To: Uniform Law Commissioners
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To: Uniform Law Commissioners

From: Ralph Nader

Date: July 18, 1997

Re: Draft Article 2B of the Uniform Commercial Code


Dear Commissioner:

I am writing to you to express great concern about draft Article 2B of the Uniform Commercial Code. As you gather in Sacramento, California for the annual meeting of the National Conference of Commissioners on Uniform State Laws to discuss and debate the various articles being considered, I encourage you to pay particular attention to draft Article 2B. It overwhelmingly favors software industry interests over consumers (attached are several opinion and news articles highlighting specific problems in the draft law), and I urge you to send a strong message conveying dissatisfaction with the draft to the Article 2B drafting committee.

Despite heavy criticism from consumer advocates, the library community, law professors, as well as members of NCCUSL and the American Law Institute (ALI), the overall biases of Article 2B have remained unchanged. At its last annual meeting, NCCUSL told the Article 2B drafting committee to go back to the drawing board and formulate a balanced draft because software vendors were given too many benefits and software purchasers too few protections. Here we are a year later. Not much has changed substantively - Article 2B has had a few sections modified for the better, but other areas have been changed for the worse - yet the draft law is getting closer and closer to completion. It seems that the drafters' strategy is to resist making significant modifications in an effort to simply outlast those that criticize the draft.

At ALI's annual meeting in May, Article 2B was once again subject to serious criticism and a motion offered by Professor Charles McManis addressing copyright issues was approved. ALI members also promised that major substantive motions would be made on the floor of the conference at next year's annual meeting if the draft is not improved to protect consumers. But again, despite repeated admonitions from ALI members and other interested parties, the latest draft of Article 2B continues to favor industry at the expense of consumers and the public interest.

The many software industry participants, far outnumbering consumer advocates, have lobbied long and hard in order to get Article 2B in its current formulation. In addition, industry lobbyists, such as the Software Publishers Association and the Business Software Alliance, have used hardball tactics to bully the drafting committee, for example, by threatening to walk away from the drafting process and use the financial and political power of their thousands of members to oppose enactment of Article 2B unless disputes on specific sections were resolved in their favor. This kind of heavy-handed lobbying has contributed to an unbalanced draft and it puts the drafting committee in the unenviable position of attempting to correct 2B's leanings in favor of the software industry at the risk of imperiling the entire undertaking.

It is apparent, both from the content of the draft law and 2B's history of resisting any fundamental change, that drastic action is needed to correct its imbalances. Perhaps the only way the drafting committee will have the ability to overcome the industry's intransigence and unwillingness to compromise is through a showing by the commissioners of their disapproval of the draft law. It is time to send a strong signal that the overall balance of 2B must finally change, or the Article 2B drafting committee must be dissolved and the project abandoned.


/s/ Ralph Nader