UCITA Passes Maryland House

WASHINGTON (03/29/2000) - The Maryland House of Delegates has passed and sent to the Senate a controversial bill that has the support of large software vendors, but has upset consumer advocates for software users, along with libraries and small businesses.

The Maryland House yesterday voted 83-50 in favor of the Uniform Computer Information Transactions Act (UCITA), which supporters say is necessary to bring uniformity to software licensing contracts and a common understanding of software licenses across the 50 states.

The bill now moves to the Maryland Senate, which has already held a hearing in the Senate Finance Committee on its own version of the UCITA bill. The bill will be discussed again this week by a working group led by Sen. Leonard Teitelbaum, a Democrat from Montgomery County and a sponsor of the Senate bill.

"The work we will be doing between now and end of the session (on April 10) will be work that ... would improve the bill to make it more consumer friendly," Teitelbaum said.

The working group will consider changes to the bill, including provisions designed to give Maryland residents certain protections in the event of a dispute over a software license. The group also will discuss issues affecting developers whose job is to re-engineer software, Teitelbaum said. Lawmakers will consider ways to ensure that developers would not place themselves in legal jeopardy by doing their jobs, which requires them to have access to software code made available by the owner.

Supporters say UCITA is important because it establishes rules for the licensing of software and information products and would replace a patchwork of licensing laws in each of the states. They also say the bill would provide greater protections for companies and individuals who license software and would set clear procedures governing a software manufacturers' ability to take action against users who don't maintain proper licenses.

Opponents of the legislation say it's too broad and would impose uncertainty on the rights of individuals, and especially small businesses and libraries, to use licensed software. They also contend the software companies' products already are protected under the federal Digital Millennium Copyright Act.

Skip Lockwood, director of For a Competitive Information and Technology Economy (4Cite), unsuccessfully fought the bill in Virginia before that state's legislature passed the bill last month. [See "Software Licensing Bill Moves Forward in Virginia," Feb. 16.] Virginia Governor James Gilmore signed the bill, [See "Virginia Governor Signs UCITA Legislation," March 14.] which faces further review there by the Joint Commission on Technology and Science before it takes effect July 1, 2001.

However, there is no review provision in the bill that passed the Maryland House of Delegates, meaning that it takes effect immediately. Teitelbaum said there were no plans in the Senate to add a provision delaying the effective date of the bill.

Maryland Governor Parris Glendening urged the General Assembly to consider UCITA legislation in his Internet policy recommendations submitted in January, but Teitelbaum said the governor has not pressured the Senate to get the bill passed. Glendening's office did not return a phone call seeking comment.

Lockwood said that his organization narrowly failed to have amendments passed in the Maryland House of Delegates that would have established that state as the venue for any software license disputes.

Under the bill as passed by the House of Delegates, disputes would be assigned to the jurisdiction named in the software license, which could be a distant state. Lockwood and other opponents say this would be unfair to average users, and he says it also is unfair because such terms are contained in license agreements that people usually cannot read before purchasing shrink-wrapped software.

"We were essentially strung along because the issues we brought up were in no way seriously considered, nor were any of our recommendations used," Lockwood said.

While its campaigns to defeat UCITA bills in Virginia and Maryland have been unsuccessful thus far, Lockwood said his organization has fared better in California and Illinois, which have tabled UCITA legislation, and in Iowa, which has considered a bill that says UCITA-bound software licenses would not be recognized in the state, Lockwood said.

Keith Kupferschmid, intellectual property counsel for the Software & Information Industry Association (SIIA), said the organization isn't completely satisfied with the House bill and hopes it will be amended in the Senate.

Specifically, SIIA is concerned about an amendment added by the House that would require vendors to wait three days before they could terminate access to software if there is a breach of the license.

If the breach is failure to pay, vendors agree that there should be a required waiting period, Kupferschmid said. But if the issue is software that has been pirated and is being illegally redistributed, vendors should be able to terminate access immediately, he said.

4Cite can be found on the Web at http://www.4cite.org/.

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