August 7, 2002

Amendments to UCITA approved

Amendments to the Uniform Computer Information
Transactions Act (UCITA) were approved by the National Conference of
Commissioners on Uniform State Laws (NCCUSL) at its 111th Annual Meeting
just concluded in Tucson, Arizona, to address concerns expressed by various
interest groups.
Highlights from the amendments are:

1. Electronic Self-Help Banned. Vendors (called licensors mainly) of
digital information, including software, may not disable the use of that
information by electronic means if there is a breach of an information
contract. Vendors have an expedited remedy for a material breach of
contract in a court of law.

2. A State's Consumer Protection Law Trumps UCITA. An information contract
is expressly subject to and may not waive any consumer protection provided
in state or federal law. Included are laws providing for conspicuous
disclosure, unfair or deceptive trade practices laws, and laws relating to
electronic signatures and records.

3. Right to Criticize Protected. Information contract terms that prohibit
criticism of an information product are unenforceable. Parties may contract
in a manner consistent with other law such as the law of trade secrets.

4. Remedies for Known Material Defect Preserved. Remedies for a known
material defect of a product are expressly made available as fully as for
defective goods or services.

5. Reverse Engineering for Interoperability Expressly Authorized. An
information contract may not prohibit reverse engineering that is done for
the purposes of making an information product work together with other
information products.

6. Special Open-Source Software Provisions. Open-source software is
expressly not covered by the Act if only copyright permission is given and
is not part of a contract. If there is a contract, there are no implied
warranties if there is no commercial gain from the transaction.

UCITA is the first uniform law governing information contracts. It adopts
accepted and familiar principles of commercial contract law, and provides
fundamental rules for licensing contracts between users and vendors. It has
been enacted, to date, in Maryland and Virginia.

The National Conference of Commissioners on Uniform State Laws is now in its
111th year. The organization comprises more than 300 lawyers, judges, and
law professors, appointed by the states as well as the District of Columbia,
Puerto Rico, and the U.S. Virgin Islands, to draft proposals for uniform and
model laws and work toward their enactment in their legislatures.

For further information, please contact John McCabe or Katie Robinson at
312-915-0195, or Gabrielle Bamberger at 212-333-5222.

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