A team of WilmerHale lawyers achieved a significant victory for Bitmanagement when the Court of Appeals for the Federal Circuit found that the company should be compensated by the Navy in relation to the installation of Bitmanagement’s software onto hundreds of thousands of Navy computers.
The lawsuit concerns the Navy’s mass installation of BS Contact Geo, an advanced graphics rendering software developed by Bitmanagement, onto every computer on the Navy Marine Corps Intranet despite having only purchased 119 total seat licenses from Bitmanagement. After extended discussions with the Navy failed to reach resolution, Bitmanagement filed a copyright infringement lawsuit in 2016.
On September 9, 2019, following a six-day bench trial held earlier that year, Judge Edward J. Damich of the United States Court of Federal Claims found that while Bitmanagement had established a prima facie case of copyright infringement, the Navy was not liable because an implied license permitted it to make the copies.
On appeal, Bitmanagement argued that Bitmanagement had never implicitly authorized the Navy to copy the software. Even if it had agreed to an implied license, the Navy exceeded the scope of that license by violating a key condition that the Navy use a separate license tracking software called Flexera to track and limit their usage of BS Contact Geo.
On February 25, 2021, the Federal Circuit found that the Claims Court had failed to consider whether the Navy complied with the terms of the implied license. The panel agreed with Bitmanagement’s argument that the Navy had failed to use Flexera and held that “[s]uch unauthorized copying is copyright infringement.” . The Federal Circuit vacated the Claims Court’s decision and remanded for a calculation of damages.
In a concurring opinion, Judge Newman contended that Bitmanagement had not agreed to any license that would allow the Navy to make so many copies of BS Contact Geo. She stated: “The Navy has not justified this improper copying; it violates the terms of its purchases of Bitmanagement’s product, and violates Bitmanagement’s copyright.”
Brent Gurney, who tried the case for Bitmanagement, said: “This is a big win for our client, Bitmanagement, which has been fighting for justice from the Navy for many years. This is a significant victory not just for our client, but also for all software creators who find their works copied without their authorization.”
The WilmerHale team included Brent Gurney, Mark Fleming, Leon Kenworthy, Jamie Yood, Jessica Lutkenhaus, and Michael Carpenter.