Introduction
The Uniform Computer Information Transactions Act (UCITA) proposed revisions to the Article 2 of the Uniform Commercial Code (UCC) for meeting the demands of digital age by providing a viable legal framework for the information transactions. Focusing on the information licensing and protecting the rights of both producers and consumers, UCITA was rather controversial due to its confusing definitions and conflicting principles.
Major differences between the Article 2 UCC and UCITA
Applying to the laws of electronic transactions, UCITA was intended to amend UCC Article 2 which was drafted long before the advent of digital products. The most important difference between the two acts is UCITA’s exclusion of the information from the scope of goods regulated by the UCC Article 2. The main principles embodied in UCITA for meeting the demands of the digital era include the issues of advance disclosure and active assent regarding the standard terms of market policing. “Undisclosed defects, security holes, and spyware have been imposing huge costs on business customers that are often unknown to these customers in advance” (Winn, 2006, p. 186).
The requirements of disclosing the known defects of products and informing customers on transmissions of information from their systems were intended to deal with these problems. Another domain covered by UCITA provisions is the protection of customers from the possible unreasonable remedies and remote disabling of products by the sellers. Along with the consumer protection, the amendments were intended to protect the fair use of products by regulating the issues of the public domain and copies transfers. Thus, UCITA covers all deals dealing with computer information and intends to protect the rights of both consumers and producers by specifying the terms for their effective interaction.
Legal distinction between selling and licensing
Taking into account the significant differences between the information transactions and deals involving other types of goods, UCITA outlined the specific rules for the licensing arrangements applied to the information transactions. The legal distinction between selling and licensing is significant. The transaction of selling presupposes a complete transfer of the ownership rights to the customer, while licensing allows only a limited transfer of rights. “UCITA provides that conveyance of ownership rights in a copy of computer information does not transfer ownership rights in the underlying information” (Winn & Wright, 2008, p. 22). The software licensing was initially included into the process of the UCC Article 2 revision, but the failure of this approach preconditioned the formation of a separate UCC Article 2B committee.
The reasons for making UCITA a separate uniform act
The decision to propose the UCITA as a separate uniform act instead of limiting it to modifications of the Article 2 UCC can be explained with the failure of the revised version to provide a viable legal framework meeting the demands of modern business practices involving the computer-information transactions. The attempts to exclude the information from the amount of the deals regulated by the UCC Article 2 caused only more confusion with the terms and definitions.
Due to the inappropriateness of traditional business practices of selling arrangements for dealing with the information transactions, the prolonged revision process reduced the overall clarity and coherence of the UCC provisions without providing an effective solution. However, the UCITA was also criticized for its redundancy and the lack of efficacy gains for both consumers and producers and even was defined as commercial calamity (Braucher, 2007, p. 131). Thus, UCITA was a significant part of the legislative process intended to provide a clear set laws for regulating the issues of the computer information transactions.
Conclusion
In general, it can be concluded that along with the benefit of excluding the information from the list of other goods and outlining the information licensing, UCITA has certain drawbacks which require further consideration.
Reference List
Braucher, J. (2007). Under the surrounding circumstances: Amended article 2’s redundant (or worse) electronic commerce provisions. Ohio Law State Journal, 115 (68): 115-130.
Winn, J. (2006). Consumer protection in the age of the ‘information economy’. Burlington, VT: Ashgate Publishing Company.
Winn, J. & Wright, B. (2008). Law of electronic commerce. Wolters Kluwer Law and Business.