IP: UCBerkeley press release about Article 2B

[Dave Farber <farber () cis upenn edu>]

File #14802


UC Berkeley experts call for
immediate hold on proposed legislation
to regulate information commerce


FOR IMMEDIATE RELEASE
        Berkeley - A "dangerously ill-conceived law" to regulate all
transactions in information is hurtling toward enactment despite the
enormous legal tangles it will cause, say UC Berkeley experts, who are
calling for another look at the legislation before it is approved.
        If the proposed Article 2B of the Uniform Commercial Code "is
enacted by state legislatures over the next six months, it would be a
disaster," said Professor Pamela Samuelson of the University of
California,
Berkeley. She said it could affect everything from whether book
publishers
take a cue from software developers and start "shrink wrapping" books
to
restrict sharing to whether Internet robots can make legally binding
contracts for computer users who unleash them.
        Despite the awesome breadth of the proposed legislation and the
need to consider its implications, "drafters of this 'model' law intend to
push forward as hard and as fast as they can to get approval so that
states
will begin enacting it as soon as this fall," Samuelson said.
        A key vote on the fate of the proposed law will be held July 24-31
at the meeting of the National Conference of Commissioners of Uniform
State
Laws (NCCUSL) in Cleveland, Ohio. They intend to discuss and vote on
the
text of 2B section-by-section. Samuelson and many other experts hope
NCCUSL
can be persuaded to slow down and take a hard look at Article 2B
before
giving the go ahead to any sections of the law.
        Article 2B proposes to regulate almost all transactions in
information. It is a so-called "model law" that each state legislature can
accept or reject. States usually adopt model laws put forward in the
Uniform Commercial Code so that business transactions across state
lines
remain consistent.
        Among other effects, Article 2B could chill the "fair use" doctrine
that the public and libraries depend on to share information. Like
computer
software, which is often packaged with the admonition that whoever
breaks
the seal is bound by the terms of an enclosed manufacturer's contract,
so
too books could be wrapped in cellophane and sold with all types of
limitations.
        The buyer could even be "barred from passing the purchased copy
onto a friend," according to a paper presented at a recent UC Berkeley
conference by David Nimmer, Elliot Brown and Gary Frischling of the Los
Angeles law firm Irell & Manella LLP. "Nor is there any reason that the
publisher should stop there," the paper went on, pointing out the
ridiculous breadth of the law as currently proposed. "It could likewise
require the reader not to skip chapters, not to read any paragraph more
than three times, not to reveal the surprise plot twists to family or


acquaintances, and certainly not to quote in a book review the few
paragraphs that the fair use doctrine would otherwise permit."
        People "have no idea how dramatically the relationship to
information is going to change if and when Article 2B passes," said
Professor Peter Lyman, former head of the UC Berkeley library system,
one
of the most distinguished research libraries in the country. "In fact, I
doubt if libraries will continue to exist in their present form."
        At the recent conference organized by the Berkeley Center for Law
and Technology and the Institute of Management, Innovation and
Organization
at UC Berkeley, those expressing doubts about whether Article 2B is the
right set of rules for the sale of information included representatives
from sectors as diverse as Silicon Valley law firms, major motion picture
companies, top accounting firms, computer technology companies and
the
World Bank.
        But despite such intensifying concerns, "proponents of Article 2B
want it to be the commercial law of the global information economy," said
Samuelson, who holds a joint appointment with UC Berkeley's School of
Information Management & Systems and the Boalt Hall School of Law.
        Others concerned with Article 2B include:
*       James Davis of Xerox's Palo Alto Research Center, who criticized
Article 2B's validation of contracts by electronic agents, for instance
authorizing Internet robots to enter into binding sales. He felt giving
such contracts the nod was premature since Internet robot technology is
at
best only being tested.
*       Rochelle Dreyfuss of the New York University Law School said
Article 2B would affect U.S. innovation - a vital engine driving business
entrepreneurship and economic growth - by discouraging information
sharing.
*       Michelle Kane of Walt Disney Company said Article 2B was
"software-centric" - written from the point of view of the software
industry - and expressed dismay that concerns of the motion picture
industry had been ignored by the drafting committee.
*       Matthew Lynde of Price Waterhouse, a major accounting and
consulting firm whose clients would be greatly affected by Article 2B,
was
unable to take a position on Article 2B because the legislation was too
complicated to determine its implications for Price Waterhouse.
*       Copyright scholars such as Jerome Reichman of Vanderbilt Law
School
and Charles McManis of Washington University argued forcefully for
continuing "fair use" principles, which Article 2B possibly jeopardizes, as
a way to maintain a balance between information provider and user
interests.
        At a May 14 meeting in Washington, D.C., the American Law
Institute, one of the two original sponsors of the Article 2B effort,
decided the legislation needs work before it is ready for approval, raising
many of same objections that surfaced at the Berkeley conference.
        The other sponsor of the legislation - the National Conference of
Commissioners of Uniform State Laws, which meets this month - is
under
pressure to withhold approval, said Samuelson.
        However the chair of the Article 2B drafting committee, Carlyle


Ring, continues to insist that the U.S. get on with adopting a model law on
licensing information to ensure that its rules become the standard for the
global information economy, said Samuelson.
        "What I want to see happen," said Samuelson, "is for Article 2B to
be pared down to the bare minimum necessary to jump-start electronic
commerce and then watch how that commerce develops before we put
any more
legislation in place."
        She cites Mark Lemley of the University of Texas Law School, who
called for a moratorium on Article 2B until affected parties can study the
draft, understand its meaning, and suggest revisions. Article 2B, Lemley
said, should reflect existing commercial practice and not untested new
rules that could prove unworkable.
###
Note:
For further information, contact Pamela Samuelson at (510) 642-6775
<pam () sims berkeley edu>.
Media contacts: Kathleen Scalise, (510) 643-7741,
<kms () uclink berkeley edu>
or David Irons, (510) 642-2734, <irons () haas berkeley edu>




________________________________________


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