Agenda for the 2004 Annual Spring Meeting

The Uniform Commerical Code Committee and the Technology and Telecommunications Committee will combine to present a discussion of the Uniform Computer Information Transaction Act (UCITA), also known as Article 2B of the Uniform Commercial Code. UCITA was developed in order to update commercial law with respect to products and services involving computer information. This includes the sale and licensing of software. The program will include a general description of the history and fundamentals of UCITA. The interaction of UCITA and the Bankruptcy Code will also be addressed.

Now UCITA, Now You Don’t
A Bankruptcy Practitioner’s Observations on the Proposed Uniform Computer Information Transactions Act
Written by: Daniel A. DeMarco and Christopher B. Wick

In 2004, we often take for granted the magic wrought by computers. While computers have made many machines (also, businesses and industries) disappear, so too has the primary legislation proposed to address transactions involving computer information all but disappeared. Yet the developments in the computer age that 12 years ago spawned the effort to create the Uniform Computer Information Trans-actions Act (UCITA) and the issues they raise persist. They may be coming soon to a bankruptcy court near you.

UCITA began as a proposal for a uniform commercial code that applies to any contracts for computer information (such as the licensing of computer software or databases). The American Law Institute (ALI) and the American Bar Association (ABA) jointly conceived UCITA for the laudable purpose of bringing uniformity and certainty to the rules that apply to software transactions. At some time during the past 12 years, however, certain constituencies, including ALI, began opposing UCITA for the stated reasons that it is heavily biased in favor of large software publishers and licensors. These oppositions culminated in the ABA’s rejection of UCITA and its relative disappearance. Yet today UCITA’s supporters maintain that the proposed law would provide much-needed standards relating to the licensing of digital information. Although it has not been adopted as a uniform law in the 50 states, certain state and federal courts have relied on UCITA in addressing disputes involving computer information transactions. The purpose of this article is to inform bankruptcy practitioners about the basic principles of UCITA, the support and opposition to its proposed rules, the types of issues UCITA seeks to address, and how UCITA could affect their daily bankruptcy practice.
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