Client Alert

Enactment of UCITA in Virginia


Last week, the Virginia General Assembly adopted the Uniform Computer Information Transactions Act ("UCITA"). UCITA introduces many changes to the law regarding the licensing of "computer information," including computer software and databases. In particular, UCITA would render enforceable the terms of shrink-wrap or click-on licenses for computer information.

Although the General Assembly adopted UCITA, and Governor Gilmore has indicated that he will sign it into law, UCITA does not take effect in Virginia until July 1, 2001. Moreover, after the Assembly adjourns in mid-March, a subcommittee of the Joint Committee on Technology and Science ("JCOTS") will study the impact of UCITA on consumers and issue a report by the end of the year. The report may propose amendments to UCITA, which the Assembly could adopt before UCITA takes effect. In essence, this arrangement represents a political compromise. Virginia wanted to be the first state to adopt UCITA in order to show that it is friendly to e-commerce, but consumer groups and large corporate licensees raised serious concerns which the Assembly felt it had to address. This process allows Virginia to be first, yet gives it the opportunity to correct UCITA's shortcomings.

The Maryland legislature is also moving forward with UCITA, in large measure to demonstrate to the Internet firms in Northern Virginia and the Maryland suburbs of Washington, D.C., that Maryland is as e-commerce friendly as Virginia. Because the Maryland legislative session is longer than Virginia's, the Maryland legislature hopes to address licensees' concerns with UCITA this session. This way, Maryland will be the first state where UCITA takes effect.

Given that amendments are likely in both Maryland and Virginia, it may be premature to begin revising license agreements to comply with UCITA. However, the next few months may be the last chance to seek corrections for problems with the uniform law. Once Maryland and Virginia finalize their versions of UCITA, there will be political pressure on other states to achieve uniformity with Maryland and Virginia.





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