UCITA and the continuing evolution of digital licensing law.(Uniform Computer Information Transactions Act)

In 1999, NCCUSL (1) promulgated the Uniform Computer Information Transactions Act (UCITA). This was the culmination of several years of intense debate concerning this proposed codification of basic contract law principles related to computer information transactions. During this debate and for the several years after 1999, UCITA was strongly supported by a large number of organizations, companies, bar groups, and individuals and opposed by a well-funded group of insurance and other companies, organizations, and individuals.

UCITA was enacted by over-whelming votes in two states (Virginia, Maryland) shortly after it was promulgated. (2) Thereafter, the opposition produced deadlock in a number of states, resulting in no further enactments over the past several years. At the instigation of lobbyists, several states enacted statutes that purport to preclude choice of law that includes UCITA. In 2002, UCITA was amended in several respects (the 2002 Amendments) in an effort to respond to some of the dispute. Although a number of former opponents withdrew, others did not. In 2003, NCCUSL removed UCITA from its priority enactment list, placing it in the same position as most other approved uniform acts, available and recommended for adoption by any state desiring to do so.

Current Status--Courts and Statutes

Viewed formally in terms of adoptions and existing opposition, the current status of UCITA is analogous to that of UCC and particularly Article 2 after it had been promulgated in the 1950s, except that UCITA achieved enactment in important states faster that did Article 2. When Article 2 (regarding sales of goods) was initially promulgated, it suffered over a decade of non-enactment and also generated passionate opposition. (3) That continued even after Article 2 had weathered its initial, long hiatus and had undergone revisions. One prominent author, writing in the 1970s, reflected on the ongoing intensity of the opposition to UCC Article 2 from at least one vantage point:

 
   Although it has been effective ... for only a 
   few years, [it] is being attacked with increasing 
   frequency. Charges are made of bias 
   against consumers and of favoritism toward 
   merchants, and angry rhetoric often erupts in 
   classrooms from new law students, highly 
   sensitive to the injustice and business bias 
   they perceive ... (4) 

Opposition to significant new ideas and delay in implementing them in the multistate political process followed in this country is not surprising or even new. Indeed, the surprise would be if it did not occur. For example, the recently completed project to draft revisions of Article 2 was completed four years later than UCITA even though that project began before the UCITA project. It was and continues to be marked by intense controversy that led earlier to discharging the original drafting committee and resignation by the original reporters. It remains opposed by virtually all industry and consumer interest groups and has not been enacted in any state. (5)

How is it that ideas, including the new law proposal that was UCC Article 2 in the 1950s, that were highly controversial were transformed to comfortable and accepted rules of law by the 1990s, so much so that any proposal to change those ideas is one of the reasons the proposed revision of UCC Article 2 is again being passionately resisted today? There is no single answer to that question, but the range of answers include the fact that over time what appear to be startling ideas become commonplace as practices continue and as judicial rulings and debates adopt them, directly or indirectly. That occurs when the answers and guidance the proposed laws provide become increasingly relevant to the modern practice. What once seemed entirely new becomes somewhat old, comfortable and acceptable.

So, if one measures the status of UCITA today in this context regarding the adoption and increasing comfort with its ideas, what are the results? In 2000, reports of "think tank" studies concluded that enactment of UCITA would provide benefits for modern commerce in digital information. (6) Studies by leading contract law scholars have concluded UCITA rules are fully consistent with modern contract law doctrine and practice. (7) At least two leading law school casebooks on commercial law integrate extensive coverage of UCITA with coverage of Article 2 and Article 2A of the UCC. (8) Other texts in the fields of both commercial and contract law include UCITA. A treatise on electronic commerce discusses general law along with UCITA to explain emerging law on that subject. (9) A leading multi-volume treatise on traditional commercial law extensively covers UCITA. (10)

Although UCITA has been law in Maryland and Virginia for several years, there has been (predictably I would say) no great upheaval in case law or commercial practice. Indeed, neither of these states has produced a single reported decision on UCITA since its enactment. Clearly, any prediction that there would be a massive and costly upheaval was wrong, as many of us knew that it would be. The mark of good contract law is that it produces little change in practices or litigation--it tends to codify what is already going on. While the courts of these two states have not …