By Rachel Chalmers

A group working on unifying US state laws has approved a software licensing law which opponents fear will leave power firmly in the hands of software vendors. The National Conference of Commissioners on Uniform State Laws (NCCUSL) is comprised of 300 lawyers, judges, and law professors, appointed by the states as well as the District of Columbia, Puerto Rico, and the US Virgin Islands. Its members draft proposals for uniform and model laws and work toward their enactment in state legislatures. So far the NCCUSL has promulgated more than 200 acts, most of which the states go on to embrace.

At the group’s annual meeting in Denver, NCCUSL members voted 43- 6 to adopt the Uniform Computer Information Transactions Act (UCITA). The law was intended to clear up a legal gray area, where judges presiding over software licensing disputes must choose between a number of relevant state and federal regulations. But an increasing number of critics, including the Federal Trade Commission’s Bureau of Consumer Protection and the Association for Computing Machinery (ACM) say UCITA will rubber- stamp the shrink-wrap licenses software vendors routinely seek to impose on their customers.

Such licenses violate the established principle of consumer protection that terms of a transaction should be disclosed before the sale is complete. Customers aren’t allowed to open software boxes and read the licenses before they complete the sale. The Bureau of Consumer Protection worries that this imposes an unfair risk on software customers. The ACM goes further, saying UCITA may indemnify software vendors from legal liability caused by defects in their software. The law may also prohibit reverse engineering and contribute to a decline in standards in software engineering as a profession.

Nevertheless, the NCCUSL has passed UCITA, and its drafters defend the legislation on the ground that both consumers and vendors will be able to rely on a single law. We think that this will extend the rights of end users, co-drafter Ray Nimmer, a professor at the University of Houston Law Center, told Infoworld. Now those who disagree – including 25 Attorneys General, who wrote to the NCCUSL urging members to table UCITA – must take their battle to the states.