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Legal Arrangements for Use and Control of Real-Time Data (2011)

Chapter: Chapter 6: PROTECTION OF REAL-TIME DATA UNDEROTHER FEDERAL AND STATE LAWS

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26 decision support efforts. It is a centralized database con- I of the ECPA amended the Federal Wiretap Act so that taining data from various existing operational systems, it is applicable to the interception of electronic commu- providing the ability to combine data from two or more nications,293 whereas Title II of the ECPA created the systems and to access such data by way of common fields. Stored Communications Act (SCA) to cover unauthor- The DW is a query only database--no updates can be ap- ized access to stored communications and records.294 plied directly to it. To protect its right to the information collected, the LIRR has created the Data Distribution Pol- icy. 1. Federal Wiretap Act WMATA stated that it The Federal Wiretap Act295 proscribes the intercep- tion of electronic communications, as well as wire and has a draft data sensitivity policy that is currently under oral communications. Thus, the Act applies, inter alia, approval review. The policy provides explicit classification to any person who "intentionally intercepts, endeavors of information (data) and intended audience. It identifies certain types of documents as public, internal use only, to intercept, or procures" another person to intercept an proprietary, or confidential. Unless specifically desig- electronic communication.296 The Act also applies to nated for public consumption, all Metro information is to someone who intentionally discloses or uses or endeav- remain at Metro unless it is intentionally provided by an ors to disclose or use the contents of any electronic appropriate management authority or data owner to a re- communication knowing or having reason to know that questing party. the electronic communication was intercepted in viola- As for whether any outside developers have requested tion of the statute.297 An interception means the acquisi- or required any limitations on the disclosure of data to tion of an electronic communication "`through the use of anyone beyond the agency's or developer's control or any electronic, mechanical, or other device'"298 contem- supervision, 34 agencies responded that no such re- poraneously with the transmission of the electronic quests had been made of them. The Maryland Transit communication.299 Administration stated that "[t]he developers of our real- Section 2520 authorizes a civil action for an intercep- time systems require [the] execution of licensing tion, disclosure, or intentional use of an electronic agreements that limit use beyond MTA business pur- communication in violation the Act. A plaintiff may poses. Generally this applies to software, but not neces- seek preliminary and other equitable or declaratory sarily the data." BART stated that it "does not out- relief; damages, including punitive damages in appro- source the collection of real-time data, so `rights' are not priate cases; and "reasonable attorney's fees and other in dispute as with other agencies using third-party litigation costs reasonably incurred."300 technology for this task." 2. Stored Communications Act Guidance Number 14 Section 2701 of the SCA prohibits the intentional ac- Transit agencies' responses to the survey indicated cessing of electronic data without authorization or in that they would rely mostly on their contracts and pos- excess of one's authorization.301 Section 2701(a) applies sibly use some copyright-like controls, such as data en- to anyone, except as provided in subsection (c), who cryption, to protect real-time data. No transit agency "intentionally accesses without authorization a facility suggested that it would attempt to copyright real-time through which an electronic communication service is data as a compilation or database. provided; or...intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or pre- VI. PROTECTION OF REAL-TIME DATA UNDER vents authorized access to a wire or electronic commu- OTHER FEDERAL AND STATE LAWS nication while it is in electronic storage...." Section 2701 prohibits only unauthorized access and not the misappropriation or disclosure of information.302 A. Electronic Communications Privacy Act The Electronic Communications Privacy Act (ECPA), 100 Stat. 1848 (1986) (codified at 18 U.S.C. 1367, 2510­2521, although a criminal statute, creates a cause of action 2701­2710, 3121­3126 (2000)). for damages and other relief against electronic tres- 293 291 United States v. Steiger, 318 F.3d 1039, 1046 (11th Cir. passers or "computer hackers." If an unauthorized 2003), cert. denied, 538 U.S. 1051, 123 S. Ct. 2120, 155 L. Ed. party gains access to a transit agency's real-time data 2d 1095 (2003). "by intercepting an electronic communication or access- 294 Id. at 1047 (citing 18 U.S.C. § 2701(a)). ing information stored about such communication," the 295 18 U.S.C. §§ 2510­2522 (2009). unauthorized interception may violate the ECPA.292 Title 296 Id. § 2511(1)(a) (2009). 297 Id. § 2511(c) (2009). 298 291 Crowley, 166 F. Supp. 2d 1263, 1268 (N.D. Cal. 2001) Sherman & Co. v. Salton Maxim Housewares, Inc., 94 F. (quoting 18 U.S.C. § 2510). Supp. 2d 817, 820 (2000) (quoting State Wide Photocopy Corp. 299 Steiger, 318 F.3d at 1047 (citations omitted). v. Tokai Financial, Inc., 909 F. Supp. 137, 145 (S.D.N.Y. 300 1995)). 18 U.S.C. § 2520. 301 292 Lars Smith, supra note 22, at 751; see Electronic Com- Sherman, 94 F. Supp. 2d at 820. 302 munications Privacy Act of 1986, Pub. L. No. 99-508, 101-303, Therapeutic, 488 F. Supp. 2d at 997­98.

27 Thus, the section "outlaws illegal entry, not larceny."303 the CFAA have broader applicability as the Act applies A person with authorized access to a database does not to "damage caused by unauthorized access or access in violate the section no matter how malicious or larce- excess of authorization to a computer system...."317 For nous the intended use of that access.304 example, the statute applies to anyone who "intention- Communications are in electronic storage within the ally accesses a computer without authorization or ex- meaning of the SCA even when "the storage is transi- ceeds authorized access, and thereby ob- tory and lasts for only a few seconds."305 Moreover, in- tains...information from any protected computer if the formation stored on a server and conveyed from a pri- conduct involved an interstate or foreign communica- vate Web site to users is subject to the SCA,306 as well as tion...."318 The CFAA is applicable also to anyone who information held temporarily in random access mem- knowingly and with intent to defraud, accesses a pro- 307 ory. tected computer without authorization, or exceeds author- In In re Intuit Privacy Litigation,308 the plaintiffs al- ized access, and by means of such conduct furthers the in- leged that the defendant implanted "cookies" on their tended fraud and obtains anything of value, unless the computer hard drives when they visited certain Web object of the fraud and the thing obtained consists only of sites. The court held that for there to be a violation of the use of the computer and the value of such use is not 319 Section 2701, a defendant need not "be a third party to more than $5,000 in any 1-year period... an electronic communication [that] eventually [is] in The Act is applicable also to anyone, inter alia, who electronic storage in a facility" or even that there be a "knowingly causes the transmission of a program, in- communication at all with the defendant.309 All that is formation, code, or command, and as a result of such required for a violation of the statute is the defendant's conduct, intentionally causes damage without authori- "act of accessing electronically stored data."310 Although zation, to a protected computer," or who "intentionally presumably not applicable to transit agencies and real- accesses a protected computer without authorization" time data, Section 2702(a) of the SCA prohibits volun- and recklessly causes damage or causes damage320 and tary disclosure of a customer's electronic data by per- by such conduct caused or would have caused "loss to 1 sons or entities providing an electronic communication or more persons during any 1-year period...aggregating service311 or providing a remote computing service to the at least $5,000 in value...."321 public. Although the term "damage" under the statute Although the SCA provides for criminal liability, an means "any impairment to the integrity or availability aggrieved party may bring a civil action for a violation of data, a program, a system, or information,"322 a defen- of the Act, subject to a 2-year statute of limitations,312 dant's alleged access to and disclosure of trade secrets and recover actual damages and "any profits made by a may constitute "an impairment [of] the integrity of 313 violation," plus "attorney's fees and other litigation data...or information."323 Moreover, the unauthorized 314 costs." If damages are awarded, the amount is to be access to or disclosure of information may constitute an 315 for no less than $1,000. impairment even though there was no physical change in or erasure of data.324 B. Computer Fraud and Abuse Act Some courts have found that a license that prohibits The Computer Fraud and Abuse Act (CFAA),316 a using a Web site or online database for a certain pur- somewhat complicated statute, appears to be directed pose may subject someone to a Section 1030(a)(2)(c) primarily at the prevention of unauthorized disclosure claim if the party, nevertheless, accesses information of data involving the national defense or foreign rela- online and uses it for a purpose for which the party had tions of the United States. However, other provisions of agreed not to use the information.325 Moreover, it has been held that a violation of a subscription agreement, 303 such as the unauthorized sharing of a subscriber's con- Sherman, 94 F. Supp. 2d at 821. 304 Id. 317 305 Charles Schwab & Co., Inc. v. Carter, 2005 U.S. Dist. Columbia Pictures, Inc. v. Bunnell, 245 F.R.D. 443, 450 LEXIS 5611, at *9 (N.D. Ill. 2005). (C.D. Cal. 2007) (citation omitted). 318 306 18 U.S.C. § 1030(a)(2)(c) (2009). Steiger, 318 F.3d at 1047 (citing Konop v. Hawaiian Air- 319 lines, Inc., 302 F.3d 868, 876 (9th Cir. 2002)). Id. § 1030(a)(4) (2009). 320 307 Columbia Pictures, Inc., 245 F.R.D. at 446 (a ruling in- Id. § 1030(a)(5)(i), (ii), and (iii) (2009). 321 volving discovery). Id. § 1030(a)(5)(B) (2009). 308 322 138 F. Supp. 2d 1272 (C.D. Cal. 2001). Id. § 1030(e)(8) (2009). 309 323 Id. at 1275­76. Shurguard Storage Ctrs., Inc. v. Safeguard Self Storage, 310 Id. at 1276 (footnote omitted). Inc., 119 F. Supp. 2d 1121, 1126 (W.D. Wash. 2000) (holding 311 that the plaintiff's complaint stated a claim and denying de- Sherman & Co., 94 F. Supp. 2d at 820. 312 fendant's motion to dismiss). 18 U.S.C. § 2707(f) (2009). 324 313 Id. Id. § 2707(c) (2009). 325 314 See, e.g., EF Cultural Travel BV v. Explorica, Inc., 274 Id. § 2707(b)(3) (2009). F.3d 577 (1st Cir. 2001), and Register.com v. Verio, 356 F.3d 315 Id. § 2707(c) (2009). 393 (2d Cir. 2004) (plaintiff failed to show $5,000 in damage as 316 Id. § 1030 (2009), et seq. required by statute).

28 fidential user name and password, is an impairment whether federal legislation preempts state law. How- that states a claim under the CFAA.326 ever, in Bansal v. Russ,330 a federal court in Pennsyl- vania held that the Federal SCA did not preempt Penn- Guidance Number 15 sylvania's Wiretapping and Electronic Surveillance The ECPA, although a criminal statute, also creates a Control Act that prohibits unlawful access to stored cause of action for damages and other relief against communications.331 electronic trespassers. The ECPA through the federal Claims under state law also may be challenged on Wiretap Act and the SCA seeks to protect against unau- the basis of the "dormant commerce clause" doctrine. As thorized electronic intercepts of communications or the explained in one article, "[t]he dormant Commerce accessing of stored communications and records. The Clause is preoccupied with state economic protection- SCA prohibits unauthorized access to information, not ism. ...[T]he Supreme Court has applied a virtually the misappropriation or disclosure of the information. fatal form of strict scrutiny to state laws that discrimi- Information stored in a server and conveyed from a pri- nate against interstate commerce and a more forgiving vate Web site to users is subject to the SCA. The CFAA balancing test that practically rubber-stamps other applies, inter alia, to damage caused by unauthorized laws that only incidentally affect interstate com- access or access in excess of authorization to a computer merce."332 However, usually dormant commerce clause system when the conduct involves an interstate or for- challenges are made to state legislation rather than eign communication. Violations of a license with respect state common law claims.333 to an online database or of a subscription agreement In Crowley v. Cybersource Corporation,334 in which may subject a violator to a claim under the CFAA. the plaintiff brought a class action pursuant to the Fed- eral Wiretap Act and the ECPA, the court held that C. State Legislation Applicable to Electronic state law claims for unjust enrichment, invasion of pri- Communications or Stored Data vacy, fraud by concealment, and breach of contract were Depending on the circumstances, there may be not in violation of the Constitution on the theory "that remedies under state legislation when an unauthorized only Congress may enact legislation regarding the person intercepts electronic communications such as Internet. ...Amazon cites no cases removing commercial real-time data or obtains access to archived data. In- activity from the reach of state tort law on dormant deed, one source argues that "[s]tate statutes presently commerce clause grounds.... Indeed, the Third Circuit serve a more important role than federal law in prohib- has expressed doubt as to whether state common law 335 iting illegal behavior with computers because many claims could violate the dormant commerce clause." state legislatures have enacted laws with broader pro- tection than provided at the federal level."327 For exam- Guidance Number 16 ple, by statute in California a plaintiff may sue for State law may provide remedies if an unauthorized damages328 when someone party obtains access to, copies, and/or distributes an agency's real-time data or exceeds its authorization or (2) [k]nowingly accesses and without permission takes, copies, or makes use of any data from a computer, com- license for access to and/or use of an agency's data. puter system, or computer network, or takes or copies any These are causes of action that may not be preempted supporting documentation, whether existing or residing necessarily by federal statutes. internal or external a computer, computer system, or computer network[;] D. Whether Real-Time Data Constitutes a Trade Secret (3) [k]nowingly and without permission uses or causes to be used computer services[;] ... According to the Restatement (Third) of Unfair Com- petition, "[a] trade secret is any information that can be (6) [k]nowingly and without permission provides or as- used in the operation of a business or other enterprise sists in providing a means of accessing a computer, com- puter system, or computer network[;] 330 (7) [k]nowingly and without permission accesses or causes 513 F. Supp. 2d 264 (E.D. Pa. 2007). 331 to be accessed any computer, computer system, or com- Id. at 282­83. See also In re Nat'l Security Agency Tele- 329 puter network. communications Records Litigation, 483 F. Supp. 2d 934, 939 (N.D. Cal. 2007) (holding that the SCA did not completely pre- An issue that may arise with state legislation is empt state law privacy claims against telephone companies for alleged disclosure of subscriber calling records to the govern- 326 Therapeutic Research Faculty v. NBTY, Inc., 488 F. ment). 332 Supp. 2d 991, 997 (E.D. Cal. 2007). Norman R. Williams, The Dormant Commerce Clause: 327 Charles Victor Lang, Note: Stolen Bytes: Business Can Why Gibbons v. Ogden Should be Restored to the Canon, 49 ST. Bite Back, 1986 COLUM. BUS. L. REV. 251, 259 (1986) (footnotes LOUIS L.J. 817 (2005). 333 omitted) (stating also that "[t]hirty-six states presently have Crowley, 166 F. Supp. 2d at 1272 (citing Camden County computer crime statutes, a number which is bound to increase Bd. of Chosen Freeholders v. Beretta U.S.A. Corp., 123 F. in the future"). Supp. 2d 245, 254 (D.N.J. 2000)). 328 334 CAL. PENAL CODE § 502(e) (2009). 166 F. Supp. 2d 1263 (N.D. Cal. 2001). 329 335 Id. §§ 502(c)(2), (3), (6), (7) (2009). Id. at 1272 (citations omitted).

29 and that is sufficiently valuable and secret to afford an amended counterclaim stated a claim.347 (See discussion actual or potential economic advantage over others."336 of cases in Section VII.B.3, infra, holding that certain Forty-five states, the District of Columbia, and the U.S. records were not subject to disclosure under public dis- Virgin Islands have adopted some version of the Uni- closure laws because they were exempt as trade se- form Trade Secrets Act (UTSA), a model law defining crets.) 337 rights and remedies regarding trade secrets. Not addressed in the Sherman case is the question of Pursuant to the UTSA, "any information" may con- whether the Copyright Act preempts a state claim for stitute a trade secret.338 The UTSA defines a trade secret misappropriation of a trade secret. As one article notes, to mean as "the line between trade secret and copyright protec- information, including a formula, pattern, compilation, tion becomes blurred...the possibility of preemption program device, method, technique, or process, that: (i) increases." 348 Whether there is preemption depends on derives independent economic value, actual or potential, whether the essence of the claim for a violation of a from not being generally known to, and not being readily state's trade secrets law is merely for unauthorized ascertainable by proper means by other persons who can copying of data or software. obtain economic value from its disclosure or use, and (ii) In Huckshold v. HSSL, LLC,349 the plaintiff had en- is the subject of efforts that are reasonable under the cir- tered into an agreement to develop software for the 339 cumstances to maintain its secrecy. tracking and maintenance of a customer database for To preserve a trade secret, the owner must be careful 350 the defendant HSSL. Another defendant, The Miller "to limit access to the information, and such informa- Group, Inc., allegedly copied the software from one of 340 tion should only be disclosed in confidence." HSSL's computers in violation of the agreement be- A claim may be available for misappropriation of tween the plaintiff and HSSL. The court noted that a trade secrets either under the UTSA341 or at common claim for misappropriation of trade secrets is preempted law. Although a misappropriation of trade secrets is when the claim is based solely on copying, because the unlawful, "trade secret law does not create a right in claim would be "qualitatively equivalent" to a claim for 342 the information itself." Thus, an owner "has no pro- 351 copyright infringement. On the other hand, "claims of prietary interest in the information," and "`the public at misappropriation of trade secrets that are based upon large remains free to discover and exploit the trade se- breach of an independent duty of trust or confidence to cret through reverse engineering...or by independent the plaintiff are qualitatively different than claims for creation.'"343 copyright infringement and are not preempted."352 The For example, as the court observed in Sherman & court held that the plaintiff's claim for misappropriation Co. v. Salton Maxim Housewares, Inc.,344 under the of trade secrets was not preempted, because the plain- Michigan statute345 a claimant would have to establish tiff would "have to prove that the software was a trade among other things whether the data in question secret that was misappropriated by Miller from HSSL amounted to trade secrets and whether the party and that HSSL was under a duty to maintain the secret against whom the claim is made had express or implied and limit its use. These are elements in addition to the 346 consent to disclose or use the data. In Sherman, be- copying required for a copyright infringement claim."353 cause Salton alleged that "Sherman took sales data Likewise, in Therapeutic Research Faculty, the court constituting trade secrets and/or proprietary informa- held that the alleged misappropriation by the sub- tion under MCL § 445.1902(b)(ii)(A) and gave it to Sal- scriber of its username and password for the defen- ton's competitor...without Salton's consent," Salton's dants' benefit was a violation of the UTSA adopted by California.354 Moreover, the court held that the plaintiff 336 Restatement (Third) of Unfair Competition, 39 cmt. d could prevail on its claim by showing damage because of 355 (1995). the misappropriation or unjust enrichment. 337 Smith, supra note 22, at 722 n.138. There also may be an issue of whether a state's trade 338 Uniform Trade Secrets Act 1, available at: http://euro. secret law preempts other claims at common law. Sec- ecom.cmu.edu/program/law/08-732/TradeSecrets/utsa.pdf, last 347 accessed on Jan. 8, 2010. See also State of Washington, Trade Id. at 822. Secrets Act, WASH. REV. CODE § 19.108, et seq., available at 348 Carole P. Sadler, Comment: Federal Copyright Protection http://apps.leg.wa.gov/RCW/default.aspx?cite=19.108, last ac- and State Trade Secret Protection: The Case for Partial Pre- cessed on Jan. 8, 2010. emption, 33 AM. U.L. REV. 667, 668 (1984) (footnote omitted). 339 Uniform Trade Secrets Act § 1(4). 349 344 F. Supp. 2d 1203 (E.D. Mo. 2004). 340 Smith, supra note 22, at 724; Restatement (Third) of Un- 350 Id. at 1205. fair Competition, 39 cmt. g (1995). 351 Id. at 1209 (citation omitted). 341 See Uniform Trade Secrets Act 1(2). 352 Id. (citations omitted). 342 Smith, supra note 22, at 729 (citing Restatement (Third) 353 Id. of Unfair Competition, 39 cmt. c (1995)). 354 343 Therapeutic Research Faculty, 488 F. Supp. 2d at 999 Id. at 730 (footnote omitted). (quoting Fas Techs. Ltd. v. Dainippon Screen MFG., Co., Ltd., 344 94 F. Supp. 2d 817 (E.D. Mich. 2000). 2001 U.S. Dist. LEXIS 7503 (N.D. Cal. May 31, 2001) and cit- 345 MICH. COMP. LAWS § 445.1902(b)(ii)(A). ing CAL. CIV. CODE §§ 3426.2, 3426.3)). 346 355 Sherman, 94 F. Supp. 2d at 821. Id. at 1000 (citations omitted).

30 tion 7(a) of the UTSA provides that, except as provided considerations."361 The Task Force concluded that Article in subsection (b), it "displaces conflicting tort, restitu- 2 of the UCC, which is applicable to a sale of goods, "is a tionary, and other law of this State providing civil poor fit" for computer information contracts because remedies for misappropriation of a trade secret." How- typically in a computer information contract title does ever, the UTSA "does not affect: (1) contractual reme- not pass between the parties.362 Indeed, the parties have dies, whether or not based upon misappropriation of a a continuing relationship, because one party is author- trade secret; or (2) other civil remedies that are not ized to use the information.363 Under UCITA "any infor- based upon misappropriation of a trade secret...."356 Of mation transaction that transfers fewer than all rights course, a trade secret statute does not preclude other in the information is automatically deemed to be a li- civil remedies for misappropriation of confidential in- cense, regardless of whether title to a copy is trans- formation if the information is not a trade secret under ferred."364 the applicable statute.357 According to the Task Force, another reason that UCITA is a better fit is that the Act "establishes rules Guidance Number 17 where none exist now or improves present law, and Any information may qualify as a trade secret, but represents the first comprehensive uniform computer access to the information must be limited and disclosed information licensing law."365 Although UCITA and only in confidence to preserve a later claim for misap- UCC's Article 2 are similar in many ways,366 UCITA's propriation. However, a claim under state law for mis- provisions are more favorable to licensors even when appropriation of trade secrets could be preempted by the licensees are businesses.367 Nevertheless, because of the Copyright Act if the claim is merely, for example, opposition by various groups to UCITA, only Virginia for unauthorized copying. A claim for misappropriation and Maryland have enacted UCITA. Moreover, some of a trade secret based on a breach of trust or confiden- states have enacted legislation blocking UCITA's appli- 368 tial relationship is less likely to be preempted. cation. It should be noted that such blocking statutes may not block the application of UCITA in every in- E. Licensing of Real-Time Data and the Computer stance. For example, Information Transactions Act [If] a licensee from an anti-UCITA state were sued in its Assuming that a transit agency proceeds to make own state, these statutes would shield the licensee from real-time data available in some format pursuant to a UCITA. However, if that same licensee were sued in a licensing agreement, in two states the agreement could UCITA state (currently only Maryland and Virginia), to avoid the application of UCITA that licensee would be subject to the Uniform Computer Information probably have to go to court in the UCITA state and ar- Transactions Act (UCITA). In other states, such an gue either that such court did not have jurisdiction or agreement regarding the licensing of the use of elec- that such court should apply the laws of the anti-UCITA tronic data presumably would be governed by contract law or Article 2 of the Uniform Commercial Code (UCC) 361 Report of the Joint Task Force of the Delaware Bar Asso- or a state law on licensing.358 However, even in states ciation Sections of Commercial Law, Computer Law, Intellec- that have not enacted UCITA, the courts may look to tual Property, and Real and Personal Property 1, hereinafter UCITA for guidance.359 cited as Report of the Joint Task Force, available at http:// A Task Force of the Delaware Bar Association, which euro.ecom.cmu.edu/program/law/08-732/Transactions/UCITA recommended UCITA's adoption in Delaware, ob- 360 Overview.pdf, last accessed on Jan. 5, 2010. 362 served that "computer information contracts are in fact Id. 363 licenses and as such involve a host of different legal Smith, supra note 358, at 392. 364 Tussey, supra note 272, at 327 (footnote omitted). 365 Report of the Joint Task Force at 1. 366 356 Nim Razook, The Politics and Promise of UCITA, 36 Uniform Trade Secrets Act §§ 7(a) and (b). CREIGHTON L. REV. 643 (2003). 357 Burbank Grease Servs., LLC v. Sokolowski, 294 Wis. 2d 367 Id. at 653. 274, 308, 717 N.W.2d 781, 798 (citing WIS. STAT. 368 One source states that Iowa, North Carolina, and West § 134.90(6)(a)). 358 Virginia have enacted identically-worded statutes that "invali- Matthew J. Smith, An Overview of the Uniform Computer date choice of law provisions in agreements otherwise covered Information Transactions Act: Warranties, Self-Help, and Con- by UCITA, if those provisions require those agreements to be tract Formation[:] Why UCITA Should be Renamed "The Licen- interpreted pursuant to the laws of a state that has enacted sors' Protection Act," 25 S. Ill. U. L. J. 389 (2001) (noting that UCITA." The article further states that there is "`more than a little uncertainty as to where computer [t]he Iowa, North Carolina and West Virginia statutes re- software transactions fit within the body of commercial law'") quire that those agreements be interpreted pursuant to their (citation omitted). own laws, if the party against whom enforcement of the choice of 359 Rhone-Poulenc Agro v. Dekalb Genetics Corp., 284 F.3d law provision is sought is a resident of, or has its principal place 1323, 1331 (Fed. Cir. 2002) (stating that UCITA's provisions of business located in, one of those states. regarding the "licensing of intangible property provides guid- Michael A. Diener & Kenneth Slade, Proposed Uniform ance on the U.C.C.'s view of the common law"). State Licensing Law Is Losing Ground, Apr. 9, 2002, available at: 360 UCITA was first proposed as additional article, Article http://www.wilmerhale.com/publications/whPubsDetail.aspx?p 2B, to the UCC. ublication=1950, last accessed on Jan. 16, 2010.

31 state, despite the contractual choice of law provision (emphasis supplied).377 One argument is that UCITA pointing to the UCITA state's laws. Such arguments may allows states in effect to extend copyright protection to 369 be difficult, although not impossible. works not subject to copyright protection.378 For exam- UCITA is limited to "computer information transac- ple, the New York City Bar argued that UCITA "confers tions"370 such as "an agreement...to create, modify, prima facie validity on market-wide use restrictions in transfer, or license computer information or informa- mass market contracts without sufficient qualifications 371 tional rights in computer information." UCITA applies to safeguard the kinds of use and expression contem- to contracts for online access to databases and contracts plated by the fair use doctrine or copyright law's ac- to distribute information over the Internet. The Act commodation of First Amendment interests."379 Fur- expressly excludes a contract that does not require that thermore, the bar association argued that UCITA would the information be furnished as computer information protect as a property or contract right "databases...and or a contract in which computer information is de other text `obtained from or through the use of a com- minimis with respect to the primary subject matter of puter, or that is in digital or equivalent form capable of the transaction.372 being processed by a computer.'"380 Thus, "databases As seen, there is a serious question whether a transit distributed...online could be sold subject to...click li- agency's real-time data are copyrightable. Nevertheless, censes providing that purchasers will not copy any in- the Copyright Act may preempt state laws, including dividual fact in the database," an outcome that the bar UCITA, seeking to protect noncopyrightable data. association committees contend violates the Copyright UCITA recognizes the possibility of preemption inas- Act381 and results in the protection of "discrete facts 382 much as the Act states that "[a] provision of this [Act] [that] are not copyrightable...." which is preempted by federal law is unenforceable to UCITA's rules allow a licensor to "impose limitations the extent of the preemption."373 on copying or distributing...information that impli- As one source notes, "UCITA's definitions of `infor- cate[s] values embodied in federal copyright law."383 The mation' and `informational rights' include content tradi- preemptionist view is that UCITA impedes "the flow of tionally governed by copyright law and other intellec- information into the public domain"384 and that "[u]nlike tual property regimes as well as content, notably a typical two-party contract, UCITA licenses can oper- factual compilations, explicitly excluded from copyright ate to have the same scope and effect" as if there were 374 protection under current law." UCITA "covers much, state copyright laws.385 For example, "contractual pro- but not all, of the same subject matter as copyright, as tection of databases under UCITA would amount to well as subject matter specifically denied copyright pro- state-law-controlled circumvention of Feist."386 tection."375 "UCITA allows contractual protection of pub- The anti-preemptionist view of UCITA is that licens- lic domain information, notably compilations of facts, ing rights with regard to material are not equivalent to and allows providers to control all uses of information. the "exclusive rights of copyright law,"387 that there is no UCITA offers compilers the opportunity to `legislate' preemption because a "contractual restriction consti- protection of their products through mass market li- tutes the `extra element' needed to avoid preemption,"388 censes whose terms are so pervasive as to establish and that copyright law affords one "rights against the rights `good against the world.'"376 world," whereas a private contract affects only the Those taking a preemptionist position, including committees of the New York City Bar Association, have 377 THE COMMITTEE ON COPYRIGHT AND LITERARY PROPERTY, argued that UCITA's provisions conflict with the Copy- THE COMMITTEE ON COMMUNICATIONS AND MEDIA LAW, AND right Act, interfere with federal policy for having a uni- THE COMMITTEE ON ENTERTAINMENT LAW, A Proposal of the form national copyright law, and sanction "restrictions National Conference of Commissioners on Uniform State Laws on copying and other uses that copyright law permits" to Adopt a Proposed Uniform Computer Information Transac- tions Act, 54 THE RECORD 784, 786 (1999), hereinafter cited as "N.Y. City Bar Record." 378 Id. at 787. 379 369 Id. Id. at 798. 380 370 UCITA § 103(a). Id. at 800 (quoting UCITA § 102(11)). 381 371 Id. § 102(11). Id. at 801. 382 372 Id. § 103(d)(5). Id. at 801 n.72. 383 373 Id. §105(a). Pratik A. Shah, Berkeley Technology Law Journal An- 374 nual Review of Law and Technology: I. Intellectual Property: A. Tussey, supra note 272, at 327 (emphasis supplied). The Copyright: 5. Preemption: A) Contract Enforceability: The Uni- author notes that UCITA § 102(35) defines "information" as all form Computer Information Transactions Act, 15 BERKELEY "data, text, images, sounds, mask works, or computer pro- TECH. L.J. 85, 97 (2000). grams, including collections and compilations of them" and 384 that § 102(38) defines informational rights as explicitly includ- Id. at 100. 385 ing all rights created under current intellectual property laws. Id. at 101 (footnote omitted). 386 Id. n.38. Id. at 103­4. 375 387 Id. at 334. Id. at 98 (footnote omitted). 376 388 Id. at 337 (footnote omitted). Id. at 99 (footnote omitted).

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TRB’s Transit Cooperative Research Program (TCRP) Legal Research Results Digest 37: Legal Arrangements for Use and Control of Real-Time Data is designed to help transit officials understand the legal options and limitations for real-time data ownership, protection, and use.

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