In April, 1999, NCCUSL and ALI issued the following press release:
NCCUSL to Promulgate Freestanding Uniform Computer Information Transactions Act ALI and NCCUSL Announce that Legal Rules for Computer Information Will Not Be Part of UCC
The National Conference of Commissioners on Uniform State Laws (Conference) and the American Law Institute (Institute) have announced that legal rules for computer information transactions will not be promulgated as Article 2B of the Uniform Commercial Code, but the Conference will promulgate the rules for adoption by states as the Uniform Computer Information Transactions Act.
The Conference, a 107-year-old organization whose purpose is to prepare statutes for enactment uniformly among the states, and the Institute, a 76-year-old organization whose purpose is "to promote the clarification and simplification of the law and its better adaptation to social needs," have long been partners in drafting the various articles of the Uniform Commercial Code (Code or UCC). For the past several years the two organizations have worked cooperatively on a UCC project to prepare a statute that would codify evolving legal rules for computer information transactions.
The information industry has grown exponentially in the last decade and already exceeds most manufacturing sectors in size. The numbers of transactions in information and their dollar value are immense. The Internet and information technology and commerce are major components of the future economic prosperity of the United States. As the nation moves from an economy centered around transactions in goods and services to an information economy, the need has grown dramatically for coherent and predictable legal rules to support the contracts that underlie that economy. Lack of uniformity and lack of clarity of the legal rules governing these transactions engender uncertainty, unpredictability, and high transaction costs. Nonetheless, it has become apparent that this area does not presently allow the sort of codification that is represented by the Uniform Commercial Code.
Institute members will have an opportunity to discuss the Uniform Computer Information Transactions Act (UCITA) at the Institute’s annual meeting in San Francisco in May, but will not have votes on it. The proposed statute is then scheduled to be completed and promulgated at the annual meeting of the Conference in Denver this summer. It will be targeted by the Conference for immediate introduction and enactment beginning this fall in the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Conference believes that UCITA can provide a framework in which sound business practices may further evolve in the marketplace bounded by standards of appropriate public policy.
This decision announced by this press release was prompted by significant controversy over provisions of the proposed law, controversy that led ALI to withdraw from further participation in or imprimatur of the project. (Note the last paragraph's statement that the Institute (i.e. ALI) would discuss but not vote on the Act but the Act would be scheduled for promulgation by the Conference (i.e. NCCUSL)).
In July, 1999, amid continuing controversy, NCCUSL did promulagate UCITA for adoption by the fifty states. (Among others, the Attorneys General of thirteen states submitted a letter to NCCUSL urging it not to adopt UCITA in its proposed form.) NCCUSL has published a summary of the act for public consumption that includes a brief description of the Act's provisions on the kind of mass-market licenses considered in ProCD v. Zeidenberg. UCITA has continued to generate controversy since its promulgation by NCCUSL. On its website, NCCUSL reports that only two states, Maryland and Virginia, have adopted UCITA and that it has, as of August 2004, not been introduced into any state legislatures in 2004.
Following is the text of two key sections of UCITA dealing with mass-market licenses, the second of which deals with software downloaded and licensed over the internet.
SECTION 210. MASS-MARKET LICENSE.
(a) A party adopts the terms of a mass-market license for purposes of Section 209 only if the party agrees to the license, such as by manifesting assent, before or during the party's initial performance or use of or access to the information. A term is not part of the license if:
(1) the term is unconscionable under Section 111 or is unenforceable under Section 105(a) or (b); or
(2) subject to Section 301, the term conflicts with terms to which the parties to the license expressly agreed.
(b) If a licensee does not have an opportunity to review a mass-market license or a copy of it before becoming obligated to pay and does not agree, such as by manifesting assent, to the license after having that opportunity, the licensee is entitled to a return under Section 112 and, in addition, to:
(1) reimbursement of any reasonable expenses incurred in complying with the licensor's instructions for return or destruction of the computer information or, in the absence of instructions, incurred for return postage or similar reasonable expense in returning it; and
(2) compensation for any reasonable and foreseeable costs of restoring the licensee's information processing system to reverse changes in the system caused by the installation, if:
(A) the installation occurs because information must be installed to enable review of the license; and
(B) the installation alters the system or information in it but does not restore the system or information upon removal of the installed information because of rejection of the license.
(c) In a mass-market transaction, if the licensor does not have an opportunity to review a record with proposed terms before the licensor delivers or becomes obligated to deliver the information, and if the licensor does not agree, such as by manifesting assent, to those terms after having that opportunity, the licensor is entitled to a return.SECTION 211. PRETRANSACTION DISCLOSURES IN INTERNET-TYPE TRANSACTIONS.
This section applies to a licensor that makes its computer information available to a licensee by electronic means from its Internet or similar electronic site. In such a case, the licensor affords an opportunity to review the terms of a standard form license which opportunity satisfies Section 112(e) with respect to a licensee that acquires the information from that site, if the licensor:
(1) makes the standard terms of the license readily available for review by the licensee before the information is delivered or the licensee becomes obligated to pay, whichever occurs first, by:
(A) displaying prominently and in close proximity to a description of the computer information, or to instructions or steps for acquiring it, the standard terms or a reference to an electronic location from which they can be readily obtained; or
(B) disclosing the availability of the standard terms in a prominent place on the site from which the computer information is offered and promptly furnishing a copy of the standard terms on request before the transfer of the computer information; and
(2) does not take affirmative acts to prevent printing or storage of the standard terms for archival or review purposes by the licensee.