The Virginia General Assembly has taken a bold step into the brave new world of technology, becoming the first legislature to pass the controversial Uniform Computer Information Technology Act (UCITA).

The goal behind UCITA is to establish a new commercial "uniform" law for the information economy at the national level and, ultimately, on a global scale.

Uniform laws, created by an organization of attorneys called the National Council of Commissioners on Uniform State Laws (NCCUSL) with representatives from all 50 states, are designed to help provide a consistent framework of laws from state-to-state. If a uniform law is approved by NCCUSL, each commissioner will introduce it as a bill in their state's legislature. UCITA was approved overwhelmingly last July 29, 1999 by the NCCUSL.

UCITA is designed to harmonize the law regarding computer information transactions. For example, when a dispute occurs regarding a software license, a court would look to UCITA for default rules and for help in interpreting the provisions of the license.

The act has become controversial because it will affect not only computer information, but nearly all "transactions in information," impacting the music industry, the information technology industry, public and private libraries, data processing service providers, publishers of statistical data, traditional print publishers, online database providers, and the consumer of information.

"UCITA will bring greater clarity, predictability and uniformity to the exploding world of e-business, computer information and software," Northern Virginia Technology Council (NVTC) Chairman Kathy Clark, CEO of Landmark Systems Corp., said.

Others, including the Federal Trade Commission (FTC), aren't so sure.

In a letter last year to John L. McClaugherty, chair of NCCUSL's executive committee, a number of directors in the FTC's Consumer Protection, Competition and Policy Planning Bureaus expressed their concerns that basic consumer rights and protections were being violated by the spirit, if not the letter, of UCITA.

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Joan Z. Bernstein, Director, and attorney Adam G. Cohn, of the FTC's Division of Marketing Practices in its Bureau of Consumer Protection, joined with William J. Baer, Director, and David A. Balto, Assistant Director for Policy and Evaluation, in the FTC's Bureau of Competition, and Susan S. DeSanti, Director, and Michael S. Wroblewski, Advocacy Coordinator in its Office of Policy Planning to question whether "it is appropriate to depart from consumer protection and competition policy principles in a state commercial law statute, especially since many of these same principles are now being included as core elements in international e-commerce discussions."

"UCITA endorses a license model for 'computer information transactions,', the FTC directors write. "For example, under UCITA a license to use software (rather than the sale of the software itself) would allow the licensor to limit or control how the licensee uses the software, even where the software has been mass-marketed to consumers.

Examples of these limits or controls include restrictions on a consumer's right to sue for a product defect, to use the product, or even to publicly discuss or criticize the product, they wrote.

The FTC, along with library and legal groups, also are concerned that UCITA departs from an important principle of consumer protection that material terms must be disclosed prior to the consummation of the transaction.

"UCITA does not require that licensees be informed of licensing restrictions in a clear and conspicuous manner prior to the consummation of the transaction," the FTC said, and "allows licensors of software to disclose these restrictions after the transaction has been completed (shrink wrapped licenses), such as when the licensee opens the software box and discovers the terms of the license."

UCITA also allocates "significant risks" to consumers in the event of unauthorized transactions,, the FTC wrote, which "in turn, might deter, rather than advance, development of electronic commerce."

Clark, however, whose company both licenses software to companies and licenses software from other companies, told committees of the General Assembly earlier this month that the United States needed uniform laws to govern computer information transactions since the Internet is making every company a global company with customers everywhere.

Virginia Gov. Jim Gilmore has said he would sign the law, which will take effect July 1, 2001 to allow businesses and consumers to adjust to the new law and the Joint Commission on Technology and Science to monitor the actions of other states considering the same draft in the months ahead.

But before the ink from Gov. Gilmore's pen is dry, expect a wave of lawsuits from consumer groups against the law.