Dutch State (CJIB) v. Attachmate was a Dutch civil case over the number of licences the Centraal Justitieel Incasso Bureau (CJIB), the Dutch State’s agency for collecting fines, needed for the terminal emulation software Reflection for UNIX and OpenVMS. After a 2011 audit, Attachmate Corporation claimed that CJIB needed one licence for each of the 1,598 computers on which the software was installed, rather than the 750 it held. In an interim judgment of 29 August 2012 the Amsterdam District Court held that CJIB had enough licences until it moved its servers to Windows 2003. The reason was that the end user licence agreement (EULA) allowed licensing per user where Roaming User Profiles were used. For the period after the upgrade, the court asked the International Legal Institute (IJI) in The Hague for advice on the Washington State law that governed the EULA.[1]
Background
According to the judgment, CJIB used two applications on the VMS operating system to collect traffic and criminal fines, and used Reflection to reach them from a graphical interface. Between July 1996 and July 2002 it bought licences for the software, whose copyright was then held by WRQ, Inc. Attachmate merged with WRQ in 2005 and holds the copyright. Comparex (formerly PC-Ware) acted as Attachmate’s intermediary in the Netherlands. Under a 2003 framework agreement, Comparex supplied CJIB with software, usage and maintenance rights and related services. From 31 July 2007 CJIB held 750 licences with maintenance.[1]
Version 10 of the software, released on 23 September 2002, came with a EULA whose Article 1 allowed the customer to “install, use, access, display, run, or otherwise interact with (“Run”) one copy of the Software on a single computer or workstation”. The court summarised the main rule as requiring a licence for each computer that has the software installed or gives access to it. The exception, applying “If you deploy WRQ Software to an end user by establishing a Roaming User Profile setting in Windows NT or Windows 2000”, required a licence per end user. In EULA version 11 the words “in Windows NT or Windows 2000” were replaced by “in a Windows operating environment”. The parties agreed that the EULA was governed by the law of the State of Washington.[1]
On 6 December 2004 CJIB introduced flexible workplaces with Roaming User Profiles and installed the software on all 1,598 employees’ computers. About half of the employees were authorised to use it, and the number of licences stayed matched to the number of authorised users. Later, CJIB moved its server from Windows 2000 to Windows 2003.[1]
The dispute
On 24 January 2011 Attachmate asked CJIB to cooperate with a License Verification Request, and CJIB supplied the data. On 23 March 2011 Attachmate wrote that the software was installed on 1,598 computers against 750 licences, a shortfall of 848, and put its loss on licences and maintenance at EUR 1,725,120.32 excluding VAT. Maintenance ended on 30 June 2011 and CJIB stopped using the software on 31 July 2011.[1]
CJIB asked the court to declare that it had not breached its obligations and owed nothing, and in the alternative that Comparex was liable for having failed to advise it. Attachmate counterclaimed EUR 319,696 in licence fees with 12% contractual interest and EUR 582,992.80 for maintenance, and in the alternative an order giving its expert access to CJIB’s systems. Attachmate argued that the Roaming User Profile exception did not apply because CJIB had a standard licence and had installed the software on every computer. It also argued that the exception was limited to Windows NT and Windows 2000 servers. At the hearing it added that customers wanting roaming use had to buy its more expensive named user or concurrent user licences.[1]
Decision or outcome
The court split the period from 23 September 2002 to 30 June 2011 into three parts:[1]
| Period | Court’s finding |
|---|---|
| 2002-09-23 to 2004-12-06 | CJIB documented that the software was installed only on authorised users’ computers until 6 December 2004. Attachmate’s bare denial, based only on the release date of version 10, was insufficient. No breach |
| 2004-12-06 to the move to Windows 2003 | The EULA expressly let a roaming user install and use the software on several computers as long as only one copy was used at a time. Installing it on more computers than there were authorised users was therefore allowed, and the user count never exceeded the licences. No breach, and no extra maintenance due |
| From the move to Windows 2003 (fixed at 2008-10-01) to 2011-06-30 | Whether “Windows NT or Windows 2000” was a closed list or examples depended on whether, under Washington law, the wording was ambiguous or “reasonably in dispute” so that extrinsic evidence could be used. The court referred ten questions to the IJI |
The court rejected Attachmate’s argument about named and concurrent user licences, because the applicable EULA expressly mentioned Roaming User Profiles and Attachmate had referred only in general terms to its business model. It also rejected CJIB’s defences that Attachmate had waived its rights or complained too late. CJIB had not shown that Attachmate or Comparex knew of the Windows 2003 migration, and an audit about two years after the migration did not forfeit any rights.[1]
The court also set out how damages would be assessed if CJIB were found in breach for the third period. Licence damages would be the list price per licence at the time of the breach, with 12% contractual interest from that date, not the lower prices CJIB had paid for its licences between 1996 and 2002. Because CJIB had not disputed that maintenance had to cover all licences or none, maintenance damages would use the list price for each year from the migration to 30 June 2011, with statutory interest. The court declined to reduce this on the ground that CJIB had never used an upgrade.[1]
The claim against Comparex failed. CJIB had not shown that Comparex had a duty to investigate, on its own initiative, the licensing effect of a Windows upgrade, or that it knew of the migration. The indemnity in the framework agreement did not cover claims by Attachmate, which was the copyright holder and not a third party in the sense of the clause.[1] The judgment was an interim one that reserved all further decisions. No later judgment in the case is published on rechtspraak.nl.[1]
Significance for software licensing and SAM practice
The case shows how an audit based on installation counts can overstate a shortfall where the licence counts users in some deployments. The court read the EULA’s own wording to allow per-user counting for Roaming User Profiles and did not accept the vendor’s later argument that roaming use required a different licence type.[1] It also shows the risk in licence terms that name specific platform versions. CJIB’s exposure for the last period turned on whether a server upgrade took it outside the exception. The judgment records that later EULA versions (14 and the current one at the time) no longer allowed Roaming User Profiles at all.[1] Other disputes over the same product family in the United States are covered in Attachmate v. Health Net and Epic Systems v. Attachmate. For the general mechanics, see software license audit.
Lessons learned
- Count by the metric the licence actually uses. The court held that, where Roaming User Profiles were used, the EULA required a licence per authorised end user. Installing the software on all 1,598 computers did not breach the licence while only authorised users had access and their number stayed within the 750 licences.[1]
- Platform changes can change compliance. Attachmate argued that the exception covered only Windows NT and Windows 2000, and the court could not decide the point without expert advice on Washington law.[1] Check whether licence terms name operating system versions before an infrastructure upgrade, and record which EULA version applies.
- Keep deployment records. CJIB’s report on the Windows 2000 rollout fixed the date of the wider installation, while a sign-off form did not prove the Windows 2003 migration date.[1] Dated change records decide which period falls under which terms.
- Expect list price, not historic price. The court said damages would follow the list price at the time of the breach plus 12% contractual interest, and maintenance would follow yearly list prices.[1]
- Do not rely on the reseller. The claim against Comparex failed for lack of a specific duty to advise about the upgrade, and the indemnity did not cover claims by the copyright holder.[1]