National Conference of Commissioners on Uniform State Laws

211 E. Ontario St., Suite 1300, Chicago, IL 60611
tel 312-915-0195, fax 312-915-0187

For Immediate Release

AMENDMENTS TO UCITA APPROVED

August 5, 2002 — Amendments to the Uniform Computer Information Transactions Act (UCITA) were approved by the National Conference of Commissioners on Uniform State Laws' (NCCUSL) at its 111th Annual Meeting just concluded in Tucson, Arizona, to address concerns expressed by various interest groups.

Highlights from the amendments are:

1. Electronic Self-Help Banned. Vendors (called licensors mainly) of digital information, including software, may not disable the use of that information by electronic means if there is a breach of an information contract. Vendors have an expedited remedy for a material breach of contract in a court of law.

2. A State's Consumer Protection Law Trumps UCITA. An information contract is expressly subject to and may not waive any consumer protection provided in state or federal law. Included are laws providing for conspicuous disclosure, unfair or deceptive trade practices laws, and laws relating to electronic signatures and records.

3. Right to Criticize Protected. Information contract terms that prohibit criticism of an information product are unenforceable. Parties may contract in a manner consistent with other law such as the law of trade secrets.

4. Remedies for Known Material Defect Preserved. Remedies for a known material defect of a product are expressly made available as fully as for defective goods or services.

5. Reverse Engineering for Interoperability Expressly Authorized. An information contract may not prohibit reverse engineering that is done for the purposes of making an information product work together with other information products.

6. Special Open-Source Software Provisions. Open-source software is expressly not covered by the Act if only copyright permission is given and is not part of a contract. If there is a contract, there are no implied warranties if there is no commercial gain from the transaction.

UCITA is the first uniform law governing information contracts. It adopts accepted and familiar principles of commercial contract law, and provides fundamental rules for licensing contracts between users and vendors. It has been enacted, to date, in Maryland and Virginia.

The National Conference of Commissioners on Uniform State Laws is now in its 111th year. The organization comprises more than 300 lawyers, judges, and law professors, appointed by the states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, to draft proposals for uniform and model laws and work toward their enactment in their legislatures. Since its inception in 1892, the group has promulgated more than 200 acts, among them such bulwarks of state statutory law as the Uniform Commercial Code, the Uniform Probate Code, and the Uniform Partnership Act.

For further information, please contact John McCabe or Katie Robinson at 312-915-0195, or Gabrielle Bamberger at 212-333-5222.