Software Licensing Litigation
48 court cases over audits, licence scope, virtualization, support, resale, copyright and open-source licences. Each case links to the court's own judgment or docket, and lists the lessons it holds for licence managers.Read the overview.
48 cases
Copyright infringement suit (High Court of Delhi, CS(COMM) 49/2023) in which Bentley Systems used 'infringement hits' reported by its software's Phone Home Technology, an investigator's call and a lapsed licence history to show unlicensed use of STAAD.Pro and SACS by an engineering company; after the defendants failed to file a defence the court granted summary judgment on 2026-03-10, with a permanent injunction and costs of Rs. 5,55,087.
- Audit and overuse
- Copyright and IP
- Licence scope
Lessons learned- Usage reports generated by a vendor's own software can be the core evidence of unlicensed use, so an internal audit must cover the same machines and period.
- A lapsed subscription or a licence for a different product does not authorise continued use of a product.
- A notice to preserve evidence starts a documented enforcement sequence, and failing to put a defence on record can lead to summary judgment.
Pending US federal case, filed 2025-03-13, in which Celonis alleges that SAP restricts customers' extraction of their own SAP ERP data for third-party process mining, including through SAP Note 3255746 and licensing positions on indirect static read; monopolization, pricing and false advertising claims survived a motion to dismiss in 2025.
- Indirect access
- Competition
Lessons learned- How indirect static read and runtime versus full use licences apply to third-party tools that read SAP ERP data is contested.
- SAP Notes that restrict interfaces can affect whether an integration is permitted.
- Document the extraction method and licence type behind each third-party tool that reads ERP data.
- The rulings so far decide only whether claims may proceed, not whether SAP's policies are lawful.
Putative class action (N.D. Cal., filed 2022) by programmers alleging that GitHub Copilot and OpenAI Codex emit their open-source code without attribution or licence terms; in 2026 the Ninth Circuit affirmed dismissal of the DMCA section 1202(b) claim because the tools create new works rather than removing notices from copies, while breach of licence claims remain pending.
- Open-source licence
- Copyright and IP
Lessons learned- Open-source licence conditions such as attribution travel with the code; AI-generated suggestions that reproduce licensed code can raise the same obligations.
- The DMCA claim failed on the facts alleged, but the licence-based contract claims survived, so licence compliance remains the main exposure.
- Keep records of which AI coding tools are used and of settings such as filters that block suggestions matching public code.
JJH Enterprises (trading as ValueLicensing) v Microsoft is a UK competition damages claim, pending as of 2026-09-30, in which the Competition Appeal Tribunal and the Court of Appeal decided preliminary copyright issues on the resale of pre-owned Windows and Office licences in ValueLicensing's favour.
- Resale and exhaustion
- Competition
Lessons learned- On the rulings so far, perpetual Windows and Office licences bought in volume and used as independent copies can be resold in smaller quantities.
- Do not rely on contract terms or vendor transfer forms to decide whether exhausted copies may be resold.
- Remove resold licences from entitlements and deactivate the matching installations, keeping evidence for later audits.
- Treat these rulings as provisional, because they are preliminary issues that may still be appealed and the competition questions are undecided.
Microsoft's terms for running its software on rival clouds have been the subject of a CISPE complaint to the European Commission (settled in 2024), a UK CMA market investigation that found an adverse effect on competition (2025), a pending UK collective damages claim certified in 2026, and wider cloud investigations by the CMA and the Commission.
- Competition
- Licence scope
Lessons learned- Record which version of Microsoft's hosting terms applied when each licence was acquired and deployed.
- Check the Listed Provider restrictions before moving Microsoft workloads to AWS, Google Cloud or Alibaba Cloud.
- Do not assume regulatory findings have changed licence rights until the Product Terms themselves change.
- Monitor the pending UK and EU proceedings, which could lead to conduct requirements on licensing.
US federal case, filed 2018-06-19, in which Teradata alleged that SAP unlawfully tied S/4HANA to SAP HANA database licences and misappropriated a Teradata trade secret; the Ninth Circuit revived both claims in 2024 and the parties settled in 2026 for a USD 480 million payment to Teradata.
- Competition
- Licence scope
Lessons learned- Know whether each SAP HANA licence is runtime or full use before connecting third-party analytics or data warehouse tools.
- Requirements to buy one product with another can be challenged as a contractual tie, although this case settled without a finding of unlawful conduct.
- Review marking requirements and IP ownership clauses in joint development and non-disclosure agreements.
Civil enforcement action (N.D. Cal., filed 2024) alleging that Adobe hid the early termination fee on its Annual, Paid Monthly plan and made cancellation difficult, in violation of ROSCA; resolved in April 2026 by a stipulated order with a $75 million civil penalty, $75 million in free services and disclosure and cancellation requirements.
- Licence scope
Lessons learned- Check whether a monthly-billed subscription is in fact an annual commitment, and what cancelling mid-term costs, before buying it.
- Record the plan type, term start date and fee method for each subscription so early-termination costs can be calculated.
- Terms shown only behind tooltips or hyperlinks were alleged not to be clearly disclosed; read the linked subscription and cancellation terms.
Pending 2025 copyright suit in the District of Delaware in which VMware alleges that Siemens used VMware software beyond its licences, based on a deployment list Siemens submitted with a support renewal request; a magistrate judge has recommended that the case stay in Delaware against the US Siemens entities.
- Audit and overuse
- Copyright and IP
Lessons learned- Reconcile deployment lists against entitlements before sending them to a vendor with a support renewal request.
- Read the forum, governing-law and IP-enforcement clauses of a licence agreement together when assessing audit exposure.
- Expect a vendor alleging unlicensed use to be able to sue for copyright infringement rather than breach of contract.
US contract case in which a Texas federal court awarded BMC about USD 1.6 billion against IBM in 2022 for replacing BMC mainframe software at AT&T in breach of an outsourcing agreement; the Fifth Circuit reversed and rendered judgment in 2024, holding that the clause let IBM make the switch at the customer's request, and the Supreme Court denied review in 2025.
- Licence scope
- Competition
Lessons learned- Check the outsourcing or third-party access terms in each vendor agreement before an outsourcer operates, or migrates away from, that vendor's software.
- Keep a record showing that a decision to replace a vendor's product was the customer's own, because that finding decided the appeal.
- Read broadly, a clause that stops an outsourcer carrying out its client's own decision to replace software risked being an unenforceable restraint on competition.
2025 judgment of the Technology and Construction Court that Winsopia, a UK subsidiary of LzLabs, breached its IBM customer agreement by reverse engineering IBM mainframe software to develop the Software Defined Mainframe, that LzLabs and its main investor procured the breaches and conspired, that the Software Directive did not excuse the acts, and that IBM validly terminated; the court later enjoined sale of the product and the Court of Appeal refused permission to appeal.
- Licence scope
- Audit and overuse
- Copyright and IP
Lessons learned- Licence restrictions on reverse engineering, use outside the licensee's enterprise and use beyond the designated machine were enforced as written, subject only to narrow statutory exceptions.
- The statutory right to observe, study and test a program does not cover decompilation, systematic analysis of compiler output or copying of source code outside the licence.
- A refusal to answer a valid audit request was itself a breach that supported termination.
- Directors and investors who direct a licensee's breaches can be personally liable.
- Judgment
N.D. Cal. case (2018 to 2025) in which the court held that the AGPLv3 'further restrictions' clause did not let licensees strip the Commons Clause that the licensor Neo4j Sweden had added, so advertising the ONgDB fork as free and open source was false; the Ninth Circuit affirmed the preliminary injunction in 2022 and judgment for Neo4j was entered in 2024.
- Open-source licence
- Licence scope
- Copyright and IP
Lessons learned- A licensor can attach its own additional restrictions to an AGPL-based licence; the court read the AGPLv3 'further restrictions' clause as binding licensees, not the licensor.
- Check the exact licence file of each version of an 'open core' product; licences can change between releases.
- Removing licence and copyright notices from redistributed code led to DMCA liability for altering copyright management information.
Oracle USA, Inc. v. Rimini Street, Inc. and the related Rimini Street, Inc. v. Oracle International Corp. are the long-running United States cases over how far Oracle's license terms allow a third-party support provider to copy Oracle software, which ended in a confidential settlement in July 2025.
- Support and renewal
- Licence scope
- Copyright and IP
Lessons learned- Before engaging third-party support, compare the copying and hosting clauses in each product's licence with the provider's working practices.
- Copies made under one customer's licence to serve other customers were held not to be permitted by the Oracle licences at issue.
- Location clauses in a licence can restrict where copies of the software may be made.
- Licence terms differ by product line, so each product's agreement should be reviewed separately.
2025 interim relief judgment of the District Court of The Hague ordering VMware LLC and Broadcom Inc. to provide exit support for Rijkswaterstaat's perpetually licensed VMware products for up to two years from 2025-07-23, at the annual fee Rijkswaterstaat proposed, on penalty of EUR 250,000 per day up to EUR 25 million.
- Support and renewal
Lessons learned- Record the vendor's published lifecycle and support-period commitments at the time of purchase, because the court treated them as a basis for the customer's expectations.
- Start exit planning as soon as a vendor changes its model; a migration estimated at two to three years left the customer with no real choice when the support contract ended.
- Identify which legal entity licenses and supports the software, since the court rejected the claim against the local sales entity.
- Put commitments on support continuation and exit assistance in the contract instead of relying on a general duty of care.
Software Freedom Conservancy v. Vizio is a pending California lawsuit in which a device purchaser, not a copyright holder, seeks to enforce the source-code obligations of the GNU GPLv2 and LGPLv2.1 as a third-party beneficiary of those licences.
- Open-source licence
Lessons learned- Ship complete corresponding source code, or a valid written offer for it, with devices that contain GPL or LGPL components.
- Treat source-code offers shown in a product's menus as commitments that purchasers may try to enforce in contract.
- Plan for copyleft enforcement by parties other than copyright holders, since the court allowed that question to go to trial.
2024 New York Supreme Court action in which AT&T sought to compel Broadcom and VMware to honour a contractual option to renew support for perpetually licensed VMware software; the parties reported a settlement in principle and terms were not published.
- Support and renewal
Lessons learned- The wording and deadline of a support renewal option decide whether later renewals remain available.
- General End of Availability or retirement rights in incorporated online policies can be invoked against negotiated renewal options.
- Perpetual licence rights and support entitlements should be tracked as separate contracts.
- Complete entitlement records are the basis of any argument over renewal rights.
- Judgment
French case in which the Cour de cassation held in 2022 that a software author may sue for copyright infringement (contrefaçon) when a licence clause is breached, and the Paris Court of Appeal in 2024 found that Orange infringed the GPLv2-licensed Lasso library and ordered it to pay EUR 800,000 in damages.
- Open-source licence
- Copyright and IP
Lessons learned- Under French law, following the CJEU's IT Development ruling, breach of a software licence clause can be pursued as copyright infringement, with its stronger evidence and damages rules.
- Delivering GPL code inside a system built for a client counted as distribution, which triggers the source code and licensing conditions.
- Credit the author of open-source components; failing to name the author was treated as an infringement of moral rights.
2022 Southern District of New York suit in which IBM alleged that Micro Focus copied and reverse engineered CICS Transaction Server software; the court held IBM's contract claim preempted by the Copyright Act, and the case was dismissed with prejudice by stipulation in July 2024.
- Copyright and IP
- Licence scope
Lessons learned- The enforceability of contractual bans on reverse engineering can depend on the US circuit and on how the claim is framed.
- Developer and partner program agreements carry their own use restrictions, separate from production licence terms.
- A settlement between vendors can change the software that customers license.
Oracle sued third-party support provider Terix in 2013 and Hewlett Packard Enterprise in 2016 over downloading and installing Solaris patches for servers not under Oracle support; Terix agreed to a stipulated judgment of $57.7 million with an injunction in 2015, and a jury found HPE liable in 2022 before the parties dismissed the case in 2023.
- Support and renewal
- Copyright and IP
- Licence scope
Lessons learned- Access to patches and updates can be tied to an active support contract per server; using one contract's credentials for other servers was held to fall outside the licence.
- A third-party support provider's practices can create liability for the customer's own contracts and for the provider's partners, so ask how patches are obtained.
- Suspicion of misuse starts limitation periods running, for vendors and customers alike.
Litigation from 2010 to 2023 in which SAS Institute claimed that World Programming's software, written to run programs in the SAS Language, infringed its copyright and breached the Learning Edition licence; the CJEU held in 2012 that functionality, programming languages and data file formats are not protected as computer programs and that a licensee may observe, study and test a program, the English Court of Appeal dismissed SAS's appeal in 2013, and the US Federal Circuit affirmed dismissal of SAS's non-literal copyright claim in 2023.
- Copyright and IP
- Licence scope
Lessons learned- In the EU a licensee may observe, study and test a program to learn its underlying ideas while doing what the licence permits, and licence terms cannot remove that right.
- Functionality, programming languages and data file formats are not protected as computer programs in the EU, but copying a manual's text can still infringe.
- The same conduct can lead to different results in different countries, so check the governing law and forum of each licence.
California case in which the courts held that a 2010 settlement agreement required Oracle to continue to offer its product suite on HP's Itanium servers until HP stopped selling them; a jury awarded HP $3.014 billion in 2016, the Court of Appeal affirmed in 2021, and the Supreme Court of the United States denied review in 2022.
- Support and renewal
- Licence scope
Lessons learned- A short, general commitment in a settlement or side agreement can be enforced as a binding obligation to keep offering software on a platform.
- A vendor can keep supporting existing releases on a platform while ending new releases for it; check which of the two your contracts actually promise.
- Platform support disputes can outlast the hardware generation they concern, so plan migrations on the assumption that litigation will not resolve the question in time.
Google LLC v. Oracle America, Inc. is the 2021 United States Supreme Court decision holding that Google's copying of about 11,500 lines of Java SE API declaring code into Android was a fair use as a matter of law.
- Copyright and IP
Lessons learned- The case concerned reimplementation of an API, not the terms on which Oracle licenses Java SE to end users.
- Whether API declaring code is copyrightable remains undecided by the Supreme Court.
- Fair use depends on the facts of each case and is not a general permission to copy interfaces.
Long-running US federal case in which SCO alleged that IBM misused UNIX code from the Project Monterey joint development and contributed it to Linux; after SCO lost its claim to own the UNIX copyrights, the case ended in a 2021 settlement of $14,250,000 approved by the Delaware bankruptcy court.
- Licence scope
- Copyright and IP
- Open-source licence
Lessons learned- Verify that a party asserting licence or copyright claims owns the rights it relies on.
- Review field-of-use limits and release-dependent grants in joint development agreements before reusing contributed code.
- Expect that exceeding a licence may give rise to tort claims as well as contract claims.
- Record the provenance of code contributed to or taken from open-source projects.
German copyright action (Hamburg, 2015 to 2019) in which a Linux kernel developer claimed that VMware's ESXi kernel was a derivative work of Linux distributed without complying with GPL-2.0; the Hamburg District Court dismissed it in 2016 because the plaintiff had not sufficiently shown which of his protected code VMware used, the appeal was dismissed in 2019, and VMware said it was working to remove vmklinux from vSphere.
- Open-source licence
- Copyright and IP
Lessons learned- Keep a record of which open source components, and whose code, ship in each product release, because proof of what was copied decided this case.
- Treat a kernel module that combines GPL code with proprietary code as a licence risk to be designed out, not argued about later.
- A win in court on procedure does not end the compliance question; VMware still announced it would remove the disputed module.
CJEU Grand Chamber ruling (2019, C-263/18) that supplying an e-book by download for permanent use is a communication to the public under Article 3(1) of Directive 2001/29, not a distribution, so the exhaustion rule in UsedSoft for software does not allow resale of e-books.
- Resale and exhaustion
- Copyright and IP
Lessons learned- The UsedSoft exhaustion rule applies to computer programs under the Software Directive; it does not extend to other downloaded content such as e-books.
- For mixed products, identify whether the asset is a computer program or other content before relying on resale or transfer rights.
- A licence limited to reading on the user's own equipment was treated as not covering a wider public reached by resale.
Federal litigation (D.N.J. and 3d Cir., 2006-2018) in which Avaya sued an independent maintenance provider for using maintenance logins on customers' PBX systems and the provider counterclaimed for antitrust violations; a US$60 million trebled jury award against Avaya was vacated in 2016 because the licence contracts had been wrongly construed as a matter of law, and the case was dismissed with prejudice by stipulation in 2018.
- Support and renewal
- Licence scope
- Competition
Lessons learned- Whether a customer's licence lets a third-party maintainer use licensed maintenance software is a question of contract wording and can be a jury question.
- Clear restrictions in the sales contract at the time of purchase weigh heavily against aftermarket antitrust claims.
- Patches offered freely to all owners are not tied to maintenance; tying patches to paid support disclosed at the time of sale did not create liability.
- Judgment
Second Circuit case (2018) holding that ReDigi's platform for reselling lawfully purchased digital music files infringed the reproduction right, because each transfer fixed the file in a new material object, and that the first sale doctrine and fair use did not excuse it.
- Resale and exhaustion
- Copyright and IP
Lessons learned- In the United States, the first sale doctrine does not let a buyer resell a digital file by transmitting it, because the transfer makes a new copy.
- Delete-on-transfer technology did not avoid infringement; the court looked at whether a new copy was fixed on the recipient's device.
- Treat claims that downloaded content or software can be resold with caution unless the licence or a specific ruling permits the transfer.
US copyright case in which Cisco claimed that Arista copied hundreds of multi-word commands from the Cisco IOS command-line interface; a 2016 jury found infringement excused under the scenes a faire doctrine and judgment was entered for Arista, and after a 2018 global settlement the judgment was vacated on the parties' joint motion while Cisco's Federal Circuit appeal was pending.
- Copyright and IP
- Competition
Lessons learned- Command sets and user interfaces can be the subject of copyright claims even where the underlying code is not alleged to be copied.
- A trial win can be traded away in settlement, so a vacated judgment is not a precedent to rely on.
- Settlements between vendors can oblige one of them to change its product, which affects customers' scripts and tooling.
Artifex Software v. Hancom is a 2016 to 2017 United States case in which a federal court held that the GNU GPL could be enforced as a contract as well as a copyright licence, and that the price of the licensor's commercial licence could be used to value damages, before the parties settled on confidential terms.
- Open-source licence
- Copyright and IP
Lessons learned- Using GPL code without a commercial licence can create a contract through conduct, without a signature.
- Where code is dual-licensed, a copyleft breach may be valued at the price of the commercial licence.
- Records of which licence is relied on for each embedded open-source component are relevant evidence.
- The rulings were interlocutory and the case settled, so they are not appellate precedent.
Commercial arbitration commenced by SAP America on 2017-02-21 against Anheuser-Busch Companies under a 2010 software licence agreement, alleging unlicensed direct and indirect use of SAP systems and seeking damages potentially over USD 600 million; the parties settled on 2017-06-30.
- Audit and overuse
- Indirect access
- Licence scope
Lessons learned- Include users and systems that reach SAP data through non-SAP software in the licence position for an SAP estate.
- Base the SAP licence position on the specific agreement and all its amendments rather than on general vendor policy documents.
- Check the dispute resolution clause, because arbitration keeps the arguments, evidence and settlement terms private.
- Expect an under-licensing claim to seek changes to the agreement as well as damages.
English High Court judgment of 16 February 2017 holding that Diageo's customers and sales staff who reached mySAP ERP through Salesforce-based systems and SAP PI were using or accessing the software indirectly and needed Named User licences under Diageo's 2004 licence agreement.
- Indirect access
- Licence scope
Lessons learned- Count people who reach SAP ERP through third-party front ends and integration middleware when assessing a Named User position.
- Do not assume that an engine or middleware licence covers the users whose actions generate its traffic unless the contract says so.
- Read the contract's own definitions of user, use and access, because they decided the outcome.
- Check how the contract prices new channels that its user categories did not anticipate.
In Ranks and Vasiļevičs (C-166/15, 12 October 2016) the Court of Justice of the European Union held that the first buyer of a program copy with an unlimited licence may resell that copy and licence, but may not hand over a back-up copy without the rightholder's authorisation when the original medium has been damaged, destroyed or lost.
- Resale and exhaustion
- Copyright and IP
Lessons learned- Keep purchase records and the chain of transfer for second-hand licences, because the acquirer must prove lawful acquisition.
- Track perpetual licences and their proof of purchase rather than only the physical media.
- Do not treat a self-made back-up copy as a resaleable substitute for a lost or damaged original.
Ninth Circuit case (2015) holding that a reseller raising the first sale defence must first show lawful acquisition of genuine copies, after which the copyright owner must prove a licence rather than a sale; Adobe lost because it did not produce the actual licence agreements.
- Resale and exhaustion
- Copyright and IP
Lessons learned- A vendor that says its software is licensed, not sold, must be able to produce the specific licence terms that applied when each copy first changed hands.
- Buyers of second-hand or surplus software should keep invoices and supplier records showing lawful acquisition of genuine copies.
- Generic licence templates and general testimony did not prove transfer restrictions under the Vernor test.
- Judgment
In Green-IT (I ZR 4/14, 19 March 2015) the German Federal Court of Justice held that a reseller may resell an exhausted copy of a program by passing on its product key, but that the buyer may lawfully download and install the program only if the reseller has made its own copies unusable, so a reseller that kept the disc was enjoined.
- Resale and exhaustion
- Copyright and IP
Lessons learned- Resale of a product key can be lawful, but the buyer's right to download depends on the seller having made its own copies unusable at the time of sale.
- The reseller carries the burden of proving that its copies were made unusable; a generic destruction certificate was not enough.
- Keep the evidence of a second-hand licence chain, including proof that the seller's copies were removed.
Linked US cases (2013 to 2015): a federal court in Texas held that a customer's claim that its vendor breached the GPL was not preempted by copyright law, and in California XimpleWare's copyright claims against Versata and Ameriprise over the GPL-licensed VTD-XML survived dismissal before the case settled in 2015.
- Open-source licence
- Copyright and IP
- Licence scope
Lessons learned- A GPL component embedded in commercial software can become the customer's problem as well as the vendor's.
- Ask software vendors which open-source components their products contain and under what licences.
- The court held that the GPL's source code obligation is a contractual promise with an extra element beyond copyright, so it was not preempted.
Oracle Corp. v. SAP AG is the 2007 to 2014 United States copyright case over downloads and copies of Oracle software by SAP's former subsidiary TomorrowNow, which ended in a $356.7 million judgment after a $1.3 billion jury verdict was set aside.
- Support and renewal
- Copyright and IP
Lessons learned- Treat downloads of patches and documentation from vendor support portals as part of the entitlement position.
- Do not use expired support credentials or download items beyond the licensed entitlement.
- When using a third-party support provider, confirm how it obtains and copies the vendor's software.
- Copyright damages can be measured by a hypothetical licence fee even where the vendor would never have granted that licence.
In UsedSoft v Oracle (C-128/11, 3 July 2012) the Court of Justice of the European Union held that the distribution right in a copy of a computer program sold for an unlimited period is exhausted even when the copy was downloaded, so that a later acquirer of the licence is a lawful acquirer of that copy.
- Resale and exhaustion
- Copyright and IP
Lessons learned- Perpetual licences first sold in the EU can be resold even where the contract prohibits transfer.
- Remove resold licences from the seller's licence position and make the seller's copies unusable at the time of resale.
- Keep records of the original purchase and the transfer chain for any second-hand licence.
- Treat maintenance as a separate contract that does not pass with a resold licence.
Federal copyright and breach-of-contract suit (W.D. Wash., 2009-2011) in which Attachmate alleged that Health Net over-installed Reflection software; the court held that a click-through EULA promise to buy additional licences for unauthorised copies was an enforceable contract term not preempted by the Copyright Act, and the case was later recorded as settled.
- Audit and overuse
- Licence scope
- Copyright and IP
Lessons learned- A click-through EULA accepted when installing a new version can form a separate contract alongside negotiated agreements.
- A term requiring non-discounted purchase of additional licences for unauthorised copies can support a contract claim in addition to copyright.
- Accidental over-installation and non-use of extra copies are not defences to copyright liability.
- Over-deployment can also affect maintenance fees.
Ninth Circuit case (2010, amended 2011) holding that breaching a licence term is copyright infringement only if the term is a condition with a nexus to the licensor's exclusive rights; World of Warcraft's anti-bot rules were contractual covenants, but selling the Glider bot to evade the Warden technology violated DMCA section 1201(a)(2).
- Licence scope
- Copyright and IP
Lessons learned- A use restriction breached while running software is a copyright matter only if the term is a condition tied to an exclusive right such as copying or modification.
- Read whether a licence makes the grant conditional on a term or merely promises it; headings alone do not create conditions.
- Tools that bypass a vendor's technical access controls can create DMCA liability even where the underlying use breaches only a contract.
- Settled
Jacobsen v. Katzer is a United States case in which the Federal Circuit held in 2008 that the terms of the Artistic License, an open-source licence, were enforceable conditions of a copyright licence, so that breaching them could support a claim for copyright infringement.
- Open-source licence
- Copyright and IP
Lessons learned- Treat attribution, notice and change-marking obligations in open-source licences as conditions of the right to distribute.
- Software obtained free of charge can still carry licence obligations that the law will enforce.
- Check whether licence terms are worded as conditions of the grant, because breaching them can support a copyright claim rather than only a contract claim.
Ninth Circuit case (2010) holding that a software user who receives a copy under an agreement that grants a license and significantly restricts transfer and use is a licensee rather than an owner, so the first sale doctrine did not protect resale of used AutoCAD Release 14 copies.
- Resale and exhaustion
- Licence scope
- Copyright and IP
Lessons learned- Check the transfer and use terms of the licence before buying or accepting second-hand software in the United States.
- Retire or destroy earlier versions when an upgrade licence requires it.
- Treat transfers outside the licence terms as a potential copyright issue, not only a contract issue.
In March 2008 Waste Management sued SAP AG and SAP America in Texas state court for fraud and breach of contract over a 2005 software licence and implementation agreement for a waste and recycling revenue management system; the case settled in April 2010 with a one-time cash payment to Waste Management on confidential terms.
- Licence scope
Lessons learned- Put the functional scope, the degree of customisation and the implementation timeline into the licence or services contract, not only into sales material.
- Record which party is responsible for business requirements and staffing, since that was the core of the vendor's defence.
- Expect the public record of a settled vendor dispute to be limited to what a listed company must disclose.
In 2004 the European Commission found that Microsoft had abused its dominant position by refusing to supply interoperability information for work group servers and by tying Windows Media Player to Windows, fined it EUR 497,196,304 and ordered licensing of the information on reasonable and non-discriminatory terms; in 2007 the Court of First Instance upheld the decision and the fine, annulling only the monitoring trustee provisions.
- Competition
- Licence scope
Lessons learned- A dominant vendor's refusal to license interface information can be an abuse, and the remedy can be a compulsory licence on reasonable and non-discriminatory terms.
- Bundling a separate product into a dominant product can be unlawful even when no separate price is charged and use of the bundled product is optional.
- Compliance with a licensing remedy is judged on the actual price and terms offered, not just on the offer being made.
- Judgment
German case (LG Frankfurt am Main, 2006) in which, according to the plaintiff's announcement, the court confirmed Harald Welte's rights in Linux kernel code, D-Link Germany's violation of the GNU GPL in its DSM-G600 NAS device and the validity of the GPL under German law, and ordered D-Link to reimburse test-purchase, re-engineering and legal costs.
- Open-source licence
- Copyright and IP
Lessons learned- Treat the GPL as an enforceable licence; the defence that it is not legally binding failed.
- Device and appliance makers that ship Linux must meet the GPL conditions in each product they distribute.
- A cease-and-desist declaration may not end the matter; the enforcer's investigation and legal costs can also be recovered.
Antitrust case in which the D.C. Circuit, sitting en banc in 2001, upheld the finding that Microsoft unlawfully maintained its monopoly in Intel-compatible PC operating systems, including through restrictions in its Windows licences for PC manufacturers, while vacating the break-up order; a 2002 consent final judgment required uniform Windows licence terms for the largest manufacturers and was upheld in 2004.
- Competition
- Licence scope
Lessons learned- Licence terms are not immune from competition law; the court rejected Microsoft's argument that exercising its copyrights could not create antitrust liability.
- Restrictions on what licensees may change, remove or promote in licensed software can be unlawful when used to protect a dominant position.
- Regulatory remedies can themselves become licence terms, such as uniform royalty schedules and notice before termination.
Second Circuit case (2002) holding that users who downloaded Netscape's SmartDownload by clicking a Download button were not bound by its licence, and its arbitration clause, because the only reference to the terms was below the button and the download did not unambiguously show assent.
- Licence scope
Lessons learned- Online licence terms bind users only if a reasonably prudent user would have noticed them and the user clearly assented, for example by clicking to accept.
- Record how each licence was accepted (clickwrap, installer prompt, signed order) as part of the entitlement evidence.
- Terms accepted for one product did not extend to a separately downloaded plug-in that had its own licence.
District court order (C.D. Cal. 2001) that denied Adobe a preliminary injunction against SoftMan, finding that the distribution chain for Adobe's boxed software involved sales of copies and that SoftMan, which never installed the software, had not assented to Adobe's end user license agreement.
- Resale and exhaustion
- Licence scope
- Copyright and IP
Lessons learned- A single payment for perpetual possession of a boxed copy may be treated as a sale of that copy, whatever the licence label says.
- A reseller that never installs software may not be bound by the EULA.
- Bundle and suite transfer terms and support registration rights should be recorded for each acquired product.
- This interim district court order is not binding precedent and was followed by a different Ninth Circuit test.
- Judgment
Seventh Circuit case (1996) holding that shrinkwrap licences are enforceable unless their terms are objectionable on grounds applicable to contracts in general, and that enforcing such a licence is not preempted by the Copyright Act.
- Licence scope
- Copyright and IP
Lessons learned- Licence terms presented in the package or on screen can bind a user who accepts them by using the software.
- Use restrictions tied to lower-priced editions, such as non-commercial use, can be enforced as contract terms.
- Contractual licence terms can apply even where the underlying content is not protected by copyright.
- Shrinkwrap terms remain open to general contract objections such as unconscionability.
Second Circuit case (1992) in which Altai conceded liability for code a former Computer Associates programmer copied into its OSCAR 3.4 program, and the court held that the clean-room rewrite OSCAR 3.5 did not infringe CA-SCHEDULER, adopting the abstraction-filtration-comparison test for non-literal elements of software.
- Copyright and IP
Lessons learned- Copyright protects the expression in a program, not its functions, interfaces dictated by compatibility, or standard techniques, so assess compatibility products on that basis.
- A documented clean-room rewrite, with the tainted developer and code excluded, was accepted as a remedy for literal copying.
- Employee confidentiality agreements and trade secret law can reach copying that copyright does not.
No cases match these filters.