Cover Image

Not for Sale

View/Hide Left Panel
Click for next page ( 31

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement

Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 30
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 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 2B, to the UCC. ublication=1950, last accessed on Jan. 16, 2010.

OCR for page 30
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 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 could be sold subject 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).