Sound Off: Why Protect the Software Industry?

BOSTON (05/31/2000) - Software vendors in Virginia must love their legislature. On Feb. 29, 2000, the state's General Assembly gave final approval to the Uniform Computer Information Transaction Act (UCITA), which Gov. Jim Gilmore, a staunch supporter of the high-tech industry, then gave his blessing.

UCITA was designed to provide uniformity to the myriad laws in different states that now govern the sale and licensing of software products. Opponents of the Act, which run the gamut from consumer advocacy groups to businesses that buy large amounts of software, worry that in addition to making contracts uniform, the legislation will give software publishers greater legal clout to enforce their "shrink-wrap" licenses, licenses that are so broad and unabashedly protective that many courts have failed to support them. One condition of some agreements, for example, forbids a software user from publishing a negative review of the product, regardless of the product's shortcomings. Another condition prohibits a company that is acquired by or merges with another company to transfer the software to the new corporate entity. Under UCITA, critics claim, vendors that believe their customers have failed to follow these and other conditions, will have legal recourse to enter their customers' computers and literally shut them down.

Predictably, software manufacturers like Microsoft Corp. and America Online Inc., and high-tech lobbyists like the Business Software Alliance, have been pushing hard for UCITA, arguing that if the software industry is going to continue to develop at the pace it has, manufacturers need to maintain certain controls.

The software industry, UCITA's supporters imply, needs protection from those consumers who want to use software without paying for it, copy and distribute it to their colleagues, and write unfair and negative product reviews.

Who are they trying to kid? Software may already be the single most powerful industry since Big Oil was made slightly less big three decades ago. According to a 1999 study conducted by the BSA, since 1994, software sales have grown 15.4 percent a year, while the gross domestic product has grown at a rate of only 5.4 percent. The study predicted that by the end of 2000, the software industry's contribution to the U.S. economy would be greater than the contribution of any other manufacturing industry. In 1997, the average salary for employees in software companies was $69,000, more than twice that of employees in any other private industry.

The fact is, software is so big and so powerful that it can make or break a state's economy, and politicians know it. If AOL, displeased with Virginia's high-tech policy, were to hightail it to Maryland, Virginia's economy would suffer. State legislatures are protecting software companies to protect themselves, not out of a concern over the software industry.

We know why politicians are passing legislation that protects software companies at the expense of individual and business end users. But we don't have to support them in doing it. This thread began on March 1, 2000, and here is a sampling of the responses that Senior Web Editor Martha Heller received.

You can respond to her by e-mail at mheller@cio.com or via the web at comment.cio.com.

The software companies as a whole need to be held accountable for the code they are selling--before any protections should be granted. I would guess that hundreds of millions of dollars are spent each year to fix or replace poorly written and bug-ridden software packages. It astounds me the level at which we, the consumer, put up with bugs, patches, versions and upgrades. I would like the software companies to be required to recall their software if a certain percentage of customers are negatively affected by its installation. Bret Richardson IT Manager Jore Corp. bretr@jorecorporation.com I do not think you are asking the right question. The question should be, Why are we passing legislation that circumvents free-market action? The software industry can be controlled by the action of the free market. When the software market tried to use widespread software protection devices and utilities, the marketplace stopped buying software from those companies that used them. In this case, the same thing will happen. Paul Lohnes Senior Consultant ITC phl99@ix.netcom.com Piracy and abuse will no more stifle the software industry than it will stifle the music, movie or book publishing industries--all of which have the exact same problem with unauthorized copying and copyright violation. Make no mistake: Software is no different from an electronic copy of a cookbook. The reason UCITA is protecting software is that, in a democracy, government goes where it's pushed, and software companies can afford to push constantly; and it is because they are rich that they can get protection. For the historians out there, see the Louis B. Mayer (MGM) income tax case. Congress passed a law just for him, lowering his, and only his, personal income taxes!

Software encryption will much more effectively protect software than any law, since pirates will violate whatever law there is anyway. The big issue to me is that even today software comes with a disclaimer instead of a warranty (note: the media are guaranteed, the code is not!) and under UCITA the user has even fewer grounds to sue or complain if the software is just a lot of expensive gobbledygook code that hardly works.

It is up to the users of software to stop UCITA in their home state legislatures and to stop accepting junk software. David P. Vernon Consultant CSI Staffing Inc. dvernon@ibm.net My company has made every effort to remain "pirate free" and has invested more than $1 million in software that works--for the most part. The fact is software is the work of people and therefore subject to human frailty and the desperate focus of the software company's management.

When all is said and done, there is good software and bad software marketed under the banner of "Universal Cure-All." The marketing efforts of software companies extend far beyond the functionality and reliability of their products. As purchasers, we rely on the claims of the manufacturer. My business law memories would have the manufacturer--not the purchaser--responsible for functionality claims. Libel is only libel if the statements are untrue.When you buy a license it's yours. Putting caveats on the sale or transfer of a license is nonsense. Albert T. Kruzel CIO akruzel@hotmail.com Do software companies need protection? Want to sound off on this or other topics? Join the ongoing debates at comment.cio.com.

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