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Business Ethics

Before the UCC and the UCITA, what was one of the first, and most significant, of the U.S. government’s attempts to promote uniformity in commercial laws from state to state? (Hint: think of commerce and Constitution.)

The legislation in the US is grounded on the US Constitution, which lays the foundation to all legal acts. Any legal act that does not match the US Constitution cannot be implemented because the US Constitution is superior to all other legislative initiatives. At the same time, the existing legislation is diverse and efforts to make the legislation homogeneous have already been undertaken repeatedly. In this regard, the implementation of legal acts implies that they are homogeneous in terms of their matching the US Constitution. At this point, it is possible to refer to the Commerce Clause listed in the US Constitution, which grants the US Congress with the power to regulate commerce with foreign nations and among the several states, and with the Indian tribes. In such a way, the Commerce Clause was one of the first efforts to develop a homogeneous legislation for all states (Volti, 2005). However, in the course of the development of the US legislation, the lack of the homogeneous legislation became obvious and, today, the diversity of the US legislation from state to state raises new problems for effective business development.

Based on the information presented above, what do you see as the major differences between Article 2 of the Uniform Commercial Code and UCITA?

Basically, the major differences focus on the regulatory norms and principles. To put it more precisely, the ICC focuses on the commercial aspects and trade, whereas UCITA is more concerned with information protection and safe transactions and information transmission involving the use of computer technologies. In such a way, Article 2 of the UCC is different from UCITA in regard to the subject matter because UCITA aims at the protection of information and its security, whereas Article 2 pays more attention to commercial aspects of the problem.

What is the legal distinction between selling a product and licensing it?

Basically, the legal distinguish between selling a product and licensing product is very significant. Even though both issues mar refer to business activities of manufacturers and developers of a product, licensing is quite different from selling. In fact, selling implies the commercial transaction which involves the purchase of a product by a buyer from a seller, which may not necessarily manufacture the product. What is meant here is the fact that selling a product is a contract between a seller and a buyer that has nothing to do with manufacturing of the product and intellectual property and other rights on the product. In contrast, licensing deals mainly with the right of intellectual property rights and other rights of developers of the product and another party, which may be either a manufacturer or just another company that want to purchase the license to start manufacturing a product exclusively or on conditions of the development of the product. In such a way, licensing, being a complex process, which may involve commercial interests of developers of a product and other parties interested in the product, does not involve the mere buyer-seller relations. Instead, licensing of a product involves the developer relations with other parties, willing to obtain the license or, alternatively, the developer of a product and the government body, which grants licensing for certain business activities and products.

Many of the provisions in the UCITA were first proposed as a modification to Article 2 of the UCC. Why do you think the drafters decided to propose it as a separate and distinct uniform act?

In fact, changes and amendments suggested as modifications to Article 2 of the UCC were very significant and their introduction as amendments could fail to make them as effective as they became after their introduction in terms of the UCITA. The UCITA is an extensive legal act, which is much more detailed than amendments to Article 2 of the UCC could be (Gottlich, 2008). Therefore, the introduction of the new legislative act, namely the UCITA, allowed to regulate in details the subject of the legal act and to provide legislators and interested parties with detailed regulations which simplify operations and functioning of modern businesses, involving the use of information and computer technologies. In such a way, the introduction of the UCITA instead of mere amendments to Article 2 of the UCC is justified.

References:

Bloch, M., Peigneur Y., and Segev A. (1990). “Leveraging Electronic Commerce for Competitive Advantage: a Business Value Framework.” The Ninth International Conference on EDI-IOS, Bled, Slovenia.
Gottlich, G.L. (2008) Integrating Information Technologies into Large Organizations. New York: Random House.
Peters, T. J. (2002). In search of excellence: Lessons from America’s best-run companies. New York: Harper & Row.
Viardot, E. (2001). Successful Marketing Strategy for High-Tech Firms. New York: New Publishers.
Volti, R. (2005). Society and Technological Change. New York: Random House.