[ONLINE] feature

UCITA: What Does it Mean for Libraries?

Vicki L. Gregory

ONLINE, January 2001
Copyright © 2001 Information Today, Inc.


On October 1, 2000, the Uniform Computer Information Transactions Act (UCITA) became effective in the State of Maryland, the first state in which this controversial proposed uniform legislation has actually become the law. The legislatures of many other states will undoubtedly be considering adoption of UCITA during the next few years, and such considerations can be viewed simply as part of the often-commended general efforts that have been ongoing for many years in the United States to make the laws of the various states more similar if not necessarily identical.

So why should library and information professionals be particularly concerned? They have a very good reason: UCITA applies to and affects many aspects of contract law as applied to electronic materials. With the increasing use by librarians of leased, rather than purchased, electronic materials, UCITA will be as important as, or even more important than, copyright law to librarians and information professionals. This article will provide background information about UCITA and the possible consequences its passage in your state could have on your library or information center's ability to deliver electronic resources to your clients.


At the present time, information technology accounts for more than a third of the marginal economic growth in the United States and constitutes its most rapidly expanding component. The U.S. Department of Commerce, in its June 1999 publication the Emerging Digital Economy II (http://www.ecommerce.gov/ede), predicts that by 2006 roughly half of the U.S. work force will be employed in industries or activities that are either major producers or intensive users of information technology-related products or services.

As information technology, or IT, becomes a significant factor in our society as a whole, it does seem natural that there would emerge growing legal concerns surrounding this industry. Although many traditional legal concepts, such as the law of commercial transactions and warranty, can be applied to IT, the special and unique concepts related to IT are seen by many as requiring special rules. UCITA can be seen as a response to that perception, and is touted by its proponents as an attempt to provide some state-to-state uniformity in the rules governing transactions involving digital information. In providing that uniformity, however, UCITA introduces a number of new and wide-ranging rules that have not previously been the law in any state.


UCITA is a proposed new uniform law that was approved in July 1999 (with amendments approved in August 2000) by the National Conference of Commissioners on Uniform State Laws (NCCUSL). It is a code of laws dealing with software and database licensing issues that cover contracts involving computer software, documentation, databases, Web sites, ebooks, digital movies, and digital sound recordings. At its core, UCITA is intended to codify and standardize state contract laws concerning business practices involving signed licenses, shrink-wrap licenses, and "click-through" licenses for software, databases, and Web sites.

UCITA was proposed following a failed attempt to propose many of its terms and provisions as a new article for inclusion in the Uniform Commercial Code (to be designated as Article 2B of the Code, or simply UCC2B). The Uniform Commercial Code (UCC) is generally recognized as among the most successful and universally adopted uniform laws by the various states. (The UCC in substantially identical form is law in every state except Louisiana.) Possibly concerned with the potential for introducing too much of an element of disuniformity in the otherwise fairly well-settled UCC–due to controversy and because of the strong opposition of several of its members–the American Law Institute withdrew its consideration of the amendment and UCC2B was reborn as UCITA.

A proposed uniform law is simply a proposal, and must be adopted by each state's legislature before it becomes law in that state. To date, UCITA has been passed by legislatures and become law only in Virginia and Maryland, but it is expected that UCITA will be introduced in the legislatures of all 50 states over a period of a year or so. Consideration by Canadian provincial legislative bodies is a possibility as well.


UCITA's scope is rather more broad than its "computer information" name might imply, especially considering the current trends in electronic information delivery. In fact, UCITA is clearly going to apply to more and more information resources as time goes on. And therein lies a significant part of the controversy surrounding UCITA.

UCITA applies to "computer-information-only" transactions as well as "mixed" transactions that include both computer information and other matters such as services. In mixed transactions, UCITA would apply to the whole transaction, but only when computer information is the primary subject matter. This seems simple enough, but some of the most often-heard criticism of UCITA concerns its broad definition of computer information, that is, "information in electronic form which is obtained through the use of a computer or which is in a form capable of being processed by a computer." As stated in the Uniform Computer Information Transactions Act, Section 102(a)(11), the term includes "a copy of information in that form and any documentation or packaging associated with the copy." The phrase "capable of being processed by a computer" is the key and serves to make the definition very broad indeed.

UCITA applies to contracts that involve licensing or purchasing computer software, contracts that entail creating computer programs or games, and contracts for accessing online databases or distributing digital information.


Since its beginnings as UCC2B, the principles of law outlined in UCITA have been criticized or opposed by a surprisingly large number of persons and organizations. Trade associations, such as the Institute of Electrical and Electronics Engineers (IEEE) and the Association of Computing Machinery (ACM) that represent computer programmers, are among the most significant examples of organizations that have raised serious concerns regarding UCITA. Perhaps more importantly, the Federal Trade Commission and the Attorneys General of at least 24 states are also powerful opponents of UCITA. In addition, insurance companies and many industrial concerns that are heavy users of computer software and digital information have been counted among the opponents of UCITA, as well as consumer advocates, magazine and newspaper publishers, and librarians and library users. On the other hand, publishers of software and electronic-based materials are the primary supporters of UCITA. Aggressively advocating passage of the law are the Software Industry Information Association (http://www.siia.net) and the Business Software Alliance (http://bsa.org).


As a matter concerning a field of law–contract law, not assigned to the Congress of the United States–UCITA is state-based for its effectiveness. This is as opposed to the federal basis of the copyright laws, a basis actually enshrined in the U.S. Constitution itself as Article I, Section 8, clause 8. Since UCITA must be passed by the state legislatures before it can become effective in the various particular states, UCITA's provisions have the potential to vary from state to state. (This is true of most uniform laws to some degree; even the more or less pristine UCC contains a number of variants state to state, some arising simply because of failure to adopt updates and changes owing to vagaries in the enactment process; varying legislative convening and adjournment schedules; biennial session requirements and limitations; or other variations being based on a specific intent to provide for a differing substantive result or rule in a particular state.)

Leaving such problems of variation aside, it is critical to note that under UCITA, it would be possible to sign a contract that would essentially take away from an author or producer substantially all the rights granted him under the copyright laws, except in very few instances, one example being music residuals. Current copyright laws grant the copyright holder exclusive rights respecting the reproduction, adaptation, publication, performance, and display of copyrighted works. A limited–but nonetheless important in the library context–exception to the exclusivity of these rights is the so-called "first-sale doctrine". Under the first-sale doctrine, according to Title 17 U.S.C. section 109(a), a person who legitimately owns a copy of a work–one who purchased the work or otherwise acquired ownership of the work with the permission of the copyright holder–has the full authority to "sell or otherwise dispose of the possession of that copy." This is one of the main legal premises that allows libraries to lend the materials they acquire for their collections and thus function as they traditionally have done and still do today.

Thus, if a particular transfer of intellectual property is deemed to be a sale, then the owner of the copyright will have lost all control over that particular copy of the work. This is in stark contrast to the situation in which the copyright owner licenses a work, meaning that the owner of the copyright entered into a contractual agreement with another party regarding the use of the work, but not its ownership. Under a licensing agreement, the work has not been sold, but instead permission to use the work within whatever conditions or guidelines that may be set forth or defined in the license has been established. It is in these situations where UCITA's provisions may come into play in a negative way for librarians and library users.


Assuming one accepts the premise that copyright laws are still important to ensure the advancement of knowledge through journals and other means of distribution, it is the licensing issues, the application of statutory commercial contract law governing the relationship of particular parties to particular contracts–as opposed to the statutory law principles promulgated in respect of the relations between the producers and users of copyrighted works generally–that is fast becoming the most important legal overlay to the provision of digital information, more important even than changes in copyright law. Although copyright law in general, and those limitations imposed contractually through licensing specifically, both share a common goal of protecting intellectual property, there are important distinctions in how these two legal constructs go about accomplishing their respective purposes. Ann Okerson ("Copyright or Contract?" Library Journal. 122, No. 14 (September 1, 1997): pp. 136-139) sums up these differences cogently:

"Copyright represents a set of general regulations negotiated through statutory enactment. The same laws and guidelines apply to everyone in the country. Licenses or contracts, on the other hand, represent a market-driven approach to such regulation. Each license is arranged between a willing purveyor and a willing licensee, resource by resource. The owner of a piece of property is free to ask whatever price and set whatever conditions the market will bear."


In general, the contract law of sales, of which UCITA will become a part, was developed to regulate business-to-business transactions in tangible goods. However, contract law increasingly impacts the everyday consumer of computer information and products as well as business and library users.

Concerns for copyright versus contract law include issues involving such things as a small (or large) business owner, a librarian, and a consumer using the same software or digital information who may be subject to the same license restrictions, even though the ways and purposes for which they are using the software or information may be very different. Copyright laws have always provided for fair use exceptions for nonprofit educational and research use, and criticism, to name just a few exceptional areas. Opponents of UCITA fear the effective extinction of such fair use rights under UCITA. Librarians also fear they will have imposed on them contract clauses that prohibit lending materials or that prohibit activities or uses that libraries may make in carrying out their preservation efforts.

Proponents of UCITA argue that copyright law will take precedence over UCITA, but it should be noted that federal copyright law does not necessarily preempt contracts that restrict usage or provide for exceptions to rights generally granted under copyright law, except in very few instances. In fact, the general rule is that a negotiated contract is not overruled by copyright law. It remains to be seen how the courts will decide matters in cases involving shrink-wrap or "click-through" licenses, as at the moment the rulings seem to be split in the few cases that have been decided.

Another area of concern is that UCITA may bind companies or libraries to license terms in software acquired by employees (or library users?) without prior authorization. There is an inherent problem in that there is no way to know who clicked the "agree" button or tore off the shrink wrap. For example, is or should a library be bound by a license if a 7-year-old child in the children's room clicked the "agree" button?


Yet another major criticism of UCITA is that the proposal would allow software companies to restrict information about their product. Several companies do this currently as part of their licensing agreements, but UCITA would give this practice a solid legal grounding. For example, UCITA would let companies prohibit publication of criticism of their product by inserting a clause in the licensing agreement to the effect that "The customer will not publish reviews of the product without prior consent from ABC Software Company." Many writers and librarians are rankled by the thought that they might not be legally permitted to write product reviews because of this kind of restriction.

Another major cause for concern is UCITA's provision for "self-help", which allows a licensor to deal with a license violation without resorting to litigation or the help of the courts. In the context of computer information, self-help usually means automatic or remote disablement by the licensor. Not only might your software and databases be legally disabled through UCITA's self-help provision, but these provisions also open up the real possibility for security violations from hackers as vendors build the "back doors" or "trap doors" into their software that would allow them to activate their "self-help" provisions. The trouble is that such devices are notorious as possible avenues for hackers to use in breaking into computer systems.


As pointed out above, Virginia was the first state to pass UCITA, but the Virginia General Assembly delayed its implementation until July 2001. Thus, the State of Maryland, whose legislature passed UCITA second, is nevertheless the first state in which UCITA became effective. Since most state legislatures are as of this writing adjourned for the 2000 "campaign season", nothing is likely to develop until the new regular legislative sessions start up in 2001. However, next year it is likely that you will see UCITA activity in your state legislature. Watch for it and try to alert your state legislators as to the controversial aspects of the proposed legislation.

Proposed uniform laws are not often controversial items appearing prominently on individual legislators' "radar screens", and quick passage of UCITA was possible in Virginia and Maryland mostly because opponents did not have enough time to mount an effective opposing campaign. State legislators are not famous for conducting their own research efforts. Unless they hear from opponents, the natural tendency is to approve much of whatever it is that comes before them. The message is clear: do not be caught napping when UCITA is introduced in your state's legislature!

Learning More About UCITA

There are a number of Web sites to keep you up-to-date with UCITA developments. This short list highlights a few of the more visible sites, almost all of which link out to other UCITA resources.

UCITA Fact Sheet (http://www.cpsr.org/program/UCITA/ucita-fact.html): Developed by Computer Professionals for Social Responsibility, the UCITA Fact Sheet covers the definition and brief history of UCITA, and links to the promoters (only one, the Software & Information Industry Association, is listed) and opponents of the law. A sub page attempts to track activity at the state level.

UCITA: State Contract Law Intersects Federal Copyright Law (http://www.ala.org/washoff/ucita.html): The American Library Association's Washington Office offers this explanation of UCITA from the perspective of its effect on libraries and provides links to other informative Web sites. ALA also has a sample letter to be sent to state legislators considering UCITA legislation.

Uniform Computer Information Transaction Act (UCITA) (http://www.arl.org/info/frn/copy/ucitapg.html): The Association of Research Libraries weighs in with its take on UCITA, including links to letters, statements, and testimony. The previous concerns about UCC2B are also thoroughly covered.

4Cite (http://www.4cite.org): Clearly anti-UCITA, 4Cite "For a Competitive Information and Technology Economy" not only provides information on UCITA and a list of organizations, individuals, associations, and companies that oppose UCITA, but also gives advice to activists fighting the legislation.

UCITA Online (http://www.ucitaonline.com): Created by California attorney Carol A. Kunza, this site tracks what's new with UCITA and includes information about what is happening in states where UCITA is under consideration. Although the tone is factual, her section on "myths" about UCITA is strongly pro-UCITA.

The UCITA Page (http://www.infoworld.com/ucita/): InfoWorld has published a large number of articles by Ed Foster castigating UCITA. This Web site updates his commentary and gives links to other UCITA resources.

IEEE Position Paper (http://www.ieeeusa.org/forum/POSITIONS/ucita.html): The Institute of Electrical and Electronic Engineers - United States of America, representing 240,000 members, took the position that UCITA should not be adopted by the states. Their position paper outlines their objections to UCITA.

–Marydee Ojala

Vicki L. Gregory (Gregory@luna.cas.usf.edu) is Professor and Director, School of Library and Information Science, University of South Florida, Tampa, FL.

Comments? Email letters to the Editor at marydee@infotoday.com.

[infotoday.com] [ONLINE] [Current Issue] [Subscriptions] [Top]

Copyright © 2001, Information Today, Inc. All rights reserved.