Promoting Electrotechnology Careers and Public Policy

October 9, 1998

Carlyle C. Ring, Jr., Chair
Raymond T. Nimmer, Reporter
C/o National Conference of Commissioners
on Uniform State Laws
676 North St. Clair Street
Suite 1700
Chicago, IL 60611

Dear Commissioners:

On behalf of the IEEE United States of America (IEEE-USA) and its 220,000 U.S. members who are electrical, electronics, and computer engineers, we wish to comment on Article 2B of the Uniform Commercial Code.

We were pleased to learn that NCCUSL, at its July meeting in Cleveland, adopted the motion proposed by Commissioner Harvey Perlman. The Perlman motion went a long way toward addressing our concerns regarding article 2B and its requirement that courts would have to enforce shrink-wrap license restictions against reverse engineering. Unfortunately, the August 1 draft does not fully implement the intent of the Perlman motion. The phrase "violates a fundamental public policy" is more restrictive than "contrary to public policies relating to competition, innovation, and free expression." Further, the Reporter's comment is more restrictive than the comment supplied by Commissioner Perlman. For example, the Reporter's comment states that a contract term should not be enforced only if it is "invalid under a fundamental public policy that clearly overrides the fundamental policies that support freedom of contract...." The Reporter's language in Section 2B-105, taken together with the comment, suggest to a court that it rarely, if ever, should invalidate a contract term on this basis.

With respect to reverse engineering, the Reporter's discussion of the state of the law is generally accurate. However, by suggesting in the opening sentences of that paragraph that the law is in a state of flux, the comment may lead a court to conclude that there is not the consistency of judicial decisions and legislative statements necessary to meet the "clearly overrides" standard set forth earlier in the comment. The adoption by the House and the Senate of the reverse engineering provisions of the Digital Millennium Copyright Act should eliminate any doubt that there is a clear public policy favoring software reverse engineering needed to achieve interoperability.

Accordingly, we recommend that Section 2b-105 more closely follow the original language of the Perlman motion. Further, we urge that the comment abandon the overly stringent "clearly over-rides" standard.

In addition to the concern listed above we have also raised some other concerns (see attached February 23, 1998 letter), and our membership continues to bring issues to our attention. Communications from the NCCUSL to the IEEE-USA have been unclear as to whether our February 23, 1998 concerns were considered or addressed.

A largely redrafted Article 2B tends to obscure how these concerns were addressed, if at all. Various communications between our organization and yours indicate that you may have in fact addressed our six concerns but have rejected them. We would appreciate your response to how these issues have been addressed so that we can inform our membership and possibly alleviate some of their concerns or consider recommending tabling Article 2B.

We therefore, would appreciate your response as soon as possible so that we can respond in a timely fashion.

Thank you for your assistance and we look forward to hearing from you soon.

Sincerely,

John R. Reinert
President
IEEE-USA

CC: David E. Bartlett, The American Law Institute Representative
Amelia H. Boss, The American Law Institute Representative
John A. Chanin
Stephen Y. Chow
Patricia Brumfield Fry
Thomas T. Grimshaw
Leon M.McCorkle, Jr.
Thomas J. McCracken, Jr.
James C. McKay, Jr.
Bruce Munson,
David A Rice, The American Law Institute Representative
Lewis B. Stone
Barry H. Evenchick., Division Chair
Donald A. Cohn, American Bar Association Co-Advisor
George L. Gaff, American Bar Association Co-Advisor

Sincerely,

John R. Reinert, D.M.
President
IEEE-USA

The Institute of Electrical and Electronics Engineers - United States of America
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Office: (202) 785-0017 * Fax: (202) 785-0835 * E-mail: ieeeusa@ieee.org

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Last Update: Oct. 9, 1998

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