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CIOs frustrated by increasingly expensive, sometimes kludgy software would be well-advised to pay attention to the status of the Uniform Computer Information Transactions Act as it wends its way through state legislatures. The legislation, already enacted in two states, could make it harder for enterprises to fight ISVs that attempt to sell software that doesnt work properly or to jack up prices, experts say.
UCITA, which is supported by many software vendors, including Microsoft Corp., was proposed by the Chicago-based National Conference of Commissioners on Uniform State Laws, a group of lawyers, judges and law professors that works to establish uniform state laws for software licensing. UCITA plays the same role for software licenses that the Uniform Commercial Code plays for the sale of goods and applies to software license and computer service transactions.
What has many CIOs up in arms is a key clause in UCITA that could allow vendors to shut off software at customer sites during the course of a contract dispute. Critics— including the Society of Information Management, an IT trade group in Chicago—charge that this gives vendors the legal authority to enter customers computers and shut them down if those vendors believe that customers have failed to follow the acts stipulations.
Experts warn that UCITA could also lead to security problems as ISVs attempt to monitor and measure software usage. UCITA could mean the introduction of security holes created by the insertion of backdoors into software through which vendors can monitor compliance.
“UCITAs recent introduction into several state legislatures creates a sense of urgency for CIOs and their teams to understand the potential ramifications of the act,” said Chad Robinson, an analyst at Robert Frances Group Inc., in Westport, Conn. “Customers will be faced with the bulk of the economic risks, rather than the vendors, as it is now.”
The controversial bill has already been enacted in Virginia and Maryland and has been introduced in legislatures in Texas, Oregon, New Hampshire, Maine, the District of Columbia and Illinois.
CIOs and software consumers, however, are fighting back in many states by putting pressure on state legislators to reject or change the act. And others are listening: In February, Virginia passed an amendment that forces vendors that want to cancel a contract to give users more than the 15 days notice stipulated by UCITA. Unfortunately, supporters say, amendments to the bill defeat the point of UCITA, which is to unify varying software licensing laws across states.
But amendments to the act present problems for CIOs as well. As early-adopter states add amendments and provisions to UCITA, CIOs will need to track changes. Thats because UCITA as originally drafted allows vendors to specify under which state laws their contracts are to be governed.
“CIOs should make sure they have ready access to staff with software contract expertise to guide their companies through the increasingly complex maze of software licensing,” Robinson said.