A Guide for Business Owners (Part 5): Navigating Article 2B of the Uniform Commercial Code (UCC)
A Guide for Business Owners (Part 5): Navigating Article 2B of the Uniform Commercial Code (UCC)
May 08, 2023

By: Katelyn J. Dougherty, Esq.

As a business owner, you’re likely familiar with the Uniform Commercial Code (UCC) and its significance in governing commercial transactions. While Article 2 of the UCC primarily focuses on the sale of goods, there’s another important section that you should be aware of: Article 2B. In this blog post, we’ll delve into the key aspects of Article 2B and its implications for your business.

Article 2B: Overview and Scope

Article 2B of the UCC addresses the licensing of information and software, including the sale, lease, or transfer of computer programs and related intellectual property. It recognizes that technology and information play a vital role in today’s business landscape and seeks to provide a legal framework for governing these transactions.

  1. Definition and Scope: Article 2B applies to transactions involving computer information and software, including licensing, distribution, and maintenance agreements. It covers both tangible and intangible property, such as computer programs, databases, and electronic documents.
  2. Licensing Agreements: Article 2B establishes rules and guidelines for licensing agreements, which are crucial in the software and technology industry. It outlines the rights and obligations of licensors and licensees, addressing issues such as warranties, limitations of liability, and intellectual property rights.
  3. Standard Terms and Contracts: Similar to other sections of the UCC, Article 2B addresses the use of standard terms and contracts in commercial transactions. It establishes requirements for the formation of contracts, including the acceptance of terms, offer and acceptance, and the enforceability of electronic contracts.
  4. Intellectual Property Rights: Given the nature of information and software, Article 2B addresses intellectual property rights, including copyright and trade secret protection. It provides guidelines for determining ownership, infringement, and remedies for intellectual property violations.

Benefits and Considerations

Understanding and complying with Article 2B can offer several benefits for your business:

  1. Clarity and Certainty: Article 2B provides a clear legal framework for licensing transactions, helping to establish expectations and avoid potential disputes between licensors and licensees.
  2. Protection of Intellectual Property: By addressing intellectual property rights, Article 2B helps safeguard your proprietary information, software, and other intangible assets.
  3. Streamlined Transactions: Having standardized rules for licensing agreements can streamline negotiations and transactions, making it easier to enter into licensing arrangements with confidence.
  4. Compliance and Risk Mitigation: Familiarity with Article 2B allows you to ensure compliance with legal requirements, mitigate risks, and protect your business interests.

Navigating Article 2B

In conclusion, Article 2B of the UCC provides essential guidelines for businesses involved in the licensing of information and software. By understanding the scope and requirements of this section, you can navigate licensing transactions more effectively, protect your intellectual property, and foster successful business relationships. Remember, consulting with a legal professional is key to ensure you are properly navigating, and remain in compliance with, Article 2B and to address any specific concerns related to your unique business needs.

Don’t have a business attorney? Get in touch with our team by emailing Info@harbourbusinesslaw.com.

This Blog was written by Founding Attorney, Katelyn Dougherty.

DISCLAIMER: This blog is for educational purposes only and does not offer nor substitute legal advice. This blog does not establish an attorney-client relationship and is not for advertising or solicitation purposes. Any of the content contained herein shall not be used to make any decision without first consulting an attorney. The hiring of an attorney is an important decision not to be based on advertisements or blogs. Harbour Business Law expressly disclaims any and all liability in regard to any actions, or lack thereof, based on any contents of this blog.

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