Drama in the Licensing Department

Several people have noted the beginning of a class action lawsuit against Microsoft, Symantec, and numerous software retailers in California. Ernie linked the CNet News.com story this morning, and Kevin Heller has a link to the complaint [PDF].

The shrinkwrap licensing paradigm seems fraught with potential legal problems. First, these are the ultimate form contracts. Courts worry about form contracts drafted by businesses as the "standard" contracts for consumers. That alone doesn't mean that courts throw those contracts out, but they eye them with suspicion, and construe them against the drafter when ambiguity arises. Now add the fact that the customer does not see a 'shrinkwrap' contract until after purchasing the product. How many other circumstances can you think of where the exchange of money happens before both parties are aware of the terms of the deal? So much for "offer-acceptance-consideration?" Then consider the oppressive terms that software companies often write into their standard licensing 'agreements.' The fact that the retailer wouldn't take the media back from a consumer who does not agree with the terms (contrary to what almost all licenses say the retailer will do) might be the straw that breaks the camel's back, but it's still only one problem among many. The complaint alleges that pushing these kinds of terms on consumers in this fashion amounts to fraud and several violations of California's consumer protection laws. I've been expecting a case like this for a while, and I'll be curious to see how it plays out.

Meanwhile, in another topic-related turn of events that Ernie noticed, several sections of the American Bar Association again declined to put their stamp of approval on a proposed uniform act that would have made it a lot easier for for software manufacturers to push onerous licensing terms on consumers.

The National Conference of Commissioners on Uniform State Laws (NCCUSL) several years back drafted the Uniform Computer Information Transactions Act (UCITA), which my copyright professor always pronounced to sound like "You Cheater."

The idea behind a proposed Uniform act is that most or all state legislatures will adopt the law, and the resulting uniformity among state laws will make doing business or adjudicating disputes between states a lot easier for everyone. Some great and very effective examples include the Uniform Commercial Code (UCC), Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA), its predecessor Uniform Child Custody Jurisdiction Act (UCCJA), and the Uniform Interstate Family Support Act (UIFSA). [Why yes, I've done some domestic relations work, why ever would you suspect that?] The U.S. Congress might put its rubber stamp on the Acts, but because they cover matters of state law, it's up to individual states to adopt uniform acts into law with whatever modifications they see fit to incorporate.

The problem with UCITA is that it would indeed have made interstate transactions easier, but only for software distributors. Meanwhile, it would have changed the substance of the law in a fashion inhospitable to consumers. Maryland and Virginia did adopt versions of UCITA, and I think it's on the calendar for discussion in at least one more state (Oklahoma?), but the fact that six sections of the ABA wouldn't endorse the act will likely deter more states from adopting UCITA.