June 08, 2001, 6:41 PM — The American Bar Association may vote at its annual meeting in August to oppose UCITA unless the controversial software licensing law is extensively revised.
The ABA's Tort and Insurance Practice Section, a major group within the Washington-based organization, stated in a recent resolution obtained by Computerworld that UCITA should be "extensively revised" to more adequately reflect current law on licensing intellectual property, "with due regard for basic rights of consumers and the protection of licensees from unwarranted unilateral actions of the licensor." This language is included in a resolution that may be considered by the ABA's approximately 530-member House of Delegates, its national legislative body.
This could be a critical development: Such an ABA stand, UCITA opponents believe, will put them in a strong position to convince states that adoption of the law would be a mistake.
Not that most states need much convincing. Since Maryland and Virginia quickly adopted the Uniform Computer Information Transactions Act last year, the battle has shifted in favor of end users, who stalled adoption of the vendor-backed law in seven other states, including Texas and Arizona, where it was considered this year.
Opponents of UCITA, such as Bruce Barnes, vice president of technology strategy and planning at Columbus, Ohio-based Nationwide Insurance Cos., argue that UCITA gives vendors too much power in contracts through default rules such as "self-help," which allows vendors to remotely disable systems in a contract.
But Ray Nimmer, a professor at the University of Houston Law Center and a UCITA drafter, argues that the law has the opposite effect and protects licensees by putting so many restrictions on self-help that the likelihood is that it will never be used.
Regardless, Barnes is on guard for "UCITA-like" provisions in licensing contracts, whether or not the law is adopted. In particular, his staff will be paying close attention to the pending terms and conditions of Microsoft Corp.'s new licensing program, which includes an optional subscription component on operating systems, office productivity suites and other systems.
"What I've been doing is encouraging our supply management folks to do a detailed assessment of the new Microsoft licensing proposals, looking specially for elements that parallel the UCITA provisions that we remain steadfastly against," said Barnes. He said they are still awaiting contract details.
Simon Hughes, program manager for worldwide pricing and licensing at Microsoft, said that under the subscription plan, Microsoft software won't use embedded self-help features, such as the ability to turn itself off or lose functionality at the end of a three-year licensing period. The company's goal will be to "work with customers to make them compliant" with the terms of the license.
Legal experts differ on whether a subscription plan is strengthened by UCITA. Microsoft, which has backed UCITA, says its subscription model breaks no new ground and is "fully compatible with contract law in those states that have not adopted UCITA and in those states that have adopted UCITA," said Bob Gomulkiewicz, associate general counsel at Microsoft. All UCITA does is put together legal principals in one place, he said.
Cem Kaner, an attorney and a computer science professor at the Florida Institute of Technology in Melbourne, said a subscription plan is akin to a car lease that sets restrictions, adding that he believes UCITA makes the terms of a subscription more binding.
But Steve Gold, an attorney at Gordon & Glickson LLC in Chicago, said software has always been under the control of a leasing model. The only change created by a subscription model is the economics of it, he argued.
This argument may be moot if UCITA isn't going anywhere. The ABA's Tort and Insurance Practice Session wants to work with the National Conference of Commissioners on Uniform State Laws (NCCUSL), the body that sponsored UCITA, on the issue. If that happens, the ABA's House of Delegates may be asked to hold off on any vote until those talks are completed. As part of that, the NCCUSL would be asked not to press for state adoption of UCITA in the interim, according to interviews with people familiar with the issue.
