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Chapter 17: E-Contracts and

Licensing

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Uniform Computer Information Transactions Act

• A model state law that provides uniform and comprehensive rules for contracts involving:– computer information

transactions– software licenses– information licenses

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Uniform Computer Information Transactions Act (continued)• The UCITA covers the following aspects of licensing information rights:– Formation of a contract– Authenticating the record– Attribution procedure– Performance– Warranties– Breach of license agreements– Limitations of remedies

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The Internet• Collection of millions of

computers that provide a network of electronic connections.

• Originally funded by the Department of Defense.

• National Science Foundation continued system to facilitate high-speed communications.

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The World Wide Web• Millions of computers

supporting HTTP.• Web sites and pages are

stored on servers operated by Internet service providers.

• Pages are viewed through web browsers.

• Extremely attractive to commercial activities.

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Electronic Mail• E-mail is a widely used

application for communication over the Internet.

• Electronic writing• Unique identifying address• Allows for instantaneous

communication around the world

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Domain Name• Domain name – a unique

name that identifies an individual’s or company’s Web site.

• Domain names may be registered by filing the appropriate form with the domain name registration service and paying the appropriate fee.

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Anticybersquatting Consumer Protection Act

• Aimed at cybersquatters who register Internet domain names of famous companies and people and hold them hostage by demanding ransom payments from the famous company or person.– The name must be famous.– The domain name was

registered in bad faith.

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E-Contracts• E-mail is sometimes the

method used to negotiate and agree on contract terms and to send and agree to the final contract.

• Assuming that all of the elements to establish a contract are present, an e-mail contract is valid and enforceable.

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E-Contracts Writing Requirements

• Electronic Signature in Global and National Commerce Act– Electronic contracts meet the

writing requirements of the Statute of Frauds.

– Electronically signed contracts cannot be denied effect because they are in electronic form and are stored and delivered electronically.

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E-Signatures• Electronic Signature in

Global and National Commerce Act– Recognizes electronic

signatures– Same force and effect as pen-

inscribed signature on paper– Allows for verification of

digital signatures

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E-Licensing• The Uniform Computer

Information Transactions Act (UCITA) governs the creation, performance, and enforcement of computer information transactions.

• Some states have adopted UCITA.

• Other states are applying state law and equity principals.

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Licensing• Intellectual property and

information rights are valuable assets of individuals and businesses.

• License – a contract that transfers limited rights in intellectual property and informational rights.

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Licensing (continued)

• Licensor – The owner of intellectual property or informational rights who transfers rights in the property or information to the licensee.

• Licensee – The party who is granted limited rights in or access to intellectual property or informational rights owned by the licensor.

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Exclusive License• A license that grants the

licensee exclusive rights to use informational rights for a specified duration.

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Licensing AgreementLicensor

Licensee

License

transfer of rights in transfer of rights in intellectual property intellectual property or information)or information)

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Licensing Agreement (continued)

• Detailed and comprehensive written agreement between the licensor and licensee.

• It sets forth the express terms of their agreement.

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Breach of Licensing Agreements• The parties to a contract for

the licensing of information owe a duty to perform the obligations stated in the contract.

• If a party fails to perform as required, there is a breach of the contract.

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Breach of Licensing Agreements (continued)

• Licensee’s refusal of defective tender

• Licensee’s revocation of acceptance• Adequate assurance of performance

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Remedies• The UCITA provides various

remedies that injured parties can obtain against breaching parties.– Cancellation– Licensor’s damages– Licensor’s right to cure– Licensee’s damages– Specific performance

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Limitations of Remedies• The UCITA provides that the

parties to an agreement may limit the remedies available for breach of the contract.

• Limitation of remedies in licenses subject to the UCITA are enforceable unless they are unconscionable.