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IP: UCITA

From: Dave Farber <farber () cis upenn edu>
Date: Wed, 23 Feb 2000 14:02:29 -0500

From http://www.badsoftware.com/networld.htm

Bad Software: What To Do When Software Fails.

Cem Kaner, Ph.D., J.D. P.O. Box 1200
Law Office of Cem Kaner Santa Clara, CA 95052
kaner () kaner com 408-244-7000

Op-Ed in Network World

Delta: Legal issues

Head: UCITA: a bad law that protects bad software

Byline: Cem Kaner and David L. Pels

Published in Network World, Copyright (c) Network World 1999
We (Kaner and Pels) can authorize you to quote from this paper, but if you
quote more than a "fair use" amount, PLEASE acknowledge that you are
reprinting material from this paper, that it was first published in Network
World, and that it is reprinted with permission.

At this point in your career, you?ve probably encountered more than your
fair share of software that suffers from poor documentation, inadequate
attention to interoperability and known bugs. If so, you need to know about
the Uniform Computer Information Transactions Act (UCITA), , which software
publishers are pushing in order to head off lawsuits from unhappy customers.

Under UCITA, software publishers have no duty to check their products for
viruses. Furthermore, vendors can avoid paying for damage caused by a virus
by including a simple disclaimer of implied warranties, which you don't even
see until you?ve bought and installed the product. (No other industry in the
U.S. gets to enforce post-sale warranty disclaimers.)

In addition, UCITA:

* Redefines "material breach of contract" to make it harder to return a
defective product. Software publishers are allowed to include a clause
in the contract (which you never see before the sale because it?s
contained within the shrink-wrapped package) that says you cannot
cancel the contract and demand a refund even if the product is
worthless.
* Lets software publishers charge users a non-refundable per-minute fee
for tech support, even for defects that were known at the time of
shipment.
* Authorizes restrictions that make it harder or impossible for customers
to obtain third-party maintenance (such as for fixing Y2K-related bugs,
even if the original vendor is too busy to help you in time) or to
transfer packaged software (when company X is sold to company Y, Y may
have to pay new license fees for each copy of each piece of software on
X?s machines).
* Authorizes "time bombs" that automatically shut off the software at a
given date, unless a license renewal fee is paid and registered. UCITA
also allows a vendor to send a message to your computer that shuts down
your copy of its software, possibly shutting down your business at the
same time. You can collect damages if the vendor sends the message in
error, but only if you respond to a warning message from the vendor in
just the right way.

For more on UCITA's impact on business customers, read the Society for
Information Management's white paper (on Article 2B) at
www.simnet.org/public/ucc.html.

Not surprisingly, even though a typically neutral and well-respected
legislative drafting organization, the National Conference of Commissioners
on Uniform State Laws (NCCUSL), is officially writing UCITA, the
open-to-the-public drafting meetings have been dominated by lawyers
representing publishers.

We started attending these meetings three years ago, seeking compromises to
reduce customer risk without imposing hard-to-manage risks on publishers.
There have been big clashes and loud debates, but often it's the little
things that tell you about the people you're negotiating with. For example,
in a meeting a couple of years ago, one of the 10 NCCUSL members made a
comment about user errors made by "dumb customers." A lawyer representing
several publishers replied, "Dumb customers? That's redundant!" Almost
everyone in the room seemed to think this was hilarious.

Until recently UCITA was called Article 2B and was a proposed amendment to
the Uniform Commercial Code (UCC). All amendments to the UCC are
co-sponsored by the American Law Institute (ALI) and NCCUSL. Last year, the
ALI called for "fundamental revisions" in Article 2B. On April 9, the ALI
withdrew from the Article 2B process, so 2B cannot amend the Uniform
Commercial Code. NCCUSL renamed 2B UCITA and is now carrying UCITA on its
own.

The last publicly open Article 2B / UCITA drafting committee meeting was
held in February. At the NCCUSL national meeting in Denver this July,
ArticlUCITA will be submitted for approval. If it passes there, it might go
to the state legislatures as early as October. And if UCITA passes in a few
states, publishers will be able to make it the law that governs their
contracts in all states.

Writing a law that makes it almost impossible to sue software publishers for
defects is a poor way to manage the escalating level of software customer
dissatisfaction with bad software and bad support. But without opposition
from more businesses, that law will pass.

If you want to have your say about UCITA, here are some things you can do:

* Send a letter to Gene Lebrun, President of NCCUSL, P.O. Box 8250, Rapid
City, SD 57709. E-mail can be sent to > City, SD 57709. E-mail can be sent to glebrun () lynnjackson com.
Please
send a copy to > send a copy to kaner () kaner com.
* Attend the national meeting of NCCUSL in Denver, July 23-30. For more
information, see www.nccusl.org.
* For UCITA status reports and other suggestions, check our website at
www.badsoftware.com.

Kaner is a Silicon Valley-based attorney and software development
consultant. Pels heads customer operations and support for the
high-technology division of a leading automotive diagnostics company. They
are the authors of Bad Software: What To Do When Software Fails (John Wiley
& Sons, 1998). They can be reached at >& Sons, 1998). They can be reached at ucita () badsoftware com.

------------------------------------------------------------------------

The articles at this web site are not legal advice. They do not establish a
lawyer/client relationship between me and you. I took care to ensure that
they were well researched at the time that I wrote them, but the law changes
quickly. By the time you read this material, it may be out of date. Also,
the laws of the different States are not the same. These discussions might
not apply to your circumstances. Please do not take legal action on the
basis of what you read here, without consulting your own attorney.

Questions or problems regarding this web site should be directed to Cem
Kaner, kaner () kaner com, P.O. Box 1200, Santa Clara, CA 95052.

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IP: UCITA Dave Farber (Feb 23)