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ACTION ALERT: Software Licenses 

Subject: ACTION ALERT: Software Licenses 

This action alert forwarded below may be of interest to a number of
members of this listserv and may involve licensing provisions that would
effect library licensing agreements with software manufacturers and
distributors as well as effecting consumers. 

Sincerely,
David Dillard
Temple University
(215) 204 - 4584
jwne@astro.temple.edu


---------- Forwarded message ----------
Date: Sun, 10 May 1998 22:55:56 -0700 (PDT)
From: Audrie Krause <audrie@netaction.org>
To: undisclosed-recipients:  ;
Subject: ACTION ALERT: Software Licenses

NetAction Notes
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Published by NetAction          Issue No. 37                   May 11, 1998	
Repost where appropriate. Copyright and subscription info at end of message.
* * * * * * *                         

In This Issue:
ACTION ALERT: Proposed Law Targets Software Consumers and Developers
About NetAction Notes
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

ACTION ALERT: Proposed Law Targets Software Consumers and Developers
- Act now to protect your consumer rights when purchasing software!
- Act now to protect your developer rights to make competing programs!

* * * * * Circulate this action alert through July 31, 1998 * * * * * 

Consumer action is urgently needed to prevent the adoption of commercial law
changes that will exempt software purchases from traditional consumer
protection laws, enable the software industry to dictate the terms of
software purchases by validating "shrinkwrap" licenses, and threaten the
rights of software developers to make competing programs.  NetAction is
urging consumers and software developers to immediately contact the American
Law Institute (ALI) and the National Conference of Commissioners on Uniform
State Laws (NCCUSL) and demand that adoption of UCC Article 2B be delayed
until the language can be revised to address consumer concerns.

Consumers can fax the request for a delay to ALI and NCCUSL from NetAction's
fax server, at: <http://www.netaction.org/fax/>, or write to them at the
addresses listed below.  Faxes and letters should be sent to the two
organizations through July 31, 1998. 

===== Background on the Issue

Q: What is the Uniform Commercial Code?

A: According to Cem Kaner, a consumer-oriented attorney who has been
participating in discussions about the proposed amendments, the UCC is the
dominant commercial law in the United States, and is also the basis for the
Convention for the International Sales of Goods, which governs international
commerce.  Software industry representatives and consumer advocates have
been working for more than two years on amendments to the UCC to govern the
sale of software.

Q: Why should consumers be concerned about the UCC?

A: Amendments are being proposed to the Uniform Commercial Code (UCC) which
would replace existing customer protections with new rules governing not
just the sale of software, but its development, documentation, licensing,
support and maintenance.  The proposed changes, referred to as Article 2B,
would also expand the intellectual property rights of software publishers
and -- in the words of one software developer -- make it possible for
software companies to "screw over their customers."

Q: What will the proposed amendments mean to consumers who purchase software?

If Article 2B is adopted as proposed by the software industry, consumers who
purchase software will, in the process of installing the software, be
consenting to a legally binding licensing contract that was not disclosed to
them when they made the purchase.  Consumer protection laws generally
provide that, if there are conditions or terms associated with the purchase
of a product or service, these conditions or terms must be disclosed to the
consumer at the time of purchase.  Article 2B lets software publishers avoid
disclosing the terms associated with use of their software until *after* the
consumer has purchased and installed it.  

Todd Paglia, an attorney with Ralph Nader's Consumer Project on Technology
(CPT), explains why this provision is a bad idea:

"In a typical software transaction, how many purchasers will realize the
following:  1.  Although it seems as though the product is simply being
installed, they are being asked to consent to a license, and 2. The license
is legally binding.  Relatively few purchasers will realize either of these
points.  But how many of this small group will know that, even though they
already paid for the product and have begun installation, they are able to
refuse to agree to the license terms and return the product for a refund?
Even fewer purchasers would make it to this point.  Assuming that a
purchaser gets this far, what have they accomplished?  They have to start
the process all over in the hopes that their second choice product will have
more reasonable license terms.  This system will exhaust even the most
persistent consumers and it is unworkable." 

Q: Are there other provisions in Article 2B that would be harmful to consumers?

A: Yes, there are many other problems with Article 2B.  For example, an
early draft of Article 2B included language that provided some assurance to
consumers that software publishers would make reasonable efforts to
eliminate viruses from software purchased in stores (although no such
assurances were required for software purchased off the Internet).  But in
response to concerns raised by the industry, this minimal assurance was
deleted from the current draft, and with them any protection that might have
been afforded to consumers who purchase software from irresponsible sellers.
Moreover, software publishers would be able to include a waiver of any
responsibility for viruses in the license -- which as noted above would not
be disclosed to the consumer at the time the product was purchased.

Paglia discusses CPT's main concerns with Article 2B in a memo to the
American Law Institute, on the web at
<http://www.cptech.org/ucc/ali3-10.html>.  
More background on Article 2B is at <http://www.cptech.org/ucc/ucc.html>, 
and in James Gleick's "It's Your Problem (Not Theirs)" at:
<http://www.around.com/agree.html>.
  
Q: Will Article 2B effect the quality of software that consumers buy?

A: The quality of software is likely to decline if Article 2B is adopted.
According to Kaner:

"In its zeal to protect the worst software publishers from consequences
arising from their worst products, Article 2B will change the economics of
mass market software publishing as a whole.  The effect will be increased
pressure on publishers, especially mid-size publishers, to ship product
prematurely.  And let the customers eat the cost.  This is bad policy and it
will damage our industry severely over the long term."

Q: What effect will Article 2B have on software developers?

A: The proposed change threatens the rights of software developers to create
competing products.

Kaner has listed some of the issues that software publishers would be able
to include in their licensing agreements under Article 2B.  These may affect
software developers as well as consumers: 

- Prohibition against publishing detailed criticisms of the software.
- Prohibition against reverse engineering.
- Prohibition against decompiling the software.
- Prohibition (via the ban of reverse engineering) against developing
  products that are interoperable with this one.
- Restrictions on the nature or purposes of use of the product.
- Restrictions against competition.
- Publisher has choice of law (entirely unrestricted to whatever state
  or country the publisher chooses).
- Publisher has choice of forum (the publisher can choose that you
  have to sue them in Nigeria).

Kaner has written extensively on the UCC amendment, and his articles are on
the web at <http://www.badsoftware.com>.

Q: What can consumers and software developers do to ensure that traditional
consumer protections are applied to software purchases?

A: Amendments to the UCC must be adopted individually by each state.
Typically, this is accomplished by introducing a bill with the language of
the proposed UCC amendments.  Before this occurs, however, the proposed
amendments must be approved by the American Law Institute (ALI) and the
National Conference of Commissioners on Uniform State Laws (NCCUSL).  ALI
will be meeting on May 15 to consider the proposed amendments, and NCCUSL
will consider them at a meeting in late July.

Consumers and software developers can contact ALI and NCCUSL immediately and
urge them to delay adoption of Article 2B until it is revised to address
consumer concerns.  

NetAction has prepared a letter requesting a delay, which can be sent from
our fax server at <http://www.netaction.org/fax/>.

Or, fax or mail your own letter to:

Mr. Charles Alan Wright, President
Mr. Geoffrey C. Hazard, Jr., Director
The American Law Institute
4025 Chestnut Street
Philadelphia, PA 19104  

Fax: (215) 243-1664

and

Mr. Gene N. Lebrun, Chair
Professor Curtis R. Reitz, Secretary
Mr. Bion M. Gregory, President
National Conference of Commissioners on Uniform State Laws
676 North St. Clair Street, Suite 1700
Chicago, Illinois 60611

Fax: (312) 915-0187 

The complete current draft of Article 2B is on the NCCUSL web site at
<http://www.law.upenn.edu/bll/ulc/ucc2/2b498.htm>.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

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