Writing code: Origins of the Uniform Computer Information Transactions Act.

• Author: MYERS, JERRY T.

Beginning in the late 1940s, two of the nation's most prominent legal organizations, the American Law Institute and the National Conference of Commissioners on Uniform State Laws, crafted a series of fundamental business laws known as the Uniform Commercial Code -- the UCC. The United States was the world's leading manufacturing economy, and expansion of the interstate highway system would soon enable sellers to move goods quickly and affordably throughout the country.

Today, the United States faces an expansion of information technology. In 1996, the high-tech industry represented 6.2% of the U.S. gross domestic product. Compare that with automotive manufacturing and service, which represented 4.3%. Since 1996, use of the Internet has exploded. This electronic superhighway provides a fast and efficient channel over which computer-information transactions may be completed. For example, software developed in Research Triangle Park is instantly available via the Internet to potential customers across the country and the world.

New law for new products

As we move from an economy based on the manufacturing of goods to one increasingly reliant on the value found in information assets, concepts from goods law clash with those found in copyright and intellectual property traditions. Responding to this challenge, the National Conference of Commissioners on Uniform State Laws has embraced a new project, known as the Uniform Computer Information Transactions Act.

UCITA seeks to bring structure and certainty to the laws governing computer-information transactions. The drafters of UCITA have combined concepts and principles taken from the common law on contracts with those found in copyright and other intellectual-property traditions. Using the UCC Article 2 model familiar to most commercial lawyers, they have created a commercial code to facilitate transactions in the new information economy.

As its name suggests, UCITA will apply to transactions involving computer information, such as software licenses and data-access contracts. UCITA does not apply to transactions simply because they are entered into electronically or because they involve the Internet. For example, UCITA would not apply to a contract to purchase jeans from the Lands End Web site, but it would apply to the software license you enter into with your Internet access provider.

Unique characteristics of software

In a typical old-economy goods transaction, the buyer acquires from the...