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Entergy Services, Inc. v. Attachmate Corp.

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This article is about the 2013 to 2014 federal lawsuit over the amount owed after an Attachmate licence audit of Entergy. Attachmate later became part of Micro Focus, which OpenText acquired in 2023. It is not legal advice.

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Entergy Services, Inc. v. Attachmate Corp. was a 2013 to 2014 lawsuit in the United States District Court for the Eastern District of Louisiana that followed a software licence audit. Entergy Services, which had bought Attachmate terminal emulation software from 1990 to 2004, admitted that it had too few licences but disputed how much it owed. It sued for a declaratory judgment on its rights and obligations under the licence agreements.[1] The court’s ruling that an audit claim priced as licence fee times quantity is a liquidated sum, on which prejudgment interest can run, is the main point of interest. The case was terminated on 2014-12-04 and is recorded as settled.[4]

Background

From 1990 to 2004 Attachmate sold software to Entergy Services. Entergy was required to buy a licence for each computing device on which Attachmate software was installed or that could access it. As the court put it, “[i]ntentionally or unintentionally”, Entergy did not buy enough licences, and its complaint conceded “that it is required to purchase additional licenses”.[1]

The dispute

In January 2013 Attachmate started a software audit, which found over-deployment in breach of the licence agreements. Attachmate calculated that Entergy owed more than USD 1.7 million, including prejudgment interest at 12 percent. Entergy admitted the over-deployment but said the figure used 2013 licence fees for products that were different from those at issue, and was therefore “grossly inflated”. After negotiations failed, Entergy filed suit; Attachmate counterclaimed. The licence agreements chose Washington law.[1]

Decision or outcome

Prejudgment interest (2014-08-20)

Entergy moved for summary judgment that Attachmate could not recover prejudgment interest. It argued that the agreements had no liquidated damages clause and did not say that an over-deploying user would pay the list price at the time of an audit, and that Attachmate needed an expert to calculate its claim. District Judge Kurt D. Engelhardt denied the motion.[1]

Under Washington law, prejudgment interest is allowed on a liquidated claim, one where the evidence makes it possible to compute the amount “with exactness, without reliance on opinion or discretion”. The court held that a liquidated damages clause is not required, and that a dispute over the amount does not make a claim unliquidated. Attachmate’s claim rested on “two terms, the price of the licenses and the number of over-deployed licenses”, so a fact-finder could calculate it from objective criteria. Even if Entergy succeeded in showing that the wrong fee schedule had been used, the claim could still be computed from objective data and stayed liquidated. Reliance on expert testimony did not change that.[1]

Attachmate then moved for partial summary judgment on copyright infringement for over-deployment of four products: EXTRA! Personal Client 6.3, EXTRA! for Windows 6.4, Reflection for HP 10.0 and Reflection for Unix 9.0. Entergy did not oppose liability on that narrow issue but disputed any method of quantifying damages and any suggestion that its conduct was wilful. The court granted the motion “on the narrow grounds stated”, leaving damages and wilfulness open.[2] In November 2014 it took judicial notice of Attachmate’s copyright registrations, again without opposition.[3]

Settlement

The case was terminated on 2014-12-04. The Federal Judicial Center’s Integrated Database records the disposition as “Settled” and a monetary demand of USD 1,708 thousand. No settlement terms are public.[4]

Significance for software licensing and SAM practice

The case shows how an admitted audit shortfall turns into an argument about price and interest:

  • Interest adds up. Over-deployment that went back years produced a claim in which interest at 12 percent was a significant component, and the court allowed that claim to proceed.[1]
  • Which price list. The real dispute was whether the shortfall should be priced at current (2013) fees or at the fees for the software actually deployed. The court did not decide that question; it held only that either way the claim could be calculated.[1]
  • Contract and copyright together. Over-deployment exposed the customer to copyright liability as well as a contract claim, as in the earlier Attachmate v. Health Net case.[2]

See software licence audit.

Lessons learned

  • An audit shortfall priced as licence price times number of over-deployed copies can be treated as a liquidated sum that carries prejudgment interest. The court held that Attachmate’s claim could be computed from a price term and a quantity term without discretion.[1]
  • Interest can be claimed even when the licence has no liquidated damages clause and the amount is disputed. The court rejected both arguments under Washington law.[1]
  • Conceding over-deployment leaves only the price to argue about, so check entitlement records before conceding. Entergy’s concession meant liability for four products was not contested.[2]
  • Decide early which price list applies to a historical shortfall: the one in force when the software was deployed or the one at the time of the audit. That was the heart of Entergy’s dispute with the USD 1.7 million figure.[1]

References

  1. Entergy Services, Inc. v. Attachmate Corp., No. 13-5297, order and reasons denying motion for summary judgment on prejudgment interest (E.D. La. Aug. 20, 2014), Doc. 99Effective 2014-08-20. Retrieved 2026-10-02.
  2. Entergy Services, Inc. v. Attachmate Corp., No. 13-5297, order and reasons granting partial summary judgment (E.D. La. Oct. 15, 2014), Doc. 109Effective 2014-10-15. Retrieved 2026-10-02.
  3. Entergy Services, Inc. v. Attachmate Corp., No. 13-5297, order and reasons on judicial notice of copyright registrations (E.D. La. Nov. 21, 2014), Doc. 117Effective 2014-11-21. Retrieved 2026-10-02.
  4. Entergy Services, Inc. v. Attachmate Group, No. 2:13-cv-05297, Federal Judicial Center Integrated Database record (E.D. La.)FJC Integrated Database fields as displayed by CourtListenerRetrieved 2026-10-02.

See also

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