CALiFORNiA LAW REVIEM TVol. 87: 111 realities of the exchange. 16 Under Article 2B, a transaction is automatically a icense unless it constitutes an assignment of the intellectual property right itself. 17 And if it is a license, Article 2B applies. 18 Article 2B thus creates a new meaning of"licensing" information. This meaning is unknown to copyright or patent lay nd encompasses transactions that intellectual property has always dealt with as sIa the scontexdiog tre ditiosnctionassomark st tress cti se fora satires th e a tota site oaf hehe The box contains a single price, which the purchaser pays up front, and which constitutes the entire 雷如m出邮出me 54.3SaRE雷sJsh rne ogan Sys, int,r i% Ss3好好开:品息 1987),U 208, 212(EDNY: 1994 assuming without analysis that a mass-market transaction was economic realities of a transacti time. On-line distribution looks less like a traditional sale of goods than does distril of copies, though of course they may be both. C. Mark A. Leml definition of a license !把础如m"mgmg恐 Dactunate-Re th] context c/. Lunney, supra note, at 5 (arguing that the word license is simply 18. See, U.C.C:8 2B-103(ay 1)(Draft, Aug. 1, 1998). The, drafters, assure us that consumers asa leather thay a number of rights Apposed they e rele ind wt that trcensorsoma he wiling to give away some part of what federalCALIFORNIA LAW REVIEW [Vol. 87:111 realities of the exchange.16 Under Article 2B, a transaction is automatically a license unless it constitutes an assignment of the intellectual property right itself.17 And if it is a license, Article 2B applies.18 Article 2B thus creates a new meaning of “licensing” information. This meaning is unknown to copyright or patent law, and encompasses transactions that intellectual property has always dealt with as 16 . In the context of traditional mass-market transactions for software, the totality of the circumstances surrounding the transaction strongly suggests that the transaction is in fact a sale rather than a license. There is no bargaining over license terms. The purchaser (licensee?) commonly obtains a single copy of the software, along with documentation, in a box at a retail software store. The box contains a single price, which the purchaser pays up front, and which constitutes the entire payment for the “license.” The purchaser also pays sales tax on the “license.” The license does not run for a definite term and need not be renewed, but is perpetual unless terminated by the vendor (something that almost never occurs). In light of these indicia, and because most purchasers think they are “buying” a physical copy of a program, almost all courts and commentators that have considered the issue have concluded that a shrinkwrap license transaction is a sale of goods rather than a license, and that it is therefore covered by Article 2 of the current U.C.C. See, e.g., In re Dak Indus., Inc., 66 F.3d 1091, 1094 (9th Cir. 1995); Step-Saver Data Sys. v. Wyse Tech., 939 F.2d 91, 99-100 (3d Cir. 1991); Advent Sys. Ltd. v. Unisys Corp., 925 F.2d 670, 675-76 (3d Cir. 1991); RRX Indus., Inc. v. Lab-Con, Inc., 772 F.2d 543, 546 (9th Cir. 1985); Synergistic Techs., Inc. v. IDB Mobile Communications, Inc., 871 F. Supp. 24, 29 (D.C. 1994); Arizona Retail Sys. Inc. v. Software Link, Inc., 831 F. Supp. 759, 762 (D. Ariz. 1993); Hospital Computer Sys. Inc. v. Staten Island Hosp., 788 F. Supp. 1351, 1360 (D.N.J. 1992); In re Amica, Inc ., 135 B.R. 534, 552-53 (Bankr. N.D. Ill. 1992); Neilson Bus. Equip. Ctr. Inc. v. Italo V. Monteleone, 524 A.2d 1172, 1174-75 (Del. 1987); Photo Copy, Inc. v. Software, Inc., 510 So. 2d 1337, 1338-39 (La. Ct. App. 1987); USM Corp. v. Arthur D. Little Sys. Inc., 546 N.E.2d 888 (Mass. App. Ct. 1989); Dreier Co., Inc. v. Unitronix Corp., 527 A.2d 875, 879 (N.J. Super. Ct. App. Div. 1986); Schroders, Inc. v. Hogan Sys., Inc., 522 N.Y.S.2d 404, 405-06 (Sup. Ct. 1987); Communications Groups, Inc. v. Warner Communications Inc., 527 N.Y.S.2d 341, 343-44 (Civ. Ct. 1988); Lemley, Shrinkwrap Licenses, supra note , at 1244 n.23; Bonna Lynn Horovitz, Note, Computer Software as a Good Under the Uniform Commercial Code: Taking a Byte Out of the Intangibility Myth, 65 B.U. L. Rev. 129 (1985); cf. Applied Info. Management, Inc. v. Icart, 976 F. Supp. 149, 155 (E.D.N.Y. 1997) (finding that whether a transaction denominated a “license” was in fact a sale conveying ownership was a disputed question of fact). But see Microsoft Corp. v. Harmony Computers & Elecs., Inc., 846 F. Supp. 208, 212 (E.D.N.Y. 1994) (assuming without analysis that a mass-market transaction was a license rather than a sale). Of course, the economic realities of a transaction may change over time. On-line distribution looks less like a traditional sale of goods than does distribution through a store or mail order catalog; this could change the analysis under existing law. Cf. Joel Rothstein Wolfson, Information Transactions on the Information Superhighway: It’s Not Just Software Law Anymore, 6 J. Proprietary Rts. 1, 3-5 (1994) (arguing that on-line contracts have fewer enforcement problems than real-world contracts). And some on-line transmission schemes look more like performances than the distribution of copies, though of course they may be both. Cf. Mark A. Lemley, Dealing with Overlapping Copyrights on the Internet, 22 U. Dayton L. Rev. 547, 550-62 (1997) [hereinafter Lemley, Overlapping Copyrights] (arguing that Internet transmission is a copy, a distribution, and a public performance). 17 .The definition of a license is, [A] contract that authorizes access to or use of information or of informational rights and expressly limits the contractual rights or permissions granted . . . or expressly grants less than all informational rights in the information. A contract may be a license . . . whether or not the contract transfers title to a copy. U.C.C. § 2B-102(28) (Draft, Aug. 1, 1998). Since the intellectual property owner has effective control over the terms of the “contract,” see infra notes - and accompanying text, this means that so long as the intellectual property owner transfers less than her complete ownership interest in the information, the transaction will be deemed a license. For a discussion of this important shift in approach, see David A. Rice, Digital Information As Property and Product: U.C.C. Article 2B, 22 U. Dayton L. Rev. 621 (1997); cf. Lunney, supra note , at 5 (arguing that “the word ‘license’ is simply inaccurate” in this context). 18 .See U.C.C. § 2B-103(a)(1) (Draft, Aug. 1, 1998). The drafters assure us that consumers shouldn’t be worried about this because “[t]he end user is often benefited by a license rather than a sale transaction.” Id. § 2B-208, reporter’s note 5(a). This is a bit disingenuous. Sales convey a number of rights to users under federal intellectual property law; they may exhaust some of the seller’s rights with respect to the intellectual property embodied in the product sold. See 17 U.S.C. § 109(a) (1994). Licenses typically purport to do no such thing. Even the examples cited by reporter’s note 5(a) in support of the proposition that licenses benefit consumers suggest exactly the opposite—they merely indicate that licensors may be willing to give away some part of what federal law would require them to were the transaction a sale