CO., at 243 U.S. 502 (1917) http://supreme.justia.com/us/243/502/case.html )
These types of restrictive licenses were tried by industry after industry in the 20th century. The courts repeatedly tossed them out as incompatible with the First Sale Doctrine (copyright) or the Doctrine of Alienation (same thing, for patent) or as abuse/misuse of the copyright or patent, or as incompatible with the Fair Use Doctrine (copyright). (Google the terms for more details on these doctrines...)
It wasn't until 1995 that the courts accepted the idea of a binding mass-market copyright license (ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) at http://www.law.emory.edu/7circuit/june96/96-1139.h tml ) The primary statute written to validate this judicial stretch was the Uniform Computer Information Transactions Act, which got a lot of press but was rejected in 48/50 states (Virginia and Maryland passed it, everyone else bounced it). A replacement approach is being drafted by the American Law Institute (Principles of the Law of Software Contracts) (contact information at http://www.ali.org/ali/PP16.asp) and these Principles are unlikely to provide a blanket acceptance of all terms in the typical EULA.
Open-source enthusiasts, by contrast, are precisely the sort of people you'd like to see inspecting the voting code; they're often libertarian freaks, nuttily suspicious of centralized power, and they'd scream to the high heavens if they found anything wrong.
As one of the geeks who is nuttily and loudly suspicious of the electronic voting machines, I appreciate columnist Clive Thompson's compliment and endorsement. But I think he's missing his own point.
If 10 voting equipment vendors publish their open source (remember, "open source" is not necessarily "free") software for inspection, then for each vendor, the other 9 vendors will have a strong incentive to inspect and criticize that 10th vendor's code. ("You really should want to buy *my* voting machines . . . their code sucks. Here, let me prove it. . ..")
I predict that competing commissioned salespeople can be even more nutty, suspicious, and enthusiastic than computer science professors.
We keep reading about the yet-another-government that said "oh, dear, Microsoft is sooooo expensive, we should use Linux instead."
And then there's an item in the Wall Street Journal about someone from Microsoft striking a deal with the country's government. They get big discounts, free software, maybe some gifts for the schools, maybe even some investments or jobs.
So if you were running a poor country, why WOULDN'T you threaten to give Microsoft products the boot? It's a negotiation!
There have been about 30 published cases so far, since 1987. I cited some in the blog proposal that you're commenting on.
Do google searches on Hill v Gateway 2000, Brower v Gateway 2000, Mortenson Co. v. Timberline Software Corp., StepSaver v Wyse, and Vault v Quaid Software and you'll find the text of most of these cases.
Let me clarify some of the issues that I see raised in the comments:
1) My proposals are primarily in support of disclosure. For readers who prefer free market accountability to litigation, that's what disclosure rules support. To make rational decisions in an open market, the customer needs information to base the decisions on. The information rules that I advocate are not far from laws that currently govern traditional sales:
- The customer can see the contract before the sale and use that knowledge as a factor when comparison shopping (and the press can help customers comparison shop by publishing information about the contracts, such as warranty policies, support policies, etc.)
- The company is accountable for its claims. I'm not talking about claims like "our burgers are yummy." I'm talking about "statements of fact" (specific statements that can be proved true or false). Laws governing warranties, fraud, and deceptive trade practices make these claims enforceable in the traditional markets. If you can't hold the company to its claims, you can't know what you're buying.
- The company can't prevent mass-market customers (and reporters covering mass-market products) from publishing comparison studies and product criticisms.
- The company can't prevent mass-market customers from using reverse engineering to discover bugs and security holes, false claims, etc. (NOTE: Patent law protects the original ideas in a product, whether you reverse engineer them or not. Additionally, my proposal doesn't invalidate a restriction against using reverse engineering to help create a competiting product. It invalidates restrictions that bar people from doing non-competing things, like discovering problems, making this product interoperable with others, fixing bugs in products that a company no longer supports, etc.
- The company has to disclose its KNOWN defects. Note that failure to disclose significant defects in traditional goods can be prosecuted under the deceptive trade practices or unfair competition laws.
The next main theme is privacy/security related. These are ground rules, not litigation magnets. Don't transfer data from someone else's computer without permission, don't block their access to their own data (a trick that some companies use to force customers to renew licenses or agree to unfavorable new license terms) and don't cut off their rights to use software they've paid for without a court order.
This isn't about bugs. It's about misconduct.
Do we need to polish the language to make that distinction clear in the legislation? Of course. This is a set of principles, not legislation. The goal here is to present the ideas simply (while giving enough footnote-links to provide context for legally knowledgeable readers). Legislative precision comes after appropriate people accept the principles.
SO WHY BOTHER? WHAT'S THE POINT?
The software industry is increasingly vulnerable to regulation. Software publishers aren't creating masses of new jobs in the United States. They've made a lot of people angry, partially because they've been doing business in ways that would never be tolerated under traditional American sales law. The most visible representative of the industry is a monopoly that seems to be so greedy as to be willing to try to wipe out even the research / scientific / free-public-benefit community in order to preserve or trivially increase its market share.
When companies look like they're more about greed than about providing benefits to the country, they become vulnerable to regulatory proposals. If their business practices seem dishonest and their products cause widespread, well publicized social disruption, some legislators will introduce bills to regulate the industry. Every crisis is another opportunity for legislation.
Not necessarily good or wise legislation. If we want THAT, it's up to us to advise legislators. Otherwise, they'll do what they do and we'll complain about it later.
There is no Software Consumers' Association, but I have worked with lawyers from Ralph Nader's Consumer Project on Technology and from Consumers Union on software contract law.
When public anger with an industry rises, legislators get tempted to create laws to regulate the industry. Software publishing is particularly vulnerable because so many publishers have engaged in business practices that would be considered outrageous (and unlawful) in traditional markets AND because this is no longer a wildly expanding industry / employer in the United States.
We can lay out some principles to advise those legislators, or we can lay back, and later complain that they got it all wrong.
UETA is the uniform electronic transactions act, the primary NCCUSL bill on electronic commerce. It has screwy rules on the legal effect of e-mail (you are liable for have received e-mail that was sent to you whether you actually get it or not; whether it was deleted by a reasonably configured spam or porn filter or not; etc.) but otherwise it is thoughtfully written. This illustrates NCCUSL at its best, while UCITA illustrates NCCUSL (National Conference of Commissioners on Uniform State Laws) at its worst.
UCITA makes profound changes in the law. It says that pieces of paper that you don't see until after the sale become binding contracts, almost no matter what their terms. Yes, you've seen these overreaching pieces of papers with their ridiculous claims plenty of times. The difference is that UCITA says that they are enforceable. For example, there hasn't been a single published (or as far as I know, unpublished) court decision in this century in which the court enforced a disclaimer of implied warranties (such as the warranty of merchantability -- the product is reasonably fit for ordinary use) against a mass-market customer. I'm aware of only three approvals involving businesses and one of those was later overruled. UCITA says these are always enforceable. Even if the company refuses to let the customer see the terms until after the sale. UCITA also helps companies ban reverse engineering of their products. This is just another use restriction (like the nondisclosure restriction that UCITA explicitly lists as a use restriction -- the publisher can tell you, and some do, that you can't publish magazine reviews or benchmark results of its product). Sony just lost its reverse engineering case, giving us some hope for the DVD case. Under UCITA, the DVD case would be a sure loser from Day 1. Here's another example of the abuses that UCITA makes possible. This is an analysis of a license that I obtained from Intel. This is a utility that Intel is giving away for "free." Notice the two example users, a school and a travel agency. Neither of them is a consumer under UCITA, but the product is clearly a consumer-like product. Next, here is the license for this product. Note, 525 words down, in the section titled NEW DEVELOPMENTS, the appropriation of your intellectual property rights if you use this thing. Suppose that you create a web site for your family and use the Intel Photo Album II applet to create fancy transitions in the display of different pictures that you took of grandma with the kids. That's a work of authorship, and if this clause is enforceable, Intel now owns your site, or this portion of your site, and on some readings of this clause it appears that Intel also now own your rights to your pictures of grandma. It looks to me as though this clause is enforceable under UCITA. The unfair surprise provision that was in UCITA back in 1996 is gone. Unconscionability has almost never been used to get a business customer off the hook. And what fundamental public policy does a clause like this offend? Clearly, a clause like this is a surprise. Just as clearly, every company's lawyer should review every clickwrapped contract, because clauses like this are buried in them. Imagine putting together an internal website with private executive presentations about new products. If you use Intel's applet to make the transitions, you have just granted Intel an entitlement to some of your most valuable trade secrets. -------------------------------------------------- -------------- http://www.intel.com/home/funstuff/webapplets/albu m2/album2.htm Use the Photo Album II applet to add high-tech image transitions to your Web pages. Origami, Unseen Wind and Brush are just a few of the effects that will surprise and delight your viewers. The Photo Album II applet benefits from the power of the Intel® Pentium® III processor. As a result, performance PC users can enjoy smooth, fluid displays and fast response times. Experience the wide array of choices at the Lincoln High School Student Activity Center. Explore vacation destination options with TransWorld Travel and see the world! 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The Independent Computer Consultants Association represents independent CUSTOM programmers. After studying several versions of the UCITA proposal to let vendors shut down customers, they recommended:
(1) UCITA should BAN "self-help" (sending a shut-down message to the customer's computer)
(2) UCITA should allow a custom software developer to get an injunction against a customer (a court would shut down the customer, after hearing the facts) and require the customer to pay the developer's costs if the court granted the injunction. This makes the action affordable for the custom developer but protects the customer and the public (when you shut down a hospital's software, you don't just affect the hospital) from unreasonable shut downs.
The Society for Information Management (representing large customers) also supported this proposal even though their members would end up paying the costs of some injunctions.
The UCITA committee repeatedly rejected this proposal and variations of it.
Another issue -- my core issue -- with the self help provision is that it creates a hole in the customer's security. There is now a way for a remote party to send a message that shuts down the customer's system. The vendor/developer will be liable if IT sends that message without authorization, but what if someone else figures out how to send such messages? (e.g., a disgruntled former employee or a cracker?) The vendor has no liability in this case, and a contract provision stating that the VENDOR will never use self-help doesn't protect the customer from third parties taking advantage of the built-in shutdown routine.
UCITA encourages the adoption of this style of contract enforcement, and thus encourages the creation of new security risks for customers. There are better ways to protect developers' rights.
This right of return replaces current law, such as California's Song-Beverly Act, which says that consumers must be informed of certain terms (warranty disclaimers) BEFORE the sale. With very rare exceptions (In a careful literature review, I found only two cases this century), courts have insisted that customers (business and consumer) be given warranty disclaimers at or before the time of sale. Additionally, in about half of the United States, courts insist that customers be advised of remedy limitations.
UCITA replaces our right to notification of key terms before or at the time of sale with a right of return that says that after you have paid for the thing, taken it home, opened it up, and started to install it, if you don't like the license, you can send it back. You don't get to see the terms before the sale, for example when you are comparison shopping. Instead, after you take back the first product, you can go shopping again for something else, hope that it has better terms, pay for it, take it home, start to install IT, and if you don't like the terms, take it back. Etc., etc. This is a sick joke, not a consumer right.
One alternative proposal, from a leading member of the American Law Institute (which was co-authoring UCITA at that time), was to require publishers who sold software over the web to post the license terms at their website. The publishers protested, claiming that it is complex and difficult to post license terms at their web sites (REALLY, I'M NOT KIDDING! I WAS THERE! THEY KEPT A STRAIGHT FACE AND DIDN'T EVEN BLUSH WHEN THEY SAID THIS!)
In the face of these objections, the UCITA (then called UCC Article 2B) drafting committee refused to impose this requirement on the publishers. Shortly after that, the American Law Institute withdrew from the project, killing Article 2B as an amendment to the Uniform Commercial Code. The project was renamed UCITA and carried solely by the other sponsor, the National Conference of Commissioners on Uniform State Laws. This was the first time in 50 years that the American Law Institute has withdrawn from a joint project with the National Conference of Commissioners on Uniform State Laws.
Additionally, note that this "right of return" is available only to mass-market customers. Quite a range of software and information products (and all access contracts) bought by small businesses (including independent consultants working out of their home)are not mass-market. Those customers can refuse to accept the terms of the license, but they have no right of return, and no right to a refund, no matter how bad the terms are.
Additionally, this right of return expires as soon as you click OK to install the software. If you don't read the license while installing it, you are stuck with it.
For Immediate Release Contact: Skip Lockwood, 4CITE Coordinator, 202-257-7007 Press Conference: January 7, 2000 8:30-9:30 a.m. Virginia Capitol Building House Room 5 "The Press Room" Richmond, VA
Business and Non-Profit Coalition Urges Caution during Consideration of Legislation Affecting Software Purchasing
(Richmond, Virginia ? January 7, 2000) ? Fearing an erosion of the user rights of consumers and businesses, a coalition including Virginia business leaders and public information advocates today urged state lawmakers to cast a critical eye on a proposed new law on computer software and on-line services. The coalition, known as "For a Competitive Information and Technology Economy" or 4CITE, has been formed to oppose the Uniform Computer Information Transactions Act(UCITA).
The Joint Committee on Technology and Science of the Virginia State Legislature (JCOTS) will expected to report on UCITA today. Even though a broad range of consumer and business groups expressed opposition to UCITA before the JCOTS advisory committee, the advisory committee on Tuesday of this week favorably recommended UCITA to the full committee. Several members of the advisory committee voted against the proposal.
Opposition to the controversial proposal is mounting. 4CITE is a diverse coalition of pro-electronic commerce business and non-profit end-users and developers of computer information technology. "We support the development of high-quality computer and information technology and the growth of fair and competitive markets in technology licensing and electronic commerce. But UCITA is unbalanced, anti-quality and anti-competitive and will not promote these objectives. It provides no benefit to the Commonwealth of Virginia or its citizens, other than burdening the courts. We should think long and hard before tinkering with the engine of Virginia's economic growth," says 4CITE director Skip Lockwood.
UCITA is controversial not only with users but also within the software industry itself. Numerous quality and software development associations have come out in opposition to UCITA. Additionally, alterations in the purchasing playing field deeply concern library and educational organizations. "The fact that you will not know until after you buy software that it comes "as is", like a used car, is just one of UCITA's many problems," said consumer advocate David McMahon.
The Uniform Computer Information Transactions Act would grant broad new powers to software and information vendors at the expense of businesses and consumers. As currently drafted this legislation would: * Allow software and information vendors to shut down mission-critical software remotely, without court approval and without liability * Allow software vendors to avoid liability for damage caused by known defects * Allow software vendors to prohibit the transfer of software from one company to another, even in the course of a merger or acquisition * Allow software vendors to impede the development of innovative products * Allow software vendors to collect confidential information about businesses and consumers * Binds a user to terms disclosed only after the user has paid for the software and then grants software vendors the right to change terms of the contract unilaterally by e-mail * Curtail the use and circulation of public information * Deprive consumers of adequate legal remedies * Dramatically shifts the balance of existing contract law in favor of software vendors when contracting with businesses and consumers * Through "shrink-wrap" or click-on licenses, undermine libraries', abilities to preserve, make fair use of and lend information products.
Virginia is not the only state that needs to be concerned with UCITA. It is anticipated that a version of UCITA will be introduced in several states in the U.S. over the next year. 4CITE will vigorously oppose UCITA wherever it is introduced.
Members of 4CITE are:
American Association of Law Libraries American Library Association Art Libraries Society of North America Association of Research Libraries Caterpillar Inc. Computer Professionals for Social Responsibility Digital Future Coalition Electronic Frontier Foundation Infoworld International Communications Association John Hancock Mutual Life Insurance Company Law Office of Cem Kaner McLane Inc. National Consumer Law Center National Humanities Alliance Principal Financial Group Prudential Insurance Company of America Satisfice, Inc. Society for Information Management Special Libraries Association
UCITA is making significant legislative progress in Virginia, Maryland, and Oklahoma. If you live in those states (or if you have any connection to those states), please write state legislators to ask them to oppose UCITA.
We expect UCITA to show up soon in New York, New Jersey, Washington (state of), and California. So, letters to those legislators would be timely as well.
If you re-read the article, you'll see references to several United States Supreme Court decisions.
It is old news that software publishers want their transactions to be licenses, just as book publishers and record (music) publishers did. But that doesn't mean they get their wishes.
Throughout the century, new intellectual property industries have come up, tried ways to (in effect) license their products to the public, and failed. They can say whatever they want, but the right to restrict copying is rooted in the United States Constitution (the copyright and patents clause) and is a matter of law. The enforceability of the "license" is a matter of law, not of what the piece of paper says.
Here are some of the early cases. You can do a citation search to find a long string of consistent decisions throughout the century:
Jewelers' Mercantile Agency v. Jewelers' Pub. Co., 155 N.Y. 241 (1898) (rejected the fiction of a lease offered to all comers that restricted transfer of the book and use of information in it); Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908) (rejected a restrictive notice on a book that prohibited the buyer from reselling the book for less than a minimum price. Under the first sale doctrine, publisher lost its property interest in an individual copy of a book once it sold that copy. The restrictive notice could not transform a sale into a license); RCA Mfg. Co. v. Whiteman, 114 F.2d 86 (2d Cir. 1940) (Licensing language on record albums could not convert a mass-market sale into a license.) For patent law, look at the doctrine of exhaustion, starting with Motion Picture Patents Co. v. Universal Film Manufacturing Co. 243 U.S. 502 (1917).
"Software publishers should be held responsible for gross negligence or for intentionally witholding essential information from the customer, but no more than that."
Funny thing, but I proposed that exact idea. So did Ralph Nader. So did the Independent Computer Consultants Association, the Association for Computing Machinery and the Institute for Electrical and Electronic Engineers.
The problem is, it holds software publishers accountable for gross negligence and for withholding essential information (we said, records of known defects) from customers. Several publishers don't want to be accountable for anything.
You would think that large non-software companies would hate UCITA, and some are fighting it, mainly insurance companies.
UCITA looks like a precedent to several large companies. Chrysler (a car company) strongly backs UCITA, for example.
Think about all those consumer protection rules that apply to traditional merchandise and then think how cool it would be (if you sold cars, for example), if you could get rid of them.
The National Conference of Commissioners on Uniform State Laws (the people who brought you UCITA) are currently working on Article 2 of the Uniform Commercial Code (this is the Law of Sales in 49 of 50 of the United States). The Article 2 Revision Drafting Committee refused to adopt some of the shrinkwrap contracting terms into Article 2 last year. They were then treated so badly at the national meeting of NCCUSL annual meeting that the Reporter (senior author) and co-Reporter (second author) of the Article 2 revision resigned after about 12 years of work on the update. Several other members of the committee resigned and there is now a new, improved drafting committee working to revise the Law of Sales.
UCITA is not just about software. It expresses a "post-consumerist" philosophy about law and economics, one that can be (and is being) applied in many contexts.
I recommend that you write your state legislator and your governor. Your letter should be short and simple at this point:
Dear [whoever]
I am deeply concerned about (and opposed to) the Uniform Computer Information Transactions Act, which may soon be introduced in our state's legislature. Would you advise me when (if) this bill is introduced in our state?
Yours truly
====================
Also, the Free Software Foundation has come out against UCITA. Check http://commons.somewhere.com/rre/1999/RRE.campaign .against.abu.html.
====================
Don't kid yourself that this bill is just about software. It governs electronic information in general. Libraries have come out en masse against UCITA because of its effects on them.
Additionally, UCITA creates a precedent that makers of other kinds of merchandise want to use. There is nothing different about hiding the terms of a software contract from the customer until after the sale and hiding the terms of any other kind of merchandise. It is partially because non-software manufacturers got pretty excited by the UCITA sales rules that they invested a lot of money in "tabling" a technical revision (12 years in the making) to Uniform Commercial Code Article 2 (the current Law of Sales in the US.) The bill was tabled in a way that seemed calculated to insult the drafting committee for Article 2. And, indeed, the Reporter (senior author) and Associate Reporter of Article 2 resigned shortly after the draft was tabled. Next year, I predict that we'll see something for traditional merchandise that looks a lot more like UCITA.
====================
Carol Kunze, http://www.2bguide.com is one source of information about UCITA. The site has a pro-UCITA bias, even though it carries some of the opposition materials. I point to a few other materials at my site, www.badsoftware.com.
====================
26 attorneys general, the Federal Trade Commission, libraries, software professional societies, insurance companies, and many others opposed UCITA. see http://www.badsoftware.com/oppose.htm for a list and links.
UCITA passed despite this breadth of opposition. A lot of money will go into supporting it in the state legislatures. This is a powerful example of law for sale.
We CAN fight this turkey, by bringing pressure on our representatives, by asking the press to look at it (write a letter to your local paper's editor, asking for more coverage), and by providing examples of the problems that a bill like this can create.
WERNDA identifies and criticizes some of the points made in the InfoWorld articles:
CLAIM -- UCITA will "prevent the transfer of licenses from one party to another without vendor permission"
WERDNA'S COMMENT: "Of course, this can be (and often is) accomplished under the status quo with a commonly used contract provision. I actually prefer the common law default to the language of UCC2B, but I don't see this as either new or particularly egregious."
KANER'S RESPONSE: UCITA section 502 allows publishers to restrict transfers of MASS-MARKETED works. This was rejected by the United States Supreme Court back in Bobbs-Merrill Co. v. Straus 210 U.S. 339 (1908), which settled the existence of the First Sale doctrine. Similarly, for patented goods, read the literature review and discussion of Motion Picture Patents Co. v. Universal Film Manufacturing Co. 243 U.S. 502 (1917), which established the doctrine of exhaustion.
Without UCITA, I don't think that a ban on transfer of a mass marketed software product (such as giving a used computer game to your cousin when you're done with it) would be enforceable under current law. I certainly have never seen a case that upheld such a restriction in a mass marketed software product.
CLAIM "allow vendors to disclaim warrantees"
WERDNA'S COMMENT: "Vendors can presently disclaim warrantees."
KANER RESPONDS: Oh yes, vendors can disclaim the implied warranty of merchantability under UCC Article 2. But they have to do this CONSPICUOUSLY. Courts have interpreted that requirement consistently in decisions involving software, consumer products and commercial products. They have rejected disclaimers that were not available to the customer until after the customer paid for the product. I'm not going to walk through all the cases. For citations, read the literature review in my book, BAD SOFTWARE: WHAT TO DO WHEN SOFTWARE FAILS. The only exceptions that I found to the general rule (post-sale disclaimers are flatly unenforceable) involved either (a) a longstanding relationship between trading partners, which involved so many transactions that the disclaimer of implied warranties could be treated as part of the course of regular dealing between the parties or (b) a decision based on the Roto-Lith precedent, which has since been overturned by the 1st Circuit (which said it was bringing 1st Circuit caselaw into conformance with Step-Saver, a case that rejected a shrink-wrapped disclaimer of implied warranties).
UCITA sections 2-207 and 2-208 allows publishers to enforce a disclaimer of implied warranties even though the customer is unable to see the disclaimer until after paying for the product and taking it away. No other law in the USA today allows this.
CLAIM "outlaw reverse engineering."
WERDNA'S COMMENT: "I believe you can review the last draft in vain to find a provision outlawing reverse engineering."
The draft doesn't ban reverse engineering. It allows vendors to ban reverse engineering of their products. The section that allows this is 102(b)(16) which defines a "Contractual use restriction" as "an enforceable restriction created by contract, which restriction concerns the use or disclosure of, or access to licensed information or informational rights, including a limitation on scope or manner of use."
A ban on reverse engineering is a restriction on the use of the product (a limitation on scope or manner of use of the product). UCITA repeatedly authorizes contractual use restrictions in software licenses.
Reverse engineering was discussed at length at the last national meeting of NCCUSL, the body sponsoring UCITA. NCCUSL passed the Perlman Amendment, which read:
"If a court as a matter of law finds the contract or any term of the contract to have been unconscionable or contrary to public policies relating to innovation, competition, and free expression at the time it was made, the court may refuse to enforce the contract or it may enforce the remainder of the contract without the impermissible term as to avoid any unconscionable or otherwise impermissible result."
This language, especially the reference to "innovation" and "competition" was felt to protect reverse engineering.
The Article 2B/UCITA drafting committee revised this language as follows:
"If a contract term violates a FUNDAMENTAL public policy, the court may refuse to enforce [it]. . . TO THE EXTENT that the interest in enforcement is CLEARLY OUTWEIGHED by a public policy AGAINST ENFORCEMENT of that term."
I've capitalized a few words to highlight the several things that you will have to prove to a court before the court can refuse to enforce a term. This set of restrictions is even narrower (gives judges less freedom) than current law that governs the power of judges to refuse to enforce terms that violate public policy (see the analysis of public policy conflicts with contracts in the Restatement of Contracts 2nd, published by the American Law Institute).
Note also that the UCITA language drops Perlman's explicit protection of "public policies relating to innovation, competition, and free expression." Instead, we don't know what policies UCITA is talking about.
So, on a case by case basis, software developers can go to court to either attack a contract or to defend themselves from attacks on them by software publishers. After spending a zillion dollars in the trial and appellate courts, the individual developer hopefully wins the case (and so only suffers the loss of the zillion dollars plus huge amounts of wasted time). But a win by one developer doesn't mean that the next developer in the next court will win. For example, a shrinkwrapped arbitration clause was ruled enforceable in the 2nd Circuit (Illinois law) but was ruled unconscionable and unenforceable in New York. So it will take years and many court cases before developers can safely reverse engineer mass market products (safe from threats of enforcement of a law on the books, safe from having to spend a zillion dollars in defense costs). Until then, it will be easy to intimidate most developers with the threat of enforcing the clause. Can you afford to defend yourself against a lawsuit, where even if you win, you still have to pay all your legal expenses?
WERDNA finally calls on readers to read UCITA. By all means, try to read this 200-plus page draft statute. Good luck. I know contract law professors who have studied the statute carefully and concluded that it is unteachable. I have attended all of the UCITA/2B meetings since February 1996 and seen lawyer after lawyer, experts in commercial law, struggling to make sense of the statute. The Reporter (senior author) of UCITA has included many Notes in the draft statute but these have been included over many years, many drafts. The comments don't all match or correspond with the language in the draft, making reading yet more confusing.
The last point that I'll respond to is the cheap shot attack:
WERDNA: "ask yourself why critics aren't really citing its language"
OH COME ON! WE'VE CITED THE LANGUAGE POINT BY POINT, QUOTE BY QUOTE IN DOZENS OF LONG, DETAILED LEGAL ARTICLES. NO, THE NON-LEGAL PRESS WON'T PRINT THESE CITATIONS. BUT YOU CAN GET MANY, MANY OF THESE ARTICLES ON THE NET. Try my website, http://www.badsoftware.com, e.g. http://www.badsoftware.com/kanerncc.htm. Or look at the many papers referenced in http://www.2bguide.com. Or read the federal trade commission's analysis at http://www.ftc.gov.
UCITA has been under development, in various incarnations, for about 12 years. It will finally be resolved, one way or another, this summer when NCCUSL either dumps the thing or sends it to the states (some of which will certainly approve it if they receive it from NCCUSL). By all means, try to read the statute. And then follow the Association for Computing Machinery, the IEEE-USA, the Independent Computer Consultants Association, and the sw-test-discuss software testers mailing list (organizations that represent working programmers) and the many other organizations of publishers, customers, libraries, and writers and express your own concerns about UCITA. Tell the NCCUSL representative in your state to make this turkey go away.
The laws against computer tampering ban the UNAUTHORIZED shutdown of the computer. However, UCITA AUTHORIZES the shutdown. If the vendor operates within the UCITA restrictions, the shutdown will not be unauthorized and will therefore not be unlawful.
"Interesting, groups that have backing which use/depend on software in a big way in their business. Makes sense."
I'm not sure what this means, but if it means that the primary opponents of UCITA are large and small customers, that's a mistake.
The Association for Computing Machinery, the Institute for Electrical and Electronic Engineers, the Sacramento Area Quality Association, the sw-test-discuss mailing list, and the Independent Computer Consultants Association have all opposed UCITA. These groups all represent software developers.
And the Motion Picture Association, the Recording Industry Association, the National Cable Television Association, the National Association of Broadcasters, the Newspaper Association of America, and the Magazine Publishers of America are all publishers. They oppose UCITA as publishers, not as customers. Their gripe is the extent to which the rules favor only the software industry. These publishers find that the rules are too heavily tailored to the practice of software publishers ("Article 2B departs from this sound model [of neutrality across industries] by providing highly specialized default rules based on practices advocated by only one segment of a much broader and more diverse group of licensing industries." www.2bguide.com/docs/1298mpaa.html.)
Here's a list (with links) to opposition letters from a wide range of organizations that oppose UCITA / (formerly Article 2B).
If you want additional information, write me at kaner@kaner.com and/or check my website, http://www.badsoftware.com.
Recently, several organizations have submitted letters to NCCUSL or ALI asking that 2B/UCITA be tabled or cancelled. Not all of these letters have been published. I'm aware of letters from:
- fifty intellectual property law professors (http://www.2BGuide.com/docs/1198ml.html)
- American Association of Law Libraries (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter. html)
- American Library Association (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter. html)
- American Society of Media Photographers (http://www.nwu.org/pic/uccasmp.htm)
- Association for Computing Machinery (http://www.acm.org/usacm/copyright/usacm-ucc2b-10 98.html)
- Association of Research Libraries (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter. html)
- Consumer Federation of America (http://www.cptech.org/ucc/sign-on.html)
- Consumer Project on Technology (Ralph Nader) (http://www.cptech.org/ucc/sign-on.html)
- Consumers Union (http://www.2BGuide.com/docs/cu1098.html)
- Independent Computer Consultants Association (unpublished)
- Institute for Electrical & Electronics Engineers (IEEE) submitted specific criticisms of 2B (http://www.ieee.org/usab/FORUM/POLICY/98feb23.htm l) which have not been resolved in the ways requested. The IEEE suggested in its most recent letter (http://www.ieee.org/usab/FORUM/POLICY/98oct09.htm l) that if these issues were not satisfactorily resolved, it too would recommend tabling.
- Magazine Publishers of America (http://www.2BGuide.com/docs/v9-98.pdf)
- Motion Picture Association of America (http://www.2BGuide.com/docs/v9-98.pdf and http://www.2BGuide.com/docs/mpaa1198.html)
- National Association of Broadcasters (http://www.2BGuide.com/docs/v9-98.pdf)
- National Cable Television Association (http://www.2BGuide.com/docs/v9-98.pdf)
- National Consumer League (http://www.cptech.org/ucc/sign-on.html)
- National Music Publishers Association (unpublished)
- National Writers Union (http://www.nwu.org/pic/ucc1009a.htm)
- Newspaper Association of America (http://www.2BGuide.com/docs/v9-98.pdf)
- Recording Industry Association of America (http://www.2BGuide.com/docs/v9-98.pdf and http://www.2BGuide.com/docs/riaa1098.html)
- Sacramento Area Quality Association (unpublished)
- Society for Information Management (http://www.2BGuide.com/docs/simltr1098.html)
- software-test-discuss (this is the Net's largest e-mail discussion forum on software quality control)
- Special Libraries Association (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter. html)
- United States Public Interest Research Group (http://www.cptech.org/ucc/sign-on.html).
Most of these letters are brief. After consultation with some other consumer advocates, I submitted a detailed letter with a section-by-section call for consumer-side revisions (http://www.badsoftware.com/kanerncc.htm).
The National Writers Union letter (http://www.nwu.org/pic/ucc1009a.htm) details writers' issues.
The Society for Information Management's letter details the concerns of large software customers (http://www.2BGuide.com/docs/simltr1098.html).
A recent advisory letter from the Federal Trade Commission (http://www.ftc.gov/be/v980032.htm) raises many of the same concerns.
Slashdot Mirror
Not only was the sham license (like the one in this picture) on records and books invalidated. The Supreme Court also invalidated restrictive licenses on the machines (see MOTION PICTURE PATENTS CO. v. UNIVERSAL FILM MFG. CO., at 243 U.S. 502 (1917) http://supreme.justia.com/us/243/502/case.html ) These types of restrictive licenses were tried by industry after industry in the 20th century. The courts repeatedly tossed them out as incompatible with the First Sale Doctrine (copyright) or the Doctrine of Alienation (same thing, for patent) or as abuse/misuse of the copyright or patent, or as incompatible with the Fair Use Doctrine (copyright). (Google the terms for more details on these doctrines...) It wasn't until 1995 that the courts accepted the idea of a binding mass-market copyright license (ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) at http://www.law.emory.edu/7circuit/june96/96-1139.h tml ) The primary statute written to validate this judicial stretch was the Uniform Computer Information Transactions Act, which got a lot of press but was rejected in 48/50 states (Virginia and Maryland passed it, everyone else bounced it). A replacement approach is being drafted by the American Law Institute (Principles of the Law of Software Contracts) (contact information at http://www.ali.org/ali/PP16.asp) and these Principles are unlikely to provide a blanket acceptance of all terms in the typical EULA.
If 10 voting equipment vendors publish their open source (remember, "open source" is not necessarily "free") software for inspection, then for each vendor, the other 9 vendors will have a strong incentive to inspect and criticize that 10th vendor's code. ("You really should want to buy *my* voting machines . . . their code sucks. Here, let me prove it. . .
I predict that competing commissioned salespeople can be even more nutty, suspicious, and enthusiastic than computer science professors.
We keep reading about the yet-another-government that said "oh, dear, Microsoft is sooooo expensive, we should use Linux instead."
And then there's an item in the Wall Street Journal about someone from Microsoft striking a deal with the country's government. They get big discounts, free software, maybe some gifts for the schools, maybe even some investments or jobs.
So if you were running a poor country, why WOULDN'T you threaten to give Microsoft products the boot? It's a negotiation!
There have been about 30 published cases so far, since 1987. I cited some in the blog proposal that you're commenting on.
Do google searches on Hill v Gateway 2000, Brower v Gateway 2000, Mortenson Co. v. Timberline Software Corp., StepSaver v Wyse, and Vault v Quaid Software and you'll find the text of most of these cases.
Let me clarify some of the issues that I see raised in the comments:
1) My proposals are primarily in support of disclosure. For readers who prefer free market accountability to litigation, that's what disclosure rules support. To make rational decisions in an open market, the customer needs information to base the decisions on. The information rules that I advocate are not far from laws that currently govern traditional sales:
- The customer can see the contract before the sale and use that knowledge as a factor when comparison shopping (and the press can help customers comparison shop by publishing information about the contracts, such as warranty policies, support policies, etc.)
- The company is accountable for its claims. I'm not talking about claims like "our burgers are yummy." I'm talking about "statements of fact" (specific statements that can be proved true or false). Laws governing warranties, fraud, and deceptive trade practices make these claims enforceable in the traditional markets. If you can't hold the company to its claims, you can't know what you're buying.
- The company can't prevent mass-market customers (and reporters covering mass-market products) from publishing comparison studies and product criticisms.
- The company can't prevent mass-market customers from using reverse engineering to discover bugs and security holes, false claims, etc. (NOTE: Patent law protects the original ideas in a product, whether you reverse engineer them or not. Additionally, my proposal doesn't invalidate a restriction against using reverse engineering to help create a competiting product. It invalidates restrictions that bar people from doing non-competing things, like discovering problems, making this product interoperable with others, fixing bugs in products that a company no longer supports, etc.
- The company has to disclose its KNOWN defects. Note that failure to disclose significant defects in traditional goods can be prosecuted under the deceptive trade practices or unfair competition laws.
The next main theme is privacy/security related. These are ground rules, not litigation magnets. Don't transfer data from someone else's computer without permission, don't block their access to their own data (a trick that some companies use to force customers to renew licenses or agree to unfavorable new license terms) and don't cut off their rights to use software they've paid for without a court order.
This isn't about bugs. It's about misconduct.
Do we need to polish the language to make that distinction clear in the legislation? Of course. This is a set of principles, not legislation. The goal here is to present the ideas simply (while giving enough footnote-links to provide context for legally knowledgeable readers). Legislative precision comes after appropriate people accept the principles.
SO WHY BOTHER? WHAT'S THE POINT?
The software industry is increasingly vulnerable to regulation. Software publishers aren't creating masses of new jobs in the United States. They've made a lot of people angry, partially because they've been doing business in ways that would never be tolerated under traditional American sales law. The most visible representative of the industry is a monopoly that seems to be so greedy as to be willing to try to wipe out even the research / scientific / free-public-benefit community in order to preserve or trivially increase its market share.
When companies look like they're more about greed than about providing benefits to the country, they become vulnerable to regulatory proposals. If their business practices seem dishonest and their products cause widespread, well publicized social disruption, some legislators will introduce bills to regulate the industry. Every crisis is another opportunity for legislation.
Not necessarily good or wise legislation. If we want THAT, it's up to us to advise legislators. Otherwise, they'll do what they do and we'll complain about it later.
There is no Software Consumers' Association, but I have worked with lawyers from Ralph Nader's Consumer Project on Technology and from Consumers Union on software contract law.
When public anger with an industry rises, legislators get tempted to create laws to regulate the industry. Software publishing is particularly vulnerable because so many publishers have engaged in business practices that would be considered outrageous (and unlawful) in traditional markets AND because this is no longer a wildly expanding industry / employer in the United States.
We can lay out some principles to advise those legislators, or we can lay back, and later complain that they got it all wrong.
An unencrypted version must be presented to the user. **Of course** the transmitted data is encrypted if it is sensitive data.
UETA is the uniform electronic transactions act, the primary NCCUSL bill on electronic commerce. It has screwy rules on the legal effect of e-mail (you are liable for have received e-mail that was sent to you whether you actually get it or not; whether it was deleted by a reasonably configured spam or porn filter or not; etc.) but otherwise it is thoughtfully written. This illustrates NCCUSL at its best, while UCITA illustrates NCCUSL (National Conference of Commissioners on Uniform State Laws) at its worst.
UCITA makes profound changes in the law. It says that pieces of paper that you don't see until after the sale become binding contracts, almost no matter what their terms. Yes, you've seen these overreaching pieces of papers with their ridiculous claims plenty of times. The difference is that UCITA says that they are enforceable. For example, there hasn't been a single published (or as far as I know, unpublished) court decision in this century in which the court enforced a disclaimer of implied warranties (such as the warranty of merchantability -- the product is reasonably fit for ordinary use) against a mass-market customer. I'm aware of only three approvals involving businesses and one of those was later overruled. UCITA says these are always enforceable. Even if the company refuses to let the customer see the terms until after the sale. UCITA also helps companies ban reverse engineering of their products. This is just another use restriction (like the nondisclosure restriction that UCITA explicitly lists as a use restriction -- the publisher can tell you, and some do, that you can't publish magazine reviews or benchmark results of its product). Sony just lost its reverse engineering case, giving us some hope for the DVD case. Under UCITA, the DVD case would be a sure loser from Day 1. Here's another example of the abuses that UCITA makes possible. This is an analysis of a license that I obtained from Intel. This is a utility that Intel is giving away for "free." Notice the two example users, a school and a travel agency. Neither of them is a consumer under UCITA, but the product is clearly a consumer-like product. Next, here is the license for this product. Note, 525 words down, in the section titled NEW DEVELOPMENTS, the appropriation of your intellectual property rights if you use this thing. Suppose that you create a web site for your family and use the Intel Photo Album II applet to create fancy transitions in the display of different pictures that you took of grandma with the kids. That's a work of authorship, and if this clause is enforceable, Intel now owns your site, or this portion of your site, and on some readings of this clause it appears that Intel also now own your rights to your pictures of grandma. It looks to me as though this clause is enforceable under UCITA. The unfair surprise provision that was in UCITA back in 1996 is gone. Unconscionability has almost never been used to get a business customer off the hook. And what fundamental public policy does a clause like this offend? Clearly, a clause like this is a surprise. Just as clearly, every company's lawyer should review every clickwrapped contract, because clauses like this are buried in them. Imagine putting together an internal website with private executive presentations about new products. If you use Intel's applet to make the transitions, you have just granted Intel an entitlement to some of your most valuable trade secrets. -------------------------------------------------- -------------- http://www.intel.com/home/funstuff/webapplets/albu m2/album2.htm Use the Photo Album II applet to add high-tech image transitions to your Web pages. Origami, Unseen Wind and Brush are just a few of the effects that will surprise and delight your viewers. The Photo Album II applet benefits from the power of the Intel® Pentium® III processor. As a result, performance PC users can enjoy smooth, fluid displays and fast response times. Experience the wide array of choices at the Lincoln High School Student Activity Center. Explore vacation destination options with TransWorld Travel and see the world! 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For State Level Opposition, go to www.4cite.org
Nope, over the counter sales are not compulsory licenses. The person under compulsion in a compulsory license is the licensor (the seller).
The Independent Computer Consultants Association represents independent CUSTOM programmers. After studying several versions of the UCITA proposal to let vendors shut down customers, they recommended:
(1) UCITA should BAN "self-help" (sending a shut-down message to the customer's computer)
(2) UCITA should allow a custom software developer to get an injunction against a customer (a court would shut down the customer, after hearing the facts) and require the customer to pay the developer's costs if the court granted the injunction. This makes the action affordable for the custom developer but protects the customer and the public (when you shut down a hospital's software, you don't just affect the hospital) from unreasonable shut downs.
The Society for Information Management (representing large customers) also supported this proposal even though their members would end up paying the costs of some injunctions.
The UCITA committee repeatedly rejected this proposal and variations of it.
Another issue -- my core issue -- with the self help provision is that it creates a hole in the customer's security. There is now a way for a remote party to send a message that shuts down the customer's system. The vendor/developer will be liable if IT sends that message without authorization, but what if someone else figures out how to send such messages? (e.g., a disgruntled former employee or a cracker?) The vendor has no liability in this case, and a contract provision stating that the VENDOR will never use self-help doesn't protect the customer from third parties taking advantage of the built-in shutdown routine.
UCITA encourages the adoption of this style of contract enforcement, and thus encourages the creation of new security risks for customers. There are better ways to protect developers' rights.
This right of return replaces current law, such as California's Song-Beverly Act, which says that consumers must be informed of certain terms (warranty disclaimers) BEFORE the sale. With very rare exceptions (In a careful literature review, I found only two cases this century), courts have insisted that customers (business and consumer) be given warranty disclaimers at or before the time of sale. Additionally, in about half of the United States, courts insist that customers be advised of remedy limitations.
UCITA replaces our right to notification of key terms before or at the time of sale with a right of return that says that after you have paid for the thing, taken it home, opened it up, and started to install it, if you don't like the license, you can send it back. You don't get to see the terms before the sale, for example when you are comparison shopping. Instead, after you take back the first product, you can go shopping again for something else, hope that it has better terms, pay for it, take it home, start to install IT, and if you don't like the terms, take it back. Etc., etc. This is a sick joke, not a consumer right.
One alternative proposal, from a leading member of the American Law Institute (which was co-authoring UCITA at that time), was to require publishers who sold software over the web to post the license terms at their website. The publishers protested, claiming that it is complex and difficult to post license terms at their web sites (REALLY, I'M NOT KIDDING! I WAS THERE! THEY KEPT A STRAIGHT FACE AND DIDN'T EVEN BLUSH WHEN THEY SAID THIS!)
In the face of these objections, the UCITA (then called UCC Article 2B) drafting committee refused to impose this requirement on the publishers. Shortly after that, the American Law Institute withdrew from the project, killing Article 2B as an amendment to the Uniform Commercial Code. The project was renamed UCITA and carried solely by the other sponsor, the National Conference of Commissioners on Uniform State Laws. This was the first time in 50 years that the American Law Institute has withdrawn from a joint project with the National Conference of Commissioners on Uniform State Laws.
Additionally, note that this "right of return" is available only to mass-market customers. Quite a range of software and information products (and all access contracts) bought by small businesses (including independent consultants working out of their home)are not mass-market. Those customers can refuse to accept the terms of the license, but they have no right of return, and no right to a refund, no matter how bad the terms are.
Additionally, this right of return expires as soon as you click OK to install the software. If you don't read the license while installing it, you are stuck with it.
For Immediate Release
Contact: Skip Lockwood, 4CITE Coordinator, 202-257-7007
Press Conference: January 7, 2000
8:30-9:30 a.m.
Virginia Capitol Building
House Room 5 "The Press Room"
Richmond, VA
Business and Non-Profit Coalition Urges Caution during Consideration of Legislation Affecting Software Purchasing
(Richmond, Virginia ? January 7, 2000) ? Fearing an erosion of the user rights of consumers and businesses, a coalition including Virginia
business leaders and public information advocates today urged state lawmakers to cast a critical eye on a proposed new law on computer software and on-line services. The coalition, known as "For a
Competitive Information and Technology Economy" or 4CITE, has been formed to oppose the Uniform Computer Information Transactions Act(UCITA).
The Joint Committee on Technology and Science of the Virginia State Legislature (JCOTS) will expected to report on UCITA today. Even
though a broad range of consumer and business groups expressed opposition to UCITA before the JCOTS advisory committee, the advisory committee on Tuesday of this week favorably recommended UCITA to the full committee. Several members of the advisory committee voted against the proposal.
Opposition to the controversial proposal is mounting. 4CITE is a diverse coalition of pro-electronic commerce business and non-profit
end-users and developers of computer information technology. "We support the development of high-quality computer and information technology and the growth of fair and competitive markets in technology licensing and electronic commerce. But UCITA is unbalanced, anti-quality and anti-competitive and will not promote these objectives. It provides no benefit to the Commonwealth of Virginia or its citizens, other than burdening the courts. We should think long and hard before tinkering with the engine of Virginia's economic growth," says 4CITE director Skip Lockwood.
UCITA is controversial not only with users but also within the software industry itself. Numerous quality and software development associations have come out in opposition to UCITA. Additionally, alterations in the purchasing playing field deeply concern library and educational organizations. "The fact that you will not know until after you buy software that it comes "as is", like a used car, is just one of UCITA's many problems," said consumer advocate David McMahon.
The Uniform Computer Information Transactions Act would grant broad new powers to software and information vendors at the expense of businesses and consumers. As currently drafted this legislation would:
* Allow software and information vendors to shut down mission-critical software remotely, without court approval and without liability
* Allow software vendors to avoid liability for damage caused by known defects
* Allow software vendors to prohibit the transfer of software from one company to another, even in the course of a merger or acquisition
* Allow software vendors to impede the development of innovative products
* Allow software vendors to collect confidential information about businesses and consumers
* Binds a user to terms disclosed only after the user has paid for the software and then grants software vendors the right to change terms of the contract unilaterally by e-mail
* Curtail the use and circulation of public information
* Deprive consumers of adequate legal remedies
* Dramatically shifts the balance of existing contract law in favor of software vendors when contracting with businesses and consumers
* Through "shrink-wrap" or click-on licenses, undermine libraries', abilities to preserve, make fair use of and lend information products.
Virginia is not the only state that needs to be concerned with UCITA. It is anticipated that a version of UCITA will be introduced in several states in the U.S. over the next year. 4CITE will vigorously oppose UCITA wherever it is introduced.
Members of 4CITE are:
American Association of Law Libraries
American Library Association
Art Libraries Society of North America
Association of Research Libraries
Caterpillar Inc.
Computer Professionals for Social Responsibility
Digital Future Coalition
Electronic Frontier Foundation
Infoworld
International Communications Association
John Hancock Mutual Life Insurance Company
Law Office of Cem Kaner
McLane Inc.
National Consumer Law Center
National Humanities Alliance
Principal Financial Group
Prudential Insurance Company of America
Satisfice, Inc.
Society for Information Management
Special Libraries Association
UCITA is making significant legislative progress in Virginia, Maryland, and Oklahoma. If you live in those states (or if you have any connection to those states), please write state legislators to ask them to oppose UCITA.
We expect UCITA to show up soon in New York, New Jersey, Washington (state of), and California. So, letters to those legislators would be timely as well.
Thanks,
-- Cem
If you re-read the article, you'll see references to several United States Supreme Court decisions.
It is old news that software publishers want their transactions to be licenses, just as book publishers and record (music) publishers did. But that doesn't mean they get their wishes.
Throughout the century, new intellectual property industries have come up, tried ways to (in effect) license their products to the public, and failed. They can say whatever they want, but the right to restrict copying is rooted in the United States Constitution (the copyright and patents clause) and is a matter of law. The enforceability of the "license" is a matter of law, not of what the piece of paper says.
Here are some of the early cases. You can do a citation search to find a long string of consistent decisions throughout the century:
Jewelers' Mercantile Agency v. Jewelers' Pub. Co., 155 N.Y. 241 (1898) (rejected the fiction of a lease offered to all comers that restricted transfer of the book and use of information in it); Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908) (rejected a restrictive notice on a book that prohibited the buyer from reselling the book for less than a minimum price. Under the first sale doctrine, publisher lost its property interest in an individual copy of a book once it sold that copy. The restrictive notice could not transform a sale into a license); RCA Mfg. Co. v. Whiteman, 114 F.2d 86 (2d Cir. 1940) (Licensing language on record albums could not convert a mass-market sale into a license.) For patent law, look at the doctrine of exhaustion, starting with Motion Picture Patents Co. v. Universal Film Manufacturing Co. 243 U.S. 502 (1917).
"Software publishers should be held responsible for gross negligence or for intentionally witholding essential information from the customer, but no more than that."
Funny thing, but I proposed that exact idea. So did Ralph Nader. So did the Independent Computer Consultants Association, the Association for Computing Machinery and the Institute for Electrical and Electronic Engineers.
The problem is, it holds software publishers accountable for gross negligence and for withholding essential information (we said, records of known defects) from customers. Several publishers don't want to be accountable for anything.
You would think that large non-software companies would hate UCITA, and some are fighting it, mainly insurance companies.
UCITA looks like a precedent to several large companies. Chrysler (a car company) strongly backs UCITA, for example.
Think about all those consumer protection rules that apply to traditional merchandise and then think how cool it would be (if you sold cars, for example), if you could get rid of them.
The National Conference of Commissioners on Uniform State Laws (the people who brought you UCITA) are currently working on Article 2 of the Uniform Commercial Code (this is the Law of Sales in 49 of 50 of the United States). The Article 2 Revision Drafting Committee refused to adopt some of the shrinkwrap contracting terms into Article 2 last year. They were then treated so badly at the national meeting of NCCUSL annual meeting that the Reporter (senior author) and co-Reporter (second author) of the Article 2 revision resigned after about 12 years of work on the update. Several other members of the committee resigned and there is now a new, improved drafting committee working to revise the Law of Sales.
UCITA is not just about software. It expresses a "post-consumerist" philosophy about law and economics, one that can be (and is being) applied in many contexts.
Good thinking, but the drafting committee walked through this idea with care, to make sure people couldn't do this.
If you make a copy of a program (onto your disk or, in the 9th Circuit -- Washington, CA, etc -- into memory so you can run it) then EITHER
(a) you are making a licensed copy (you agreed to the terms of the license)
or (b) you are making a copy without permission, i.e. infringing the publisher's copyright.
So, you get the rock or the hard place. Take your pick.
I recommend that you write your state legislator and your governor. Your letter should be short and simple at this point:
n .against.abu.html.
Dear [whoever]
I am deeply concerned about (and opposed to) the Uniform Computer Information Transactions Act, which may soon be introduced in our state's legislature. Would you advise me when (if) this bill is introduced in our state?
Yours truly
====================
Also, the Free Software Foundation has come out against UCITA. Check http://commons.somewhere.com/rre/1999/RRE.campaig
====================
Don't kid yourself that this bill is just about software. It governs electronic information in general. Libraries have come out en masse against UCITA because of its effects on them.
Additionally, UCITA creates a precedent that makers of other kinds of merchandise want to use. There is nothing different about hiding the terms of a software contract from the customer until after the sale and hiding the terms of any other kind of merchandise. It is partially because non-software manufacturers got pretty excited by the UCITA sales rules that they invested a lot of money in "tabling" a technical revision (12 years in the making) to Uniform Commercial Code Article 2 (the current Law of Sales in the US.) The bill was tabled in a way that seemed calculated to insult the drafting committee for Article 2. And, indeed, the Reporter (senior author) and Associate Reporter of Article 2 resigned shortly after the draft was tabled. Next year, I predict that we'll see something for traditional merchandise that looks a lot more like UCITA.
====================
Carol Kunze, http://www.2bguide.com is one source of information about UCITA. The site has a pro-UCITA bias, even though it carries some of the opposition materials. I point to a few other materials at my site, www.badsoftware.com.
====================
26 attorneys general, the Federal Trade Commission, libraries, software professional societies, insurance companies, and many others opposed UCITA. see http://www.badsoftware.com/oppose.htm for a list and links.
UCITA passed despite this breadth of opposition. A lot of money will go into supporting it in the state legislatures. This is a powerful example of law for sale.
We CAN fight this turkey, by bringing pressure on our representatives, by asking the press to look at it (write a letter to your local paper's editor, asking for more coverage), and by providing examples of the problems that a bill like this can create.
It won't be easy, but it is far from impossible.
WERNDA identifies and criticizes some of the points made in the InfoWorld articles:
CLAIM -- UCITA will "prevent the transfer of licenses from one party to another without vendor permission"
WERDNA'S COMMENT: "Of course, this can be (and often is) accomplished under the status quo with a commonly used contract provision. I actually prefer the common law default to the language of UCC2B, but I don't see this as either new or particularly egregious."
KANER'S RESPONSE: UCITA section 502 allows publishers to restrict transfers of MASS-MARKETED works. This was rejected by the United States Supreme Court back in Bobbs-Merrill Co. v. Straus 210 U.S. 339 (1908), which settled the existence of the First Sale doctrine. Similarly, for patented goods, read the literature review and discussion of Motion Picture Patents Co. v. Universal Film Manufacturing Co. 243 U.S. 502 (1917), which established the doctrine of exhaustion.
Without UCITA, I don't think that a ban on transfer of a mass marketed software product (such as giving a used computer game to your cousin when you're done with it) would be enforceable under current law. I certainly have never seen a case that upheld such a restriction in a mass marketed software product.
CLAIM "allow vendors to disclaim warrantees"
WERDNA'S COMMENT: "Vendors can presently disclaim warrantees."
KANER RESPONDS: Oh yes, vendors can disclaim the implied warranty of merchantability under UCC Article 2. But they have to do this CONSPICUOUSLY. Courts have interpreted that requirement consistently in decisions involving software, consumer products and commercial products. They have rejected disclaimers that were not available to the customer until after the customer paid for the product. I'm not going to walk through all the cases. For citations, read the literature review in my book, BAD SOFTWARE: WHAT TO DO WHEN SOFTWARE FAILS. The only exceptions that I found to the general rule (post-sale disclaimers are flatly unenforceable) involved either (a) a longstanding relationship between trading partners, which involved so many transactions that the disclaimer of implied warranties could be treated as part of the course of regular dealing between the parties or (b) a decision based on the Roto-Lith precedent, which has since been overturned by the 1st Circuit (which said it was bringing 1st Circuit caselaw into conformance with Step-Saver, a case that rejected a shrink-wrapped disclaimer of implied warranties).
UCITA sections 2-207 and 2-208 allows publishers to enforce a disclaimer of implied warranties even though the customer is unable to see the disclaimer until after paying for the product and taking it away. No other law in the USA today allows this.
CLAIM "outlaw reverse engineering."
WERDNA'S COMMENT: "I believe you can review the last draft in vain to find a provision outlawing reverse engineering."
The draft doesn't ban reverse engineering. It allows vendors to ban reverse engineering of their products. The section that allows this is 102(b)(16) which defines a "Contractual use restriction" as "an enforceable restriction created by contract, which restriction concerns the use or disclosure of, or access to licensed information or informational rights, including a limitation on scope or manner of use."
A ban on reverse engineering is a restriction on the use of the product (a limitation on scope or manner of use of the product). UCITA repeatedly authorizes contractual use restrictions in software licenses.
Reverse engineering was discussed at length at the last national meeting of NCCUSL, the body sponsoring UCITA. NCCUSL passed the Perlman Amendment, which read:
"If a court as a matter of law finds the contract or any term of the contract to have been unconscionable or contrary to public policies relating to innovation, competition, and free expression at the time it was made, the court may refuse to enforce the contract or it may enforce the remainder of the contract without the impermissible term as to avoid any unconscionable or otherwise impermissible result."
This language, especially the reference to "innovation" and "competition" was felt to protect reverse engineering.
The Article 2B/UCITA drafting committee revised this language as follows:
"If a contract term violates a FUNDAMENTAL public policy, the court may refuse to enforce [it]. . . TO THE EXTENT that the interest in enforcement is CLEARLY OUTWEIGHED by a public policy AGAINST ENFORCEMENT of that term."
I've capitalized a few words to highlight the several things that you will have to prove to a court before the court can refuse to enforce a term. This set of restrictions is even narrower (gives judges less freedom) than current law that governs the power of judges to refuse to enforce terms that violate public policy (see the analysis of public policy conflicts with contracts in the Restatement of Contracts 2nd, published by the American Law Institute).
Note also that the UCITA language drops Perlman's explicit protection of "public policies relating to innovation, competition, and free expression." Instead, we don't know what policies UCITA is talking about.
So, on a case by case basis, software developers can go to court to either attack a contract or to defend themselves from attacks on them by software publishers. After spending a zillion dollars in the trial and appellate courts, the individual developer hopefully wins the case (and so only suffers the loss of the zillion dollars plus huge amounts of wasted time). But a win by one developer doesn't mean that the next developer in the next court will win. For example, a shrinkwrapped arbitration clause was ruled enforceable in the 2nd Circuit (Illinois law) but was ruled unconscionable and unenforceable in New York. So it will take years and many court cases before developers can safely reverse engineer mass market products (safe from threats of enforcement of a law on the books, safe from having to spend a zillion dollars in defense costs). Until then, it will be easy to intimidate most developers with the threat of enforcing the clause. Can you afford to defend yourself against a lawsuit, where even if you win, you still have to pay all your legal expenses?
WERDNA finally calls on readers to read UCITA. By all means, try to read this 200-plus page draft statute. Good luck. I know contract law professors who have studied the statute carefully and concluded that it is unteachable. I have attended all of the UCITA/2B meetings since February 1996 and seen lawyer after lawyer, experts in commercial law, struggling to make sense of the statute. The Reporter (senior author) of UCITA has included many Notes in the draft statute but these have been included over many years, many drafts. The comments don't all match or correspond with the language in the draft, making reading yet more confusing.
The last point that I'll respond to is the cheap shot attack:
WERDNA: "ask yourself why critics aren't really citing its language"
OH COME ON! WE'VE CITED THE LANGUAGE POINT BY POINT, QUOTE BY QUOTE IN DOZENS OF LONG, DETAILED LEGAL ARTICLES. NO, THE NON-LEGAL PRESS WON'T PRINT THESE CITATIONS. BUT YOU CAN GET MANY, MANY OF THESE ARTICLES ON THE NET. Try my website, http://www.badsoftware.com, e.g. http://www.badsoftware.com/kanerncc.htm. Or look at the many papers referenced in http://www.2bguide.com. Or read the federal trade commission's analysis at http://www.ftc.gov.
UCITA has been under development, in various incarnations, for about 12 years. It will finally be resolved, one way or another, this summer when NCCUSL either dumps the thing or sends it to the states (some of which will certainly approve it if they receive it from NCCUSL). By all means, try to read the statute. And then follow the Association for Computing Machinery, the IEEE-USA, the Independent Computer Consultants Association, and the sw-test-discuss software testers mailing list (organizations that represent working programmers) and the many other organizations of publishers, customers, libraries, and writers and express your own concerns about UCITA. Tell the NCCUSL representative in your state to make this turkey go away.
Thanks,
-- Cem Kaner, J.D., Ph.D.
The laws against computer tampering ban the UNAUTHORIZED shutdown of the computer. However, UCITA AUTHORIZES the shutdown. If the vendor operates within the UCITA restrictions, the shutdown will not be unauthorized and will therefore not be unlawful.
An Anonymous Coward wrote:
"Interesting, groups that have backing which use/depend on software in a big way in their business. Makes sense."
I'm not sure what this means, but if it means that the primary opponents of UCITA are large and small customers, that's a mistake.
The Association for Computing Machinery, the Institute for Electrical and Electronic Engineers, the Sacramento Area Quality Association, the sw-test-discuss mailing list, and the Independent Computer Consultants Association have all opposed UCITA. These groups all represent software developers.
And the Motion Picture Association, the Recording Industry Association, the National Cable Television Association, the National Association of Broadcasters, the Newspaper Association of America, and the Magazine Publishers of America are all publishers. They oppose UCITA as publishers, not as customers. Their gripe is the extent to which the rules favor only the software industry. These publishers find that the rules are too heavily tailored to the practice of software publishers ("Article 2B departs from this sound model [of neutrality across industries] by providing highly specialized default rules based on practices advocated by only one segment of a much broader and more diverse group of licensing industries." www.2bguide.com/docs/1298mpaa.html.)
Here's a list (with links) to opposition letters from a wide range of organizations that oppose UCITA / (formerly Article 2B).
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m l) which have not been resolved in the ways requested. The IEEE suggested in its most recent letter (http://www.ieee.org/usab/FORUM/POLICY/98oct09.htm l) that if these issues were not satisfactorily resolved, it too would recommend tabling.
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If you want additional information, write me at kaner@kaner.com and/or check my website, http://www.badsoftware.com.
Recently, several organizations have submitted letters to NCCUSL or ALI asking that 2B/UCITA be tabled or cancelled. Not all of these letters have been published. I'm aware of letters from:
- fifty intellectual property law professors (http://www.2BGuide.com/docs/1198ml.html)
- American Association of Law Libraries (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter
- American Library Association (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter
- American Society of Media Photographers (http://www.nwu.org/pic/uccasmp.htm)
- Association for Computing Machinery (http://www.acm.org/usacm/copyright/usacm-ucc2b-1
- Association of Research Libraries (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter
- Consumer Federation of America (http://www.cptech.org/ucc/sign-on.html)
- Consumer Project on Technology (Ralph Nader) (http://www.cptech.org/ucc/sign-on.html)
- Consumers Union (http://www.2BGuide.com/docs/cu1098.html)
- Independent Computer Consultants Association (unpublished)
- Institute for Electrical & Electronics Engineers (IEEE) submitted specific criticisms of 2B (http://www.ieee.org/usab/FORUM/POLICY/98feb23.ht
- Magazine Publishers of America (http://www.2BGuide.com/docs/v9-98.pdf)
- Motion Picture Association of America (http://www.2BGuide.com/docs/v9-98.pdf and http://www.2BGuide.com/docs/mpaa1198.html)
- National Association of Broadcasters (http://www.2BGuide.com/docs/v9-98.pdf)
- National Cable Television Association (http://www.2BGuide.com/docs/v9-98.pdf)
- National Consumer League (http://www.cptech.org/ucc/sign-on.html)
- National Music Publishers Association (unpublished)
- National Writers Union (http://www.nwu.org/pic/ucc1009a.htm)
- Newspaper Association of America (http://www.2BGuide.com/docs/v9-98.pdf)
- Recording Industry Association of America (http://www.2BGuide.com/docs/v9-98.pdf and http://www.2BGuide.com/docs/riaa1098.html)
- Sacramento Area Quality Association (unpublished)
- Society for Information Management (http://www.2BGuide.com/docs/simltr1098.html)
- software-test-discuss (this is the Net's largest e-mail discussion forum on software quality control)
- Special Libraries Association (http://www.arl.org/info/letters/libltr.html and http://www.arl.org/info/letters/Wright_ALI_letter
- United States Public Interest Research Group (http://www.cptech.org/ucc/sign-on.html).
Most of these letters are brief. After consultation with some other consumer advocates, I submitted a detailed letter with a section-by-section call for consumer-side revisions (http://www.badsoftware.com/kanerncc.htm).
The National Writers Union letter (http://www.nwu.org/pic/ucc1009a.htm) details writers' issues.
The Society for Information Management's letter details the concerns of large software customers (http://www.2BGuide.com/docs/simltr1098.html).
A recent advisory letter from the Federal Trade Commission (http://www.ftc.gov/be/v980032.htm) raises many of the same concerns.