existence of such a contract.' "173 Likewise, "an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances. Thus, application of the U.C.C. may infer assent through any reasonable conduct including

"174

transmission of electronic messages.

175

Similarly, the U.C.C. loosens the requirements of the mirror image rule. The U.C.C. infers formation and focuses on establishing the contract's controlling terms.' The formalities necessary for enforceability are also relaxed by the U.C.C.176 As sales of goods become more common via the NII, the U.C.C. will likely become more useful based on the flexible "course of dealing" and "usage of trade" definitions. 177

ON-LINE SALE OF GOODS WITH

ELECTRONIC DELIVERY

A third transaction is where goods are both ordered and delivered via the NII. The primary difference between goods delivered via the NII and those discussed earlier is that the goods themselves may not "exist" prior to the delivery. Rather, they are reproduced upon transmission to the buyer's computer system. Because the goods do not exist prior to the sale, the goods are considered "future

176

See U.C.C. § 2-207 (1990).

The U.C.C. contains a Statute of Frauds which raises the same questions as common law concerning whether a purely electronic contract can meet the writing and signature requirements. However, the U.C.C. Statute of Frauds includes exceptions to the requirements -- for specially manufactured goods not suitable for sale to others which the seller has begun to manufacture, and for goods that have been received and accepted. See U.C.C. § 2-201(2), (3) (1990). See U.C.C. § 1-205(1), (2) (1990).

177

goods" under the U.C.C., and remedies for breach of contract are limited. 178

ON-LINE LICENSES FOR USES OF WORKS

The licensing of copyrighted works via the NII is more problematic. Application of U.C.C. Article 2 is questionable, because the works involved may not be 'goods" under the U.C.C., and because the transaction itself is not a "sale," but rather a license to use or access the work.179 Common law principles of contract law, therefore, may apply to on-line licenses.180 Amendment of Article 2 of the U.C.C. to cover such licensing transactions is being actively considered by the Permanent Editorial Board for the Uniform Commercial Code. 181

The challenge for commercial law, as for intellectual property law, is to adapt to the reality of the NII by providing clear guidance as to the rights and responsibilities of those using the NII. Without certainty in electronic contracting, the NII will not fulfill its commercial potential. The Working Group believes that, regardless of the type transaction, where parties wish to contract electronically, they should be able to form a valid contract on-line.

of

In particular, on-line licenses should be encouraged because they offer efficiency for both licensors and licensees. Moreover, state validating statutes similar to those used to validate shrink wrap licenses -- can be used for

178 See U.C.C. §§ 2-105(2), 716(3) (1990). See D. Frisch, Symposium: The Revision of the Uniform Commercial Code, 35 WM. & MARY L. REV. 1691, 1729 (1994).

179

See U.C.C. § 1-102 (1990). But see CALAMARI & PERILLO, supra note 160, at 16; Step Saver, supra note 162, at 94; Advent Systems Ltd. v. Unisys Corp., 925 F.2d 670 (3d Cir. 1991).

180

181

See supra notes 160-71 and accompanying text.

See R. Nimmer, Symposium: The Revision of Article 2 of the Uniform Commercial Code, 35 WM. & MARY L. REV. 1337, 1341-50 (1994).

182

on-line licenses to help overcome concerns regarding adhesion; and such statutes should not be preempted as long as they do not attempt to grant rights equivalent to any of the exclusive rights within the general scope of copyright. Thus, a statute that merely recognizes the validity of on-line licenses -- even those licenses which cover the exclusive rights of the copyright owner -- would not usurp Federal power and should be upheld.

Further, just as the copyright law needs minor clarifications to account for new technology, so too might commercial law. Historically, the U.C.C. has been extremely successful in clarifying the law. However, as technology advances, the way in which business is conducted places strains upon the U.C.C. especially Article 2. Therefore, the Working Group supports the efforts presently underway to revise Article 2 of the U.C.C. to encompass licensing of intellectual property.

4. TERM OF PROTECTION

Generally, a copyrighted work is protected for the length of the author's life plus another 50 years.183 In the case of joint works, copyright protection is granted for the length of the life of the last surviving joint author plus another 50 years.' Works made for hire, as well as

184

182

183

See 17 U.S.C. § 301 (1988).

See 17 U.S.C. § 302(a) (1988). The terms of protection for works created before January 1, 1978 (the effective date of the 1976 revisions to the Copyright Act) are set forth in Sections 303 and 304 of the Act. See 17 U.S.C. §§ 303, 304 (1988 & Supp. V 1993). Bills introduced in the 104th Congress would extend by 20 years the term of protection for all works. See S. 483, 104th Cong., 1st Sess. (1995); H.R. 989, 104th Cong., 1st Sess. (1995). A directive adopted by the Council of Ministers of the European Union requires all EU member states to provide a term of protection for copyrighted works of life of the author plus 70 years. Although a number of member states have yet to enact legislation extending terms, the obligations of the directive were to go into effect on July 1, 1995. See Council Directive 7831/93 of 13 July 1993 on Harmonizing the Term of Protection of Copyright and Certain Related Rights.

anonymous and pseudonymous works, are protected for a term of either 75 years from the year of first publication or 100 years from the year of creation, whichever is shorter. 185 When the term of protection for a copyrighted work expires, the work falls into the "public domain."

"186

5. NOTICE, DEPOSIT AND REGISTRATION

Prior to the United States accession to the Berne Convention and the concomitant amendments to the Copyright Act, a copyright notice was required on all publicly distributed copies or phonorecords of works. Omission of the notice could result in the loss of copyright protection for the work. However, in 1989, the use of a copyright notice became permissive rather than required." Section 401(a) of the Copyright Act provides:

Whenever a work protected under this title is
published in the United States or elsewhere by
authority of the copyright owner, a notice of
copyright... may
may be
be placed on publicly
distributed copies from which the work can be
visually perceived, either directly or with the aid
of a machine or device.188

187

185

17 U.S.C. § 302(c) (1988). The term for anonymous or pseudonymous works differs if the identity of one or more of the authors is revealed before the end of the term of protection. See id.

186

The public domain is the legal status of works whose term of copyright protection has ended or which are not protected for other reasons, such as the noncopyrightability of the subject matter.

187 See Act of October 31, 1988, Pub. L. 100-568, 1988 U.S.C.C.A.N. (102 Stat.) 2853, 2857. Copyright notice is still required on copies and phonorecords of works publicly distributed prior to March 1, 1989, the effective date of the Act.

188

17 U.S.C. §401(a) (1988) (emphasis added). The copyright owner of a sound recording may also place a notice of copyright on publicly distributed phonorecords of the sound recording. 17 U.S.C. § 402(b) (1988).

If a copyright notice is used, it generally must consist of three elements:

the letter "C" in a circle (O) or the word "Copyright" or the abbreviation "Copr." (in the case of sound recordings embodied in phonorecords, the letter "P" in a circle);

the year of first publication of the work; and

the name of the owner of copyright in the work. 189

As a general rule, two copies of a published work must be deposited in the Copyright Office within three months of publication for the benefit of the Library of Congress.190 The Register of Copyrights may exempt categories of works from the deposit requirements. The Register may also require only one copy of the work or allow alternative forms of deposit. Although required by the Copyright Act, the deposit of copies is not a prerequisite to or condition of copyright protection. Failure to deposit copies of a work after a written demand by the Register of Copyrights, however, generally results in the imposition of a fine. 192

191

Registration with the Copyright Office is permissive, rather than mandatory. It is not a prerequisite to the grant of exclusive rights. 193 It is, however, generally a prerequisite to the enforcement of those rights in court. The copyright owner of a work (or the owner of any of the

194

191

See 17 U.S.C. § 407(c) (1988); see also 37 C.F.R. § 202.19(e) (1994).

194

17 U.S.C. § 411(a) (Supp. V 1993). Registration is required before a suit for infringement may be brought for works of U.S. origin and for foreign works from countries which are not members of the Berne Convention.