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. Letter from Motion Picture Association of America (MPAA) and Other Allied Associations to NCCUSL Objecting to UCC 2B

May 10, 1999

 

John McClaugherty, President - elect
National Conference of Commissioners on Uniform State Laws
211 e. Ontario Street, Suite 1300
Chicago, IL 60611

Geoffrey Hazard, Jr., Director
American Law Institute
4025 Chestnut Street
Philadelphia, PA 19104-3099

Connie Ring, Jr., Chairman
NCCUSL UCITA Drafting Committee
Ober, Kaler, Grimes & Shriver
1401 H Street NW Fifth Floor
Washington, DC 20005

 

Gentlemen,

        We are writing on behalf of our respective trade associations and member companies to inform you of our continued opposition to the proposed statute formerly known as Article 2B. This initiative, now known tentatively as the Uniform Computer Information Transactions Act ("UCITA"), was recently separated from the UCC revision process because NCCUSL and ALI recognized that it was not the "sort of codification that is represented by the Uniform Commercial Code." While removing this project from the UCC made sense, it does nothing to remedy the serious flaws in the draft.

        Following NCCUSL's current mandate to seek "immediate introduction and enactment beginning this fall in the 50 states" is an imprudent rush to judgment that will force us and many others to vigorously oppose this proposed legislation.

        Based on the strong and broad based opposition ranging from consumers to the large entertainment, publishing and other affected industries, we believe that this highly controversial proposal does not have a fair chance of enactment in most states.

I. Why We Care: The entertainment, Communications and Publishing Industries Cannot be effectively excluded from UCITA

        Although the ever-changing statute's most recent iteration purports to exclude the activities of our industries, it has not achieved and cannot achieve that objective. For example:

The typical motion picture agreement for the acquisition of rights involves securing a variety of rights for theatrical, home video, interactive, merchandising, publishing and other areas--a mixed transaction requiring the application of both UCITA and the common law, with different results.

 

  • An acquisition of a camera containing embedded software for use by a broadcast studio would be governed by both Article 2 and UCITA.
  • Distribution of a newspaper, magazine or other text would be governed by one set of contract rules when physically distributed and UCITA when distributed electronically.

       The application of an additional and different set of contract rules to our existing transactions will needlessly increase expense, uncertainty and litigation. Existing law differs from UCITA on contract formation, warranties, performance and remedies. For example, UCITA's contract formation rules are far more aggressive than analogous provisions in the California Civil Code.

        Irrespective of the effectiveness of any exclusions, our industries will be affected by UCITA as technology is critical to the operation of each of our businesses. Even in this area, rather than being a consistent and coherent set of contract rules, the proposed statute is needlessly complex and, in certain key areas, incomprehensible. While our trade associations and member companies have worked diligently for several years to improve the proposed law, its lack of clarity would result in uncertainty in commercial transactions, create a substantial likelihood of increased litigation and increase the cost of doing business.

II. The Statute Is Based On Inappropriate Paradigms

        UCITA was modeled on UCC Article 2 and the retail, mass-market computer software paradigm. It takes a "one-size-fits-all" approach to "information" transactions, establishing the same warranty provisions for intellectual property, publishing, software and other licensing where real world practices often differ. Much as an attempt to impose football's detailed rules on baseball, basketball and swimming would result in chaos and physical injury, imposing the rules of the computer software industry on other disparate industries will create unintended consequences resulting in confusion and economic injury.

        It was not surprising that after several years of cooperation, on April 7, 1999, ALI and NCCUSL jointly announced ALI's withdrawal of its support for proposed Article 2B's inclusion within the UCC. In the announcement, ALI and NCCUSL appropriately acknowledged that the disparate businesses within the "information industry" do "not presently allow the sort of codification that is represented by the Uniform Commercial Code." We strongly endorse the view that uniform rules governing these converging industries are inappropriate at this time. As technology advances and the digital convergence continues, we will have a clearer perspective of whether additional uniform laws are necessary and the direction such laws should take. Creating a detailed blueprint to govern such future transactions at this time is premature.

        For these reasons, we respectively urge the membership of NCCUSL to refrain from approving the UCITA.

              Sincerely,
/s/
Jack Valenti
President & CeO
Motion Picture
Association of
America

/s/
eddie Fritts
President & CeO
National Association
of Broadcasters

/s/
Decker Anstrom
President & CeO
National Cable
Television Association

/s/
Hilary Rosen
President & CeO
Recording Industry
Association of America

/s/
John Sturm
President & CeO
Newspaper Association
of America

/s/
Don Kummerfeld
President & CeO
Magazine Publishers
of America

 

cc:      Professor Raymond Nimmer
UCITA Drafting Committee
Gene Lebrun
Fred Miller
NCCUSL Members

UCITA Pages On
James S. Huggins' Refrigerator Door

UCITA: Uniform Computer Information Transactions Act 
(This is the primary UCITA page.)
 
Home Box Office
Memo Spring 1998 (?)
 
45 Professors of Contracts and Commercial Law Letter 16.Jul.1999
 
Motion Picture Association of America Letter 10.Sep.1998
 
50 Intellectual Property Law Professors Letter 17.Nov.1998
 
Motion Picture Association of America Letter 09.Nov.1998
 
American Bar Association Letter 10.Jun.1999 
 
Motion Picture Association of America Letter 07.Dec.1998
 
American Committee on Interoperable Systems Letter 13.Jul.1998
 
Motion Picture Association of America Letter 10.May.1999
 
American Committee on Interoperable Systems Letter 07.Oct.1998
 
Movie, Publishing and Broadcasting Industry Letter 10.Sep.1999
 
American Committee on Interoperable Systems Letter 21.Jun.1999
 
National Music Publishers Association Letter 21.Jan.1999
 
American Committee on Interoperable Systems email 15.Jul.1999
 

Opposition Summary 
 
American Law Institute Letter 26.Mar.1999
 
 
Pamela Samuelson Letter 09.Jul.1999
 
Association of the Bar of the City of New York Report 21.Jun.1999
 
Principal Financial - Introduction to UCITA
 
 
Attorneys General Letter 23.Jul.1999
 
Principal Financial - Summary of UCITA
 
 
Attorneys General Letter 28.Jul.1999
 
Recording Industry Association of America Letter 09.Oct.1998
 

Attorneys General Letter 23.Jul.1999 
 
 
Sample Letter 


Caterpillar Statement 1999
 
 
Security Mutual Insurance Letter 26.May.1999
 

Consumer Groups Letter 10.Nov.1998 
 
Society for Information Management Letter 23.Mar.1998
 
 
Consumers Union Letter 08.Oct.1998
 
 
Society for Information Management Letter 08.Oct.1998
 
 
Consumers Union Letter 21.Jun.1999
 
Software engineering Institute Letter 01.Jun.1999
 
Digital Future Coalition Letter 23.Jun.1999
 
 
swtest-discuss Letter 20.Nov.1998
 

Digital Future Coalition Page Fall 1999
 


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