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Information technology accounts for more than one-third of the nation’s economic growth and is the most rapidly expanding component of the U.S. economy. According to the Department of Commerce, by 2006, almost half the U.S. work force will be employed by industries that are either major producers or intensive users of information technology products and services. UCITA is an attempt to provide clear, consistent and uniform rules governing the intangibles of transactions involving computer information. Unfortunately what is good for the big-time software manufacturers and the overall computer industry is not always good for libraries and library users.

These are the major topic areas that I plan to cover this morning.

The Uniform Computer Information Transactions Act or UCITA is a proposed new uniform law approved in July 1999 by the National Conference of Commissioners Uniform State Laws (NCCUSL) dealing with software and database licensing issues that cover contracts involving computer software, documentation, databases, websites, e-books, movies, and sound recordings. UCITA is intended to codify and standardize state contract laws that concern the practices of using signed licenses, shrink-rap licenses, and click-through licenses on software, databases, and websites. A proposed Uniform Law must be adopted by each state legislature before it becomes law in that state. It is expected that UCITA will have been introduced in the legislatures of all 50 states during the next 18 to 24 months. Florida, where I am from, has put UCITA on the legislative agenda for this session.[more later]

UCITA’s scope is rather broad, especially considering the current trends in delivery of information. UCITA is clearly going to apply to more and more of our information resources as time goes on. UCITA applies to computer information only transactions and, in mixed transactions that include both computer information and other matters (such as services), and to the entire transaction only if computer information is the primary subject matter. Some of the criticism of UCITA concerns its broad definition of computer information, that is, “information in electronic form which is obtained through the use of a computer or which is in a form capable of being processed by a computer.” UCITA applies to contracts to license or buy software, contracts to create computer programs or computer games, contracts for online access to databases and contracts to distribute information over the Internet.

UCITA is state-based rather than federal.

Because UCITA must be passed by each state legislature in order to be effective in that state, UCITA provisions may vary from state to state. It is possible to sign a contract that takes away rights granted under copyright law except in a few places (music residuals and a few similar instances).

The current U. S. copyright laws grant the copyright holder the exclusive rights over: reproduction, adaptation, publication, performance, and display. A limited, but nevertheless important in the library context, exception to the exclusivity of these rights is the "first-sale doctrine;" under the first-sale doctrine, a person who legitimately owns a copy of the original work, i.e., one who has purchased the work from or otherwise acquired ownership of the work with the permission of the copyright holder, has the full authority to "sell or otherwise dispose of the possession of that copy" so acquired without additional permission from the copyright holder.[ section 109(a)]. (This is one of the main legal premises that allows a library to loan the materials it acquires for its collection and thus function as it does today.) Thus, if a particular transfer of intellectual property is deemed to be a sale, then the owner of the copyright will have lost all control over that particular copy of the work. This is in complete contrast to the situation in which the copyright owner licenses a work, meaning that the owner of the copyright entered into a contractual agreement with another party regarding the use of the work, but not its ownership. Under a licensing agreement, the work has not been sold, but instead permission to use the work, within whatever specified conditions or guidelines may be set forth or defined in the license, has been established. And in this situation, the copyright holder has not given up any of his rights in the future use of the copy of the work involved, except to the extent he may have chosen to do so in the license agreement itself.

Assuming one accepts the premise that copyright laws are still important to ensure the advancement of knowledge through journals and other means of distribution, it is the licensing issues (i.e, the application of statutory commercial contract law governing the relationships of particular parties to particular contracts, as opposed to the statutory law principles promulgated in respect of the relations between the producers and the users of copyrighted works generally) that may fast be becoming the most important legal overlay to the digital library environment, more important even than changes in copyright law. Although copyright law and limitations imposed contractually through licensing both often share a common goal of protecting intellectual property, there are important distinctions in how these two legal constructs go about accomplishing their respective purposes, with which distinctions librarians must become increasing familiar. Ann Okerson sums up these differences cogently: “Copyright represents a set of general regulations negotiated through statutory enactment. The same laws and guidelines apply to everyone in the country. Licenses, or contracts, on the other hand, represent a market-driven approach to such regulation. Each license is arranged between a willing purveyor and a willing licensee, resource by resource. The owner of a piece of property is free to ask whatever price and set whatever conditions the market will bear. Source: Ann Okerson , "Copyright or Contract?" Library Journal 122 (September 1, 1997) p. 137.

In general, UCITA was developed to regulate business-to-business transactions in tangible goods. However, contract law increasingly impacts the everyday consumer as well as the business and library user. Concerns for copyright versus contract law include such things as a small business owner, a librarian, and a consumer using the same software may be subject to the same license restrictions, even though the ways they are using the software may be very different. Copyright law has always made fair use exceptions for educational use, research use, and criticism to name such a few exceptional areas. Opponents of UCITA fear the extinction of such fair use rights under UCITA. Librarians also fear clauses in contracts that prohibit lending materials or that prohibit activities or uses that librarians may make in preservation efforts. Can you store digital files locally or make paper copies for preservation purposes?

Proponents of UCITA argue that copyright laws will take precedence over UCITA, but federal copyright law does not necessarily preempt contracts. In fact, the general rule is that a negotiated contract is not overruled by copyright. In non-negotiated contracts such as shrink wrap and “click through” licenses to which a user has agreed by clicking on “ok” or “agree” when the license is displayed on the screen (usually in ultra-small type most of which is not viewable from the window provided) -- the courts have split on the issue. In my paper in the proceedings you will find a discussion of several court cases dealing with shrink-wrap and click-through licenses.

1. There is a problem in that there is typically no way of knowing who broke the shrink-wrap or clicked the “Agree” button. For example, is a corporation or library bound by a license if the custodian broke the shrink-wrap, or a 5-year old clicked the “Agree” button? 2. A major criticism of UCITA is that the proposal would allow software companies to restrict information about the product. Several companies do this currently as part of their licensing agreements, but UCITA would give this practice a legal grounding. For example, UCITA would let companies prohibit publication of criticism of their product. They could insert a clause such as “The customer will not publish reviews of the product without prior consent from XYZ Software Company.” Many writers and librarians are rankled by the thought that they might not be able to write product reviews because of these kinds of restrictions.

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3. If you violate your license under UCITA, the software/database vendor is allowed to use “self-help” procedures to deal with the violation. This means that you could have your database taken away or deactivated (with 15 days warning). Under the old system, the database producer would have to notify the library of the violation and then give the licensee a chance to correct the violation. However, even under UCITA, the product or database license has to stipulate the “self-help” provisions before this option can be used. Under UCITA, the licensor can, however, contractually decide when and what sort of license breach will be sufficient for it to invoke electronic self help. In August 2000, a change in UCITA was proposed that would not allow self-help deactivation respecting mass-market software sold through retail channels, though it would continue for sales to corporate or other “non-consumer “ users. Where a library falls in this new dichotomy is unclear. In a similar vein, license preservation and archival functions will be hampered if electronic products “disappear” upon expiration of the license.

Another issue of importance to librarians is that the license can restrict lending of the items. Because information products are generally licensed and leased from vendors, rather than purchased and owned by libraries, copyright law’s first sale doctrine does not apply. This means that libraries can no longer assume that they can legally loan software or cd-roms to library users. License provisions could eliminate the right of libraries to lend products, donate library materials, or to resell unwanted materials in the annual library book sale.

Suppose, for example, that you had purchased a copy of Bill Gates’ book The Road Ahead which comes with a CD-ROM. If you lend a patron the book with the CD-ROM, you may have just violated the terms of your licensing agreement. Lending the CD on interlibrary loan may also be a violation.

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A gray area not addressed by UCITA directly is the situation in which software is kept on reserve. If you check out software to a patron for use in a database, have you loaned the software? In other words, UCITA would allow a relatively easy way to curtail many typical current legitimate practices under copyright exceptions for fair use, first sale, and preservation. 2. Because licensing agreements are often not seen up front before electronic products are purchased, the library may be bound by provisions that it had no way of knowing about prior to purchase.

Virginia was the first state to pass UCITA but delayed its implementation until July 2001 to allow time for consideration of amendments. Maryland passed UCITA second but was the first state for it to become effective, on Oct.1, 2000. Thus, UCITA is not a theoretical, abstract proposal, but a real “flesh and blood” contender for the attention not only of legislators but also librarians, who must become both knowledgeable about it and aware of its many implications for the library community.

Some activity has occurred in a number of states, but those shown on the slide are the places where there is the most activity currently. Iowa did pass a law dealing with UCITA that protects its citizens from many of the possible consequences of UCITA, but the plan is still for UCITA to be considered this year or next in Iowa.

Most Legislators will not have much idea what UCITA is about, only that it is a uniform law recommended for passage by a seemingly authoritative agency. Make sure your legislators know that UCITA is unusually controversial and that those few states that have adopted it are already not uniform. Emphasize that there may be other revisions that may not be as bad and that delay is therefore prudent in order to await developments and avoid the necessity of addressing the issue yet again soon. Let them know also that the library/academic community are not the only ones interested -- that many important business groups are concerned also. Take steps to align yourself with these groups, such as Ins. Companies; they are likely to be far more influential than you because they have other interests actively at stake in the Legislature and they also can do more to assist if not ensure an individual legislator’s re-election. Finally, always consider compromise -- this is what the lawmaking process is all about and it is what legislators almost always dearly want to see happen. That is, they want to pass something that pleases ALL their constituents, at least to some degree.

Target what you see as UCITA’S worst abuses and suggest removal of them as a method of removing your opposition. If necessary, look to changing the wording to ameliorate the problems as well as can be done, and be sure the legislators know you are not intransigent--this will be especially helpful if the other side seems unwilling to compromise. You can thereby be seen as being more reasonable and will be perceived as more helpful to the legislators in working out a compromise, which is what they naturally want to do.

In the Tampa Bay area of Florida, we have prepared scripts for use by librarians at local community meetings, Rotary and Kiwanis Clubs, etc. to alert citizens to the concept of UCITA and the possible restrictions it could place on their use of electronic products and resources. Our emphasis is not just libraries but also the dangers for small businesses and users of electronic information.

Because UCITA provides that “click-on or click-through” agreements have the force of law, library staff from throughout any organization will need to read the “fine print” involved with any click-on” or shrink wrapped products. Acquisitions and processing staff who receive or check-in software, cd-roms, and other shrink wrapped materials will have to look carefully at the license terms that may be included in the packaging. Information technology staff who load new software or databases to the library system will need training so they understand terms included in the “click-on” agreements. These terms may include important information such as the length of the contract, copying privileges or the use of “electronic self-help.” It will be important for the library to have copies of all the software and database products licenses that have been agreed to and make a conscientious effort to see that the terms are adhered to by staff and library users. Sometimes it is difficult to get back to the licenses, so print them out as you go.