By John Marcotte | staff Writer

A new law would redefine ownership in the Information Age.

When you buy a piece of off-the-shelf software, you dont own it the way you own a new radio or a box of Cheerios. Software manufacturers have long maintained that you do not own the software at all. Rather, you are buying a license to use the software. You may have seen these licenses. They pop up on your screen when you install the software, or

sometimes they are printed on the outside of the envelope that the CD is packaged in. And, as with any license, the right to use the product comes with certain restrictions.

"People have tried these shrink-wrap licenses before, and sometimes theyre found as enforceable and sometimes not," said Rochelle Cooper Dreyfuss, professor at New York University School of Law.

Courts have viewed these shrink-wrap licensing agreements cautiously. In some cases, they have sided with software publishers when consumers have tried to do an end-run around the license. Owning the CD does not give you the right to make copies and sell them, for instance. But in other cases, the courts have held that shrink-wrap licenses are inherently unfair to consumers. A license is basically a contract. And shrink-wrap licenses force consumers to agree to a contract they cant even see until after they have already paid for the product. Further, virtually no retailer will accept open-software packages for return, which critics say makes shrink-wrap licensing appear even more unfair.


Thats where UCITA comes in (see the article "UCITA Rules Need a Closer Look" in the September issue of Government Technology). UCITA, or the Uniform Computer Information Transactions Act, is a piece of legislation designed by the National Conference of Commissioners on Uniform State Laws (NCCUSL). Maryland and Vermont have already passed it, and the bill is wending its way through several other state legislatures. Meant as an addendum to the Uniform Commercial Code, UCITA was designed to remove the gray area from existing laws, granting consumers certain rights in exchange for a universal agreement that shrink-wrap licensing is legal. "The purpose is to articulate some basic rules of contract that apply to the kinds of contracts that people are creating for transactions in computer information," said John McCabe, legal counsel for the NCCUSL. But consumer advocates are crying foul, claiming that UCITA fundamentally shifts the balance of power to software publishers at the expense of the consumer.

If you can judge a bill by its opponents, UCITA is a mighty piece of legislation. Consumers Union, the Consumer Project on Technology, 25 state attorneys general and the Federal Trade Commission are a small part of a long list of organizations that have criticized the bill. They are joined by Prudential Life, Principal Financial Group and

Caterpillar Inc., who oppose UCITA not as representatives from the insurance, financial and manufacturing industries, but as large-scale software consumers. And few industries license more shrink-wrap software than the government.

UCITA does give users some basic rights, including the right of return. "[If you dont like the license], you can take the product back. You get an automatic right of return," McCabe said. "And you get your money back. And if it has cost you anything with respect to loading and

unloading the software, you get those costs. UCITA also has a public-policy defense, which allows a court to look at specific terms of a contract and determine whether they violate public policy or not."

UCITA Rights

But the rights it grants consumers are far outweighed by the powers it gives software publishers, critics say. "The entire act is fundamentally biased in favor of large software publishers and against the consumer," said Vergil Bushnell, e-commerce policy analyst

Tod Newcombe  |  Features Editor