Uniform Law

Before the UCC and the UCITA, what was one of the first, and most significant, of the U. S. government’s attempts to promote uniformity in commercial laws from state to state? (Hint: think of `commerce` and Constitution) One of the initial and most important of all the attempts made by the U. S. government to promote uniformity in commercial laws across states, prior to the Uniform Commercial Code (UCC) and Uniform Computer Information Transactions Act (UCITA), is the inclusion of the commerce clause in Article 1, Section 8 of the United States constitution.The commerce clause provides that achieving and maintaining a level of consistency or uniformity in commercial transactions occurring in the different states involves the rallying of the states to refrain from the inconsistent regulation of national and international commercial activities or transactions. The underlying principle for this is that merchants or traders would experience great difficulty in trying to comply with many inconsistent state-level regulations for every single commercial activity encompassing different states.This means that a uniform federal-level regulation should govern interstate commerce. As such, states that implement discriminatory and inconsistent regulations on interstate commerce are not valid. States can freely impose regulations on commercial activities within their jurisdictions but these states cannot impose their regulations on commercial activities occurring on an interstate level if doing so would result to any undue burden upon legitimate commercial entities. (Carrubba & Rogers, 2003)The commerce clause applies to online commercial activities because online transactions comprise interstate commerce. The nature of the Internet, such as its broad scope and wide reach, gives rise to commercial transactions cutting across state jurisdictions. This means that online commerce requires a national system of regulation as envisioned by the commerce clause. (Carrubba & Rogers, 2003) However, the commerce clause involved the difficulty of articulating the manner of differentiating permissible and invalid state regulations.While it has been easy for the courts to determine discriminatory regulations, there is difficulty in considering the extent that a neutral state law imposes undue regulation on commercial transactions including online commerce. (Carrubba & Rogers, 2003) As such, there is a wide room for legislative and judicial clarification of uniformity in commercial regulations. 2. Based on the information presented above, what do you see as the major differences between Article 2 of the Uniform Commercial Code and UCITA? A number of significant differences exist between Article 2 of the UCC and UCITA.First, while Article 2 of the UCC primarily governs transactions arising between merchants, UCITA covers transactions between merchants such as customized software development and rightful acquisition of multimedia products as well as transactions between merchants and end-consumers involving online database access and software distribution (Brennan, 2000). Second, UCITA only governs contracts since it recognizes the principles of duress and fraud, allows the application of consumer protection statutes, works with antitrust or competition statutes, and aligns with consumer, intellectual property, and trade secret laws.Third, Article 2 of the UCC and UCITA apply standards for the courts to determine unconscionable contractual terms but UCITA takes it further by enabling the courts to invalidate over reaching terms that come in conflict with public policy. In addition, UCITA also enhances protection of licensee interests by requiring licensor compliance with notice requirements prior to the cancellation or disabling of licensed software in dispute situations as well as disabling ‘no-reverse-engineering’ in certain cases. Fourth, UCITA emerged as a uniform contract statute intended to cover particularly the newly emergent information economy.This is due to the recognition that electronic commerce or computer information transactions involve distinct expectations from the parties and industry policies and practices when compared to the commerce of goods. As an example, in a commercial transaction involving a car, the buyer gains exclusive right over the car after the due completion of the transaction but in a computer information transaction, the party obtaining the software may not have exclusive rights over the software or gain limited proprietary rights over the software.Concurrently, Article 2 of the UCC implicitly provides that the rights acquired on certain goods, for instance books and similar goods, depend on the terms of the contract while UCITA explicitly provides a similar provision for transactions within the information economy. (Heller, 2001) 3. What is the legal distinction between selling a product and licensing it? In the legal sense, selling and licensing find distinction through their basic elements.On one hand, licensing involves a legally binding agreement covering a grant of permission by one party for the other party to exercise a specific right or defined rights pertaining to a particular item or work. On the other hand, selling covers a valid agreement between contracting parties for one party to pass title or give an item or product in exchange for a specific price given by the other party. Based on these definitions of licensing and selling, it becomes apparent that the legal difference between these two transactions is the responsibilities of the parties and the implications of the transaction.In licensing, the licensor grants permission to the licensee to exercise the agreed upon rights on an item or work while in selling, the seller transfers title or ownership of the good to the buyer. In addition, licensing implies that the licensee does not gain full rights to the item or work since the appropriation of the item or work depends on the rights permitted by the licensor while in selling, full rights accrue to the buyer because selling involves ownership, possession, and proprietary rights.(Committee on Intellectual Property Rights in the Emerging Information Infrastructure & National Research Council, 2000) Apart from these distinctions, the governing law also differs, with selling of a work governed by copyright law and licensing of a work covered by contract law. Selling a material copy of an item or work constitutes the dominant means of transferring intellectual property from a seller to a buyer. Based on copyright law, the sale of intellectual property implies the full transfer of rights as owner to a copy of the work.As such, this provides a limit to the rights of copyright holders over the work sold so that the buyer gains the right to freely resell, rent or lend the copy purchased from the seller. Copyright law allows the full transfer of rights over intellectual property works and facilitates the spread of computer information. Licensing falls under contract law since the rights transferred depend on the terms of the agreement, which means that the identification of the scope and limits of the rights transferred makes the contract formation process crucial to licensing.Based on contract law, valid contracts constitute private agreements. The possible terms of the agreement encompasses a wide scope subject only to the limits of validity and enforceability under contract law. (Committee on Intellectual Property Rights in the Emerging Information Infrastructure & National Research Council, 2000) In relation to computer information, licensing involves the benefit of allowing the public to gain access rights to computer information products that is not possible through sale but licensing could entail stringent terms relative to selling.The UCITA addresses this issue by providing that licensing terms on consumer information commerce is valid as long as licensees provided token assent such as clicking buttons indicating agreement with the terms accompanying the consumer information or installing software. (Committee on Intellectual Property Rights in the Emerging Information Infrastructure & National Research Council, 2000) This is a uniform way of determining the enforceability of terms and conditions. 4.Many of the provisions in the UCITA were first proposed as a modification to Article 2 of the UCC. Why do you think the drafters decided to propose it as a separate and distinct uniform act? The drafters proposed UCITA as a separate act because there is need for separate rules on computer information products such as software that transfers a right or rights to intellectual property. While it is true, that Article 2 of the UCC also covers contracts over intellectual property rights, UCITA governs transactions not covered by Article 2 of the UCC.This means that UCITA focused on a niche, that of computer information, which is outside of the coverage of Article 2 of the UCC, considered by the drafters as a distinct area of commerce requiring its own statutory rules. This also implies that separating UCITA from Article 2 of UCC constitutes a sound option when compared to complicating the latter via UCITA integration into Article 2. The separation is feasible since legal construction through developments in jurisprudence has been able to distinguish contractual and intellectual property issues in determining disputes arising from these transactions.(Braucher, 2001) Drafters also identified other reasons for separating UCITA from Article 2 of the UCC. UCITA would facilitate the clarification and unification of regulations on computer information commerce such as software licensing. This would make it easy to manage licensing issues on computer information commerce. (New Jersey Law Revision Commission, 1999) The preferred mode of commercializing computer information is through licensing, which means that it would serve the industry and consumers to have a separate law that specifically provide legal guidance on licensing.The ease in copying and appropriation of computer information, particularly software, does not create an exact and efficient fit between Article 2 of the UCC, which is the law governing the commerce of goods, and computer information. (Braucher, 2001)ReferencesBraucher, J. (2001). UCITA-Uniform Computer Information Transactions ACT. Briefing Paper for the National Conference of State Legislatures, Costa Mesa, CA, March 2001. Retrieved April 23, 2008, from http://www. ncsl. org/programs/lis/cip/CIPCOMM/braucher0301. htm Brennan, L. E.(2000). Why Article 2 cannot apply to software transactions. Duquesne Law Review, 38(2), 459. Carrubba, C. , & Rogers, J. R. (2003). National judicial power and the dormant commerce clause. The Journal of Law, Economics, and Organization, 19(2), 543-570. Committee on Intellectual Property Rights in the Emerging Information Infrastructure. , & National Research Council. (2000). The digital dilemma. Washington, DC: The National Academies Press. Heller, J. S. (2001). UCITA: Still crazy after all these years, and still not ready for prime time.The Richmond Journal of Law and Technology, 8(1). Retrieved April 23, 2008, from http://law. richmond. edu/jolt/v8i1/article5. html New Jersey Law Revision Commission. (1999). RE: Uniform Computer Information Transactions Act (“UCITA”). Memorandum from the staff to Commission. Retrieved April 23, 2008, from http://209. 85. 175. 104/search? q=cache:tw3JhEL37GMJ:www. lawrev. state. nj. us/ucita/M991206. doc+the+major+differences+between+Article+2+of+the+Uniform+Commercial+Code+and+UCITA%3F&hl=tl&ct=clnk&cd=6&gl=ph&client=firefox-a