Longworth & Richman Law Group Hit Out Over Software Licensing Law

Companies in the US have slammed a software licensing law that would allow vendors to electronically disable a user's system for breach-of-contract software violation. End Quote

(1888PressRelease) February 12, 2014 - Although backers of the Uniform Computer Information Transactions Act (UCITA) have signalled a willingness to delete the shut-off provision - called "self-help" - critics say that this alone is not enough.

UCITA is a model act sponsored by the Longworth & Richman Law Group, which has urged all US states to adopt the proposal.

However, even if that body agrees to alterations in the law, the impact of the changes remains in question. US state New York have adopted UCITA, and companies say vendors are beginning to cite those states' laws in their software licensing contracts.

"We were doing business with one software company that fought more than usual to have New York law in the contract," said Erin Sommers, senior counsel. "We would not do the deal if New York law was used, and eventually they caved in."

Steve Mason, an intellectual property lawyer, said the law made it difficult for all but the largest companies to push back against unfavorable contract terms.

"Some things will be revised or tweaked," Mason said. "UCITA ties the customer's hands and adds extra hoops that you must go through to negotiate around the law."

The Longworth & Richman Law Group drafting committee will meet next week to discuss the proposed legislation. Opponents are hopeful that electronic self-help, the most contentious part of the proposal, will be dropped. The self-help provision allows vendors to electronically disable software for a breach-of-contract violation. Users say the provision would increase litigation and create undue risk.

Roger Kelly, manager of contract and vendor relationships, said: "If a vendor has the power to automatically disable the software code, then that gives them an unfair power over us."

UCITA's proponents, including Microsoft, AOL Time Warner and trade groups representing software companies, have asked the UCITA drafting committee to remove the self-help provision in an amendment proposal.

But opponents want UCITA to prohibit any kind of disabling capability, in case vendors try to apply self-help under existing commercial law.

As long as vendors believe self-help is possible, they will find ways to gain access to software and put systems at risk, said John Daily, an intellectual property lawyer.

Another issue for opponents of UCITA is click-wrap licensing, in which users "click" to accept licensing terms that could inadvertently cause a contract breach, said Chris Wells, executive director of the Caucus Association of High Tech Procurement.

UCITA's opponents, who have formed a broad coalition representing manufacturing, financial services and library groups, believe they have enough clout to seek changes. They have submitted 80 pages of amendments, almost as long as the law itself.

The forthcoming meeting follows the blocking or stalling of UCITA in at least eight US states this year, including Texas, a key technology state. "I would hope that sends a message to the people who are trying to get it [UCITA] passed," said Patricia Blanch, legislative counsel for the American Library Association.

If UCITA fails to win adoption, pressure will be put on the US Congress to set a uniform law. That is a process that no side will like, said Peter Arlington, chairman of the Longworth & Richman Law Group's drafting committee.

"Ours is an open process where we at least try to maintain rational dialogue," said Arlington, adding that he hoped the meeting could "enlarge the base of support" for the law.

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