IP: Virginia Law Standardizes Internet Contracts

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

> Date:         Thu, 2 Mar 2000 11:41:24 +0000
> From: James Santagata <jms () TRIBALNOISE COM>
> Subject:      Virginia Law Standardizes Internet Contracts
> To: DOMAIN-POLICY () LISTS INTERNIC NET
>
> http://www.techweb.com/wire/story/TWB20000301S0013
>
> Virginia Law Standardizes Internet Contracts (03/01/00, 2:37 p.m. ET) By
> George Leopold, EE Times
>
> WASHINGTON - A law enacted by the Virginia General Assembly --expanding
> Internet contracts -- could open the flood gates to similar laws around the
> nation that supporters say would bring uniformity to Internet transactions.
>
> On Feb. 15, the Virginia General Assembly in Richmond became the first in
> the nation to approve a standard commercial code for Internet contracts,
> the "Uniform Computer Information Transactions Act." The measure is
> expected to be signed into law by Gov. James Gilmore, a Republican, after
> the completion of a series of studies on its impact. Similar measures are
> being considered by state lawmakers in Hawaii, Illinois, Maryland, and
> Oklahoma.
>
> The Virginia law, which seeks to create uniform provisions for contracts
> over the Internet such as software licenses, drew support from the software
> industry and opposition from engineering and consumer groups as well as
> several state attorneys general.
>
> The law contains a lengthy series of definitions designed to clarify the
> reach of Internet contracts. For instance, it would allow companies to send
> binding legal notices by e-mail about restrictions on the use of their
> software. This and other provisions prompted consumer groups to warn that
> the law could bind customers to unseen licensing agreements, while allowing
> companies to disable their product if a purchaser missed a payment.
>
> Contract law varies from state to state, said Jane Johansen, a software-law
> specialist with the Washington law firm Drinkard Biddle. "Maybe the time
> has come for some uniformity" in Internet contracts, she said.
>
> While some groups said the bill is anti-consumer, Johansen said the
> Virginia legislation could provide consumers with a better chance of
> getting a refund on returned software since it contains new warranty
> definitions usually not found in software contracts. She said the expressed
> warranties would force software companies to add disclaimers to licenses,
> thereby highlighting new protections.
>
> Detractors predicted software firms would simply bury the disclaimers in
> already confusing licensing agreements.
>
> Still unclear is how the new code would affect so-called "upstream
> transactions" by large software companies licensing their products in the
> state.
>
> Another sticky issue is whether the Virginia law changes current laws on
> reverse engineering. The issue prompted engineering groups, such as the
> IEEE-USA, to oppose the bill.
>
> The legislation "would bind you to an agreement where you can't do any
> reverse engineering," said Mark Pullen, IEEE-USA's vice president for
> technology policy. Pullen said the capability is important for software
> engineers so they can, for example, design software to read different file
> formats.
>
> Plus, said Pullen, the Virginia bill turns a "purchase decision into a
> license agreement."
>
> But Johansen said, "So far, I don't see this law changing the law on
> reverse engineering" of software. Virginia legislators will study the
> impact of the law on libraries and other state institutions. Opponents have
> not ruled out a court challenge.