As predicted, the sensation-seeking media (alas, even some of the so-called “technical” or “computer” press) have jumped on some of the provisions of the Uniform Computer Information Transactions Act (UCITA) with both feet. No provision of the model statute has received so much trampling as Section 816, entitled “Electronic Self-Help.”
I doubt most of the commenters have read this section because, if they had, their diatribes would not be riddled with so much misinformation. Ironically, the self-help clause is one of the provisions that should be most helpful to medium-sized businesses and organizations like school districts, because it will rule out the use of self-help in all but the most egregious breach of license cases.
The basic idea of electronic self-help is that the seller (the licensor) can stop the user (the licensee) from using software in violation of the contract between the parties. Once the licensee has broken the terms of the deal, the licensor has a right to “retrieve” his product.
In the case of computer software, taking back the disks or tapes on which the product was delivered might be of little use, since the program was probably copied to the user’s hard drive, server, or mainframe. Shutting down the program or rendering it inoperative, no matter where it resides, is much more effective.
But before the average software customer or public school purchasing agent gets upset about electronic self-help, he should understand some basic facts.
For one thing, self-help is already used in one area of consumer software. Many demonstration programs have a built-in “cut-off” date, after which the trial program shuts down. Other demo software allows a limited number of “loads,” or instances of use. The customer can disable these “off” switches by purchasing the regular version of the program that either replaces the demo disk or provides the customer with a code that can be entered to activate the unrestricted program.
The UCITA provision puts severe limits on self-help, making it an unwieldy and complicated remedy at best. Other than demo software, it has almost no utility except in cases of custom-developed software or high-end (expensive) programs.
How is the consumer better protected under UCITA? First, by making it impossible for a customer to be unaware that a self-help system is included in the software. The model statute requires that the customer must consent to the inclusion of self-help.
Some media critics have tried to make you believe that consent to a self-help “time bomb” can be buried in the fine print of a lengthy license agreement or salted into a “click wrap” agreement. Since most consumers unwrap packaged software without reading the license or click “AGREE” to the license agreement in downloaded or installed software, these uninformed critics say it is easy for licensors to put one over on unsuspecting customers. Not true.
Section 816 requires that the customer “separately manifest assent.” In other words, the purchaser has to agree to a special self-help provision in addition to signing off on the license as a whole. This provision must include the name of the licensee (or someone designated to receive notice) and a place where notice can be delivered. The licensee must be able to easily change these designations. This can’t be done in a simple shrink wrap or click wrap license.
Second, before the self-help button can be pushed, the licensor must give actual notice to the licensee. The proposal would require that the self-help mechanism can’t be used until 15 days after notice has been received by the customer. The licensee must also be given a phone number, fax number, or eMail address where the licensor can be reached to dispute the alleged breach of the license. The licensee is also entitled to an expedited hearing in a state court.
But the biggest hammer a customer can hold over a licensor, and the real deterrent to unwarranted use of self-help, is the provision allowing a customer whose software has been wrongfully disabled to collect damagesand not just direct damages, but also incidental and consequential damages. In simple terms, using a software “off switch” when the customer is not demonstrably in breach of the license could cost the licensor big bucks.
To make it even tougher, the proposal also says that the customer’s rights under Section 816 can’t be waived, so that a licensor cannot trick a customer into signing away these protections.
I’m sure there are some valid arguments against some aspects of UCITA, and this column will continue to explore some of the more controversial provisions. But before critics put their feet down too hard on the self-help provisions of Section 816, they ought to at least read and understand its provisions, as well as the practical barriers to using this remedy in most situations. It may seem to be an easy target, but most of the critics who try to stomp on Section 816 end up with their feet planted squarely in their own mouths.