Proposed Uniform State Licensing Law Is Losing Ground

Download IconDownload Print IconPrint

Proposed Uniform State Licensing Law Is Losing Ground

Publication

Related Solutions

We help companies protect data, comply with evolving regulations, and respond to investigations and litigation.
We leverage technical knowledge, business acumen and legal experience to structure, prepare and negotiate innovative and effective technology-related agreements.
For companies in the life sciences sphere, licensing intellectual property and establishing strategic alliances are critical. WilmerHale’s experienced licensing lawyers shepherd biotech, pharmaceutical, healthcare and medical device clients of all sizes through the complex transactions that make their businesses possible, including a broad range of licensing, collaboration, strategic alliance and joint venture agreements. Our attorneys also excel at brokering manufacturing and supply agreements, contract research and development agreements, distribution and commercialization services agreements, and material transfer and confidentiality agreements. They also frequently represent life sciences clients as they license patents—often the foundations of their companies—from, and sponsor research at, leading academic institutions across the United States and Europe. Backed not only by their own experience but also the deep well of knowledge possessed by the firm’s patent, tax, antitrust and EU competition lawyers, our transactional attorneys are ready to handle even the most multifaceted matters. Our team helps clients protect their innovations, forge strategic alliances, and successfully navigate a complex, dynamic industry.
Our clients in the ever-changing and fiercely competitive hardware, software, IT and services industries depend on us to strategize and negotiate transactions that take advantage of opportunities now while protecting their innovations and preserving flexibility for the future. We structure, negotiate and draft all types of licensing, distribution, product development, joint venture and strategic alliance agreements for these clients, often drawing on the deep experience of WilmerHale’s unique capabilities in regulatory, intellectual property, corporate and tax law. We represent both mature and emerging companies with business models centered around offering software and/or professional services relating to analyzing and extracting insights from large data sets. We frequently draft and negotiate data license agreements, software-as-a-service (SaaS) agreements, website terms and other services agreements in which data is the core subject of the license. We also advise technology clients on big data issues that arise in outsourcing, joint venture and other transactional matters. Our attorneys keep a close watch on internet-related legislative and regulatory developments in the United States, the European Union and elsewhere, and leverage our up-to-the-minute knowledge to advise clients in areas such as data privacy and security, copyright infringement, and export restrictions.

The Uniform Computer Information Transactions Act ("UCITA") was proposed by the National Conference of Commissions on Uniform State Laws in 1999, in the hope of creating a uniform law that would govern licensing transactions relating to software and multimedia products. To date, however, only two states have enacted UCITA, and three states have taken action to block its application.

As we discussed in our February 23, 2001 Internet Alert, UCITA has caused significant controversy between the information technology industry and various consumer and user groups. Maryland and Virginia adopted UCITA by April 2000, but no other states have followed their lead. The status of UCITA in other states can be found by visiting the National Conference of Commissions on Uniform State Laws web site or the UCITA web site.

In fact, UCITA has been attracting more opposition than support. Three states have adopted so-called "anti-UCITA" or "bomb-shelter" statutes, which are designed to block the application of UCITA to companies and individuals residing in those states.

Iowa Code Section 554D.104(4), North Carolina Section 66.329and West Virginia have enacted identically-worded statutes which invalidate choice of law provisions in agreements otherwise covered by UCITA, if those provisions require those agreements to be interpreted pursuant to the laws of a state that has enacted UCITA. The Iowa, North Carolina and West Virginia statutes require that those agreements be interpreted pursuant to their own laws, if the party against whom enforcement of the choice of law provision is sought is a resident of, or has its principal place of business located in, one of those states.

Similar, although not identical, anti-UCITA statutes are under consideration in New York and Ohio.

The value of these anti-UCITA statutes to parties trying to avoid UCITA may in fact be fairly narrow. If a licensee from an anti-UCITA state were sued in its own state, these statutes would shield the licensee from UCITA. However, if that same licensee were sued in a UCITA state (currently only Maryland and Virginia), to avoid the application of UCITA that licensee would probably have to go to court in the UCITA state and argue either that such court did not have jurisdiction or that such court should apply the laws of the anti-UCITA state, despite the contractual choice of law provision pointing to the UCITA state's laws. Such arguments may be difficult, although not impossible.

Regardless of the value of these anti-UCITA statutes, their adoption reflects a growing sentiment against UCITA. When combined with the failure of any additional states to enact UCITA for more than a year, the outlook for UCITA is looking increasingly grim. States that do not adopt UCITA can be expected to continue to resolve licensing disputes relating to software and multimedia products by either applying (1) traditional concepts of contract law or (2) principles of Article 2 of the Uniform Commercial Code, even while recognizing that Article 2 is meant to apply to sales of goods and not licenses of software.

Notice

Unless you are an existing client, before communicating with WilmerHale by e-mail (or otherwise), please read the Disclaimer referenced by this link.(The Disclaimer is also accessible from the opening of this website). As noted therein, until you have received from us a written statement that we represent you in a particular manner (an "engagement letter") you should not send to us any confidential information about any such matter. After we have undertaken representation of you concerning a matter, you will be our client, and we may thereafter exchange confidential information freely.

Thank you for your interest in WilmerHale.

I Accept Cancel