August 2, 1999 Web posted at: 11:28 a.m. EDT (1528 GMT) by Jack McCarthy and Nancy Weil

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(IDG) -- A U.S. group that works to unify state laws Friday overwhelmingly approved a controversial proposal to adopt common licensing rules for software and other information technology transactions that critics contend would hold IT companies hostage to the whims of software vendors.

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The Uniform Computer Information Transactions Act (UCITA) was voted on during a meeting in Denver of the National Conference of Commissioners on Uniform State Laws (NCCUSL), a private group of more than 300 lawyers, judges and law professors. Under NCCUSL guidelines, draft legislation has to be approved by a majority of states present when votes are taken, and that majority must include representatives from at least 20 states.

The vote count, including 50 states, plus the District of Columbia, Puerto Rico and the Virgin Islands, was 43 in favor of the proposal, six against, two abstaining and two not present. The proposal now goes to various state legislatures for approval. Most or all U.S. states typically approve the laws recommended by the organization, which proposed the draft of the UCITA.

The UCITA deregulates product licensing and covers software, multimedia interactive products, data and databases and the Internet and online information. It further allows vendors to disable software remotely as a means for repossessing products; makes shrinkwrap licensing terms more enforceable; prevents license transfers from one party to another without vendor approval; outlaws reverse engineering; and lets vendors disclaim warranties.

The measure has been hotly debated for several years. As would be expected, software vendors are chief among the proponents. They argue that a law is needed that directly affects licenses of their products.

The act means both vendors and users will be able to count on a uniform law, instead of relying on differing laws on a state-by-state basis, said Ray Nimmer, a law professor at the University of Houston Law Center and one of the drafters of the law. "We think that this will extend the rights of end users," he said.

Opponents include technology consumer groups, various trade associations and some law professors who contend that the UCITA would increase costs to companies while giving software vendors undue power.

"This law is going to bad for industry and for the country," said Cem Kaner, a software developer, lawyer and author who has taken a lead in fighting the proposal. "It redefines intellectual property law in a way that transfers huge amounts of power from the public, including universities, libraries and (software) customers, to software publishers."