Court Grants Permanent Injunction Against Continued Copyright Infringement of Software

In a May 9, 2014 ruling, Judge Katherine B. Forrest granted a permanent injunction against defendant ABN Amro Bank's continued use of the plaintiff's software.  In an earlier ruling (here), Judge Forrest granted summary judgment of copyright infringement after finding that ABN Amro did not retain the right to use the software when it sold a subsidiary that had licensed the software from the plaintiff.  In later defending against the plaintiff's request for an injunction, ABN Amro argued that the software was too important to its business and too integrated into its systems to stop using the software, and since the plaintiff was demanding commercially unreasonable terms for a license, the Court should, in essence, grant it a perpetual license for a commercially reasonable royalty.  In rejecting that argument, Judge Forrest found that the plaintiff would be irreparably harmed without an injunction, that the balance of hardships favored the plaintiff, and the Court was particularly concerned about the public interest, writing:

[I]f this Court were to find that a license for an important piece of software may not be revoked -- or, put otherwise, must be renewed -- on terms the licensee considers reasonable, the Court would be flooded with requests to assume licensing responsibilities it is ill-equipped to assume.  This undue burden is not in the public interest in light of its already busy dockets.  To be sure, there are instances in which courts impose licensing terms -- when judicial fact-finding has determined a particular and unusual need. . . . Courts should not wade into such deep waters casually.

The Court gave ABN Amro one year to transition from the software at issue, and wrote that the Court would consider a "stay on condition that the parties both agree to move with all available speed to perfect and argue any appeals (e.g., no delays or extensions of deadlines)."

Court Denies Indirect Profits in Copyright Infringement Action as Lacking Causal Link to Infringement

In a November 8, 2013 ruling, Judge Katherine B. Forrest granted defendant ABN Ambro Bank, N.V.'s motion in limine to preclude plaintiff Complex Systems, Inc. from offering evidence of indirect profits in its copyright infringement action.  Judge Forrest had previously granted summary judgment of liability in favor of Complex Systems on its claim that ABN Ambro infringed its copyright in a software program known as BankTrade 8.0, which is used by ABN Ambro "in its letter of credit and guarantee business."  ABN Ambro then moved to preclude evidence of Complex Systems' indirect profits as part of its damages.

Judge Forrest first described the way in which the BankTrade 8.0 software was used by ABN Ambro.  In particular, "BankTrade is one of four trade processing systems used by ABN to process letters of credit and guarantees; BankTrade is not used to process foreign exchange spreads, treasuring funding, loans, lines of credit, or overdrafts."  Based on this use, Complex Systems argued for a portion of ABN Ambro's profits under the following reasoning (as characterized by ABN Ambro):  "'(1) without BankTrade, ABN could not process letters of credit, (2) without letters of credit, [ABN] would not conduct other types of trade finance transactions, and (3) therefore, without BankTrade, ABN would not conduct other types of trade finance transactions.'"

The Court then examined the reports of Complex Systems' experts, Jarosz and Smith.  The Court concluded that "Jarosz has proffered reasonable estimates of revenues somehow connected to or touching BankTrade.  His extensive analysis supports this much. . . . [W]hat is missing is the necessary causation component" between the revenues and the use of BankTrade.  Judge Forrest further found that "Smith's reports and deposition provide significant support for ABN's (and not [Complex Systems']) position on this motion:  that a causal connection between BankTrade itself and specific trade finance revenues is lacking."

Court Rejects Copyright Infringement Defenses, Grants Summary Judgment to Plaintiff

In an October 25, 2013 ruling, Judge Katherine B. Forrest granted summary judgment in favor of plaintiff Complex Systems, Inc. on its copyright infringement claims against defendant ABN Ambro Bank N.V. over a software application known as BankTrade 8.0.  Complex Systems holds the copyright registration for BankTrade 8.0, and alleged ABN Ambro's willful infringement arising from its continued use of the software.  ABN Ambro asserted as defenses that it had rights to use BankTrade 8.0 because of its subsidiary's prior licensed use, or joint authorship and ownership.  Judge Forrest had previously rejected ABN Ambro's argument that its subsidiary had assigned the license to BankTrade 8.0 before the subsidiary was divested.

The Court, plainly annoyed with ABN Ambro's shifting positions and theories throughout the litigation, first rejected ABN Ambro's contention that its former subsidiary could belatedly assert some ownership rights in the software, and transfer those rights to ABN Ambro.  Judge Forrest noted that the registration was first filed in 2008, and thus ruled that whether the subsidiary "could have once, long ago, asserted ownership rights to BankTrade 8.0 (by virtue of its position as an 'author' of some code), is now an irrelevant detour:  it did not."  

The Court further rejected on the merits the claim that ABN Ambro's former subsidiary was a joint author or co-owner of BankTrade 8.0.  Quoting the Copyright Act, Judge Forrest wrote that a "joint work of authorship is 'a work prepared by two or more authors with the intention that their contributions be merged into an inseparable or interdependent parts of a unitary whole.'"  Judge Forrest then found that, even if the facts established joint authorship, the former subsidiary had failed to timely assert those facts and to assert ownership as a result of that authorship.  The Court, applying a three year statute of limitations, noted that neither ABN Ambro nor its former subsidiary asserted any ownership right in BankTrade 8.0 in the limitations period.  Finally, Judge Forrest rejected ABN Ambro's standing to assert its former subsidiary's ownership rights, even if they existed, ruling that the "law is clear that a party accused of infringement cannot defeat that claim by pointing to rights that another may have to the work in question."