US Navy On The Hook For 'Pirating' German Company's Software

from the yarrrr! dept

A couple of years ago, we discussed the somewhat ironic story of a German software company suing the United States Navy for pirating its software. The initial story was a bit messy, but essentially the Navy tested out Bitmanagement's software and liked it well enough that it wanted to push the software out to hundreds of thousands of computers. After Bitmanagement sued for hundreds of millions of dollars as a result, the Navy pointed out that it had bought concurrent use licenses through a third party reseller. While Bitmanagement pointed out that it didn't authorize that kind of license itself, the court at the time noted that without a contractual arrangement between the company and the Navy, the Navy had an implied license for concurrent users and dismissed the case.

Bitmanagement appealed that ruling, however, arguing that the lower court stopped its analysis too soon. The story there is that such an implied license would require the Navy track concurrent users across its 500k-plus computers it installed the software on, but it appears the Navy didn't bother to track concurrent users at all.

“We do not disturb the Claims Court’s findings. The Claims Court ended its analysis of this case prematurely, however, by failing to consider whether the Navy complied with the terms of the implied license,” the Appeals Court writes.

“The implied license was conditioned on the Navy using a license-tracking software, Flexera, to ‘FlexWrap’ the program and monitor the number of simultaneous users. It is undisputed that the Navy failed to effectively FlexWrap the copies it made,” the Court adds.

And just like that, the dismissal flips entirely and the Appeals Court has now remanded the case to determine damages. Again, Bitmanagement is asking for just under $600,000,000 in damages, given the wide scale of installations the Navy undertook with its software. With nothing tracking how many users concurrently used the software, the Navy doesn't really have any way to argue back that it complied with the implied license.

The real lesson in this is just how messy these sorts of copyright conundrums are. It's reasonable to believe that the Navy thought it was doing the right thing, even if it failed to comply with the implied license by monitoring concurrent users. But it's also reasonable for a software provider, with no evidence providing nuance, to simply see 500k-plus installations as mass copyright infringement.

But, in the eyes of the same United States that likes to put out reports on how terrible other countries are in respecting intellectual property rights, I guess the United States Navy is just a bunch of pirates now.

Filed Under: copyright, germany, infringement, us navy
Companies: bitmanagement

US Navy Accused Of Massive Amounts Of Piracy By German Software Company

from the navy-pirates? dept

We've made the point for a long time that, on a long enough timeline, pretty much everybody is a pirate. The point is that the way copyright laws have evolved alongside such useful tools as the internet makes knowing whether common sense actions are actually copyright infringement an incredibly dicey riddle to solve. Often times without even trying, members of the public engage in infringing activities, up to and including the President of the United States.

And, it appears, up to and including entire branches of the United States military, though claims of accidental infringement in this case would appear to be rather silly. Bitmanagement, a German software company that produces virtual reality software, is accusing the US Navy of what can only be described as massive levels of copyright infringement.

In 2011 and 2012, the US Navy began using BS Contact Geo, a 3D virtual reality application developed by German company Bitmanagement. The Navy reportedly agreed to purchase licenses for use on 38 computers, but things began to escalate.

While Bitmanagement was hopeful that it could sell additional licenses to the Navy, the software vendor soon discovered the US Government had already installed it on 100,000 computers without extra compensation. In a Federal Claims Court complaint filed by Bitmanagement two years ago, that figure later increased to hundreds of thousands of computers. Because of the alleged infringement, Bitmanagement demanded damages totaling hundreds of millions of dollars.

Both parties have since investigated the issue, with the Navy reportedly simply admitting that it installed the software on nearly half a million computers. Bitmanagement had assumed the Navy would be paying for these installations, but the military branch failed to do so and instead tried to work out much lower licensing costs with the company long after the fact. For its part, the government insists that it bought concurrent licenses rather than client licenses, but this defense makes little sense for any number of reasons. The scale of installations suggests that more than 38 users would be on the software at any given time, not to mention that Bitmanagement's VARs are not authorized to sell concurrent licenses, and that nothing in the contracts the Navy agreed to even mentions the word "concurrent."

In a request for summary judgement, Bitmanagement is asking for the government to be liable for the hundreds of thousands of installations it carried out and pay for them accordingly.

Now, while this infringement by the US government seems anything other than accidental, keep in mind that this same US government that regularly puts out reports and comments on the dastardly amounts of copyright infringement carried out by other foreign governments and their citizens. It seems as though America should get its own house in order, at least at the level of the federal government, before pointing any more fingers.

Filed Under: bs contact geo, copyright, infringement, navy, piracy, us government, virtual reality
Companies: bitmanagement

German Software Company Sues US Gov't For Copyright Infringement

from the navy-pirates dept

A German software company, Bitmanagement Software, is now suing the US government for copyright infringement and demanding almost $600 million. The lawsuit, which was filed in the US Court of Federal Claims (basically a special court set up just for cases involving suing the US government for money), says that the US Navy copied Bitmanagement's 3D virtual reality software, BS Contact Geo. Apparently, the Navy had tested the software and had an evaluation license allowing the software to be used on 38 computers. And then the Navy just copied it onto hundreds of thousands of computers.

The lawsuit notes that the Navy had specifically requested the removal of Bitmanagement's usage tracking code, and then told the company that it wanted to license the software for upwards of 500,000 computers -- but also that it started doing those installs while the company was still negotiating a license. While that negotiation was ongoing, someone (accidentally, apparently) forwarded an email to Bitmanagement indicating that the software had already been installed on 104,922 computers. Apparently, a few months later, the Navy also disabled some other tracking software, called Flexwrap. This part is a bit confusing in the lawsuit, since earlier it notes that the evaluation contract required Bitmanagement to remove tracking software, but then the lawsuit notes that later on it was the Navy that removed Flexwrap, "in violation of the terms" of the license.

This is also a rare copyright case where the plaintiff is asking for actual damages, rather than mere statutory damages. That's partly because it notes that a single license of its software runs approximately $1,000 -- and it believes the software may have ended up on 558,466 computers. Thus, it's asking for $596,308,103, which is the market value of the unpaid licenses. If it had sought statutory damages, it would have been limited to just $150,000, as that's the maximum per "work infringed." But it's also because the US government has a special super power, called sovereign immunity when it comes to copyright claims, basically allowing it to avoid a copyright lawsuit in a regular ("Article III") district court. However, at least based on my understanding of the law, they can still go to the Federal Claims court (as Bitmanagement is) and seek the actual licensing fees.

It will be interesting to see how the US government responds. After all, this is the very same US government that regularly insists that copyright infringement is a horrible evil and that we need to ratchet up punishment for it. Yet, here is the Navy doing what appears to be fairly blatant direct infringement on software that it was evaluating, but failed to fully license. In the past, the US government has found itself negotiating settlements in similar cases. But, of course, none of that has resulted in the government recognizing that perhaps its hardline position on infringement by others is a bit extreme, considering its own behavior.

Filed Under: 3d, bs contact geo, copyright, software, us government, us navy, virtual reality
Companies: bitmanagement