Maryland Lining Up Behind UCITA

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April 07, 2000 (12:00 AM EDT)

By Darryl K. Taft,

Maryland appears to be the next state in line to adopt a bill aimed at making software licensing practices uniform across all 50 states.

If the bill passes a joint committee comprised of Maryland Senate and House of Representatives members, the Old Line state will join Virginia -- which voted the Uniform Computer Information Transactions Act (UCITA) into law last month -- as the second state in the union to pass the controversial measure into law.

Maryland's Senate passed the bill in a 37-8 vote Thursday, though the Senate version differs slightly from a version the state's House passed last week. The joint committee is working to resolve the differences in the two bills before the Maryland General Assembly ends Monday night.

Many Maryland legislators support the bill as a way to maintain an emerging high-tech base in the state and to attract additional investment in the state's high-tech corridors, as companies such as Microsoft Corp., America Online Inc. and others support the bill. However, concerns of small businesses, software distributors, solution providers and consumer groups have prompted some legislators to push for caution, which is indicated by some of the modifications Maryland has made to the bill.

Both versions of the Maryland UCITA bill allow software buyers to get a refund for any products that do not work as advertised, which is not part of most license agreements, officials said. In addition, the bills' consumer protection elements include a provision preventing software publishers from reaching out over the Internet and repossessing or disabling a consumer's software because of payment disputes or other perceived violations.

However, the Maryland senators added a clause to their bill that the House voted down. The clause said Maryland consumers can demand disputes with software companies be handled under Maryland law and in Maryland courts. Meanwhile, the House's provision requiring companies to give Internet users three days notice before cutting them off from the Internet was rejected by the Senate in its version of the bill.

Software resellers said UCITA would prevent the transfer of software licenses without permission from the product's vendor, which could leave solutions providers and distributors stuck with inventory they cannot sell.

John Hernandez, president of SoftShop, a Grants Pass, Ore., solution provider, said UCITA "hits at the basic level of freedom in the United States -- the freedom to buy and sell."

"Let's not be the first in the country to do this and find out later on that we've made a huge mistake," said Sen. Martin Madden, a Republican from Maryland's Howard County, during an hour-long debate in the Maryland Senate over the 88-page bill.

State officials said they believe the UCITA bill will pass in some form in Maryland this session.