Re: Copyright and UCC 2B

The tensions to which Mark refers exist and yet are difficult to specify. AS a member of the UCC 2B Drafting Committee, I have posed some. These include: <1> Premise that use of license label to escape operation of first sale doctrine makes software contracts 'true licenses' in the sense that transfers of individual copies includes transfer of some interest in copyright.

This constitutes the basis for many provisions. E.g., license concept, i.e., a transferor's covenant not to sue licensee, means that transferee is entitled only to expressly authorized, necessarily implied, or mutually understood uses of program copy. Further of that, license may expressly prescribe uses, including use of copy to reverse engineer code.

Similarly, b/c a license, rights thereunder are personal and may not be assigned or transfered to another person. Thus far, though recent work is narrowing these effects, the text of the statute makes it a breach of contract to give a lender/financer a security interest in program copy or to convey copy and right to use in connection with asset sale of business to another -- unless permission is obtained from licensor (who might, e.g., impose a license transfer fee as condition of approval).

<2> On agenda for FEb 21-23 DRafting Committee meeting in Atlanta is
the licensor self-help provision: so long as contract, including almost always enforceable standard form, contains authorizing term, licensor may use remote electronic self-help to prevent program use in event of licensee's material breach. Limited by -- not permitted where doing so involves breach of peace, causes personal injury, or damages information of licensee. But no remedy specified for personal injury or breach of peace; and since physical intrusion is not required, breach of peace as previously known not likely to occur; and liability for misuse limited to damage to information of licensee (i.e., excludes injury to business thru shutdown, damage to software of another licensor -- for which licensee presumably would bear risk).

Point: this is additional to provision which provides for obtaining judicial order to terminate use, etc. As to copyright, court order may be sought under the 1976 Act, and granted if certain conditions are satisfied. 2B draft would allow self-help use prevention for act that constitutes both breach of contract and infringment of copyright -- as well as provide option to seek judicial order.

<3> I need to point out that the draft defines a catagory of "mass
market license" -- definition yet subject to refinement -- and the above and some other provisions either do not apply or have limited application in that realm. In many respects, mass market licenses are treated as transfers equivalent to sales -- a matter which many software industry participants in the process characterize as a "give up" or a "concession" in light of the fact that software copy transfer contracts are mere licenses.

<4> There are some interesting and controversial provisions, especially
in 2B-616, concerning development contracts. These pertain to who has what rights in programs developed under contract pursuant to specifications ... and rights to use routines, etc developed in course of performance even where contract specifically provides that copyright in completed work is in the party that commissioned its development.

The work and meetings of the Drafting Committee are open to the public and participation in discussion by attendees. WRittend comments may be addressed to the Reporter, Professor Raymond Nimmer at the University of Houston School of Law and should be copied to the Committee Chair, Carlyle Ring, Esq at Suite 600, 1577 Spring Hill Road, Vienna, VA 22182.

Comments filed by others, and memoranda submitted by Committee members, are being posted at

   http://www.SoftwareIndustry.org/issues/guide/

and the names and addresses of all Drafting Committee members and persons who attend (or have attended recent) Drafdting Committee meetings also are listed there. Those listings identify participants' affiliations, also.

I you submit written comments, try to do so at least three weeks in advance of the Drafting Committee meetings in order to assure circulation to all; or send copies to all Committee members listed at the aboveidentified  WWW site.

David A. Rice

     Professor of Law, Rutgers-Newark School of Law (on leave 1996-97)
     Visiting Prof of Law, Roger Williams Univ School of Law (1996-97)
        Ten Metacom Avenue
        Bristol, RI  02809

        (401) 254-4623		Fax: (401) 254-4640
        drice[_at_]world.std.com

P.S.  The project is on a fast track.  There is a full working draft 
      which will be presented for 2d Reading (two required) at the 
      July '97 Annual Meeting of the National Conf of Commissioners 
      on Uniform State Laws.  Anticipating that, the Drafting 
      Committee will meet Feb 21-23, again for 2.5 days in April, 
      perhaps also in March, and again May29-June 1 -- the latter 
      being between presentation of the draft to the American Law 
      Institute Annual Meeting in May and the mentioned later 
      presentation at NCCUSL's Annual Meeting.  Time to study the 
      draft and provide input is right now!!