Trimble Solutions Corporation v. Quantum Dynamics Inc. is a 2021 decision of the Federal Court of Canada in which the developer of the Tekla Structures building modelling software, and its Canadian reseller, obtained default judgment against a steel fabrication company and its director for using unlicensed copies of the software. The evidence came mainly from anti-piracy telemetry embedded in the software, which recorded 335 unlicensed use events on six devices. The director had admitted the use, signed a licence agreement and asked for a payment plan, but never paid. Justice Pentney awarded C$212,931 in general damages, C$50,000 in punitive damages and C$5,000 in costs, issued a permanent injunction, and held the director jointly and severally liable.[1]
Background
Trimble Solutions Corporation, based in Finland, develops Tekla Structures, a program for three-dimensional modelling and design of steel and concrete structures. BuildingPoint Canada Inc. sells it in Canada under an exclusive reseller and licensing agreement and sets Canadian prices. At the time, BuildingPoint charged a one-time fee of C$30,000 for a perpetual licence and C$6,150 a year for maintenance. After a signed contract and payment, the customer receives download credentials and a licence certificate.[1]
According to the decision, Trimble built two technical measures into the program. A licence verification tool checks at start-up whether the copy has a valid licence. Because some modified copies bypass that check by altering .dll files, a second, anti-piracy component runs when it detects tampered files. It records the time, IP address, device MAC identifier and Wi-Fi information of the use and reports it to the provider’s servers, after checking the event against every active Trimble licence.[1]
The dispute
In February 2018 Trimble and BuildingPoint became aware of unlicensed use of version 20.1. A December 2019 infringement report showed 335 unlicensed use events between 30 January 2015 and 27 March 2019 on six devices. Geolocation data placed events at Quantum Dynamics’ business premises and at the director’s home, and host names, user names and an email address in the report matched the director and the company.[1]
The steps before litigation were:[1]
| Date | Event |
|---|---|
| February 2018 | BuildingPoint quotes the director for two perpetual licences and two maintenance subscriptions, then cannot reach him |
| 2019-02-11 | A software compliance association working with BuildingPoint writes to the company about the unlicensed use |
| 2019-02-20 | The director apologises, says the software was installed by engineers and drafters without permission and that all copies were deleted, and asks for a quote for one licence |
| 2019-02-20 | The association replies that this is the “final attempt” to resolve the matter amicably and sends a customer order and software licensing agreement |
| 2019-02-22 | The director returns the signed agreement and asks for a payment plan |
| After that | No further contact and no payment; unlicensed use events continue until 2019-03-27 |
Trimble and BuildingPoint sued for copyright infringement on 28 May 2019. The defendants were served but filed no defence, and the plaintiffs moved for default judgment.[1]
Decision or outcome
Infringement proved by telemetry and admission
The court stressed that default judgment is not automatic and that the evidence had to be clear and convincing. It held that copyright subsisted in version 20.1, and that each time an unlicensed copy was opened, a local copy of the object code was made on the device, which infringed Trimble’s reproduction right. Although it could not be known who used each device at each moment, the host names, user names, email addresses and Wi-Fi geolocation evidence connected the devices to the company and the director, and the devices were under their control at their premises. The director’s email confirmed the use. The court also noted that use continued after he said the copies had been deleted.[1]
Damages
The court used a notional licence fee as the measure of damages, because Trimble regularly licensed the software under a detailed pricing structure and the director had asked for a quote and signed the agreement. It took into account the price quoted to the defendants, the length of infringement, the absence of evidence on profits, and the three-year limitation period in section 43.1 of the Copyright Act.[1]
| Element | Basis | Amount |
|---|---|---|
| Licence fee | C$30,000 perpetual licence for each of six devices | C$180,000 |
| Maintenance | The discounted C$3,659 a year quoted in 2018, for each year of use per device within the limitation period | C$32,931 |
| General damages | Total | C$212,931 |
| Punitive damages | Admission, failure to delete, failure to pay after signing, non-participation | C$50,000 |
| Costs | Lump sum | C$5,000 |
Pre-judgment interest at 1.5 per cent ran from the compliance letter of 11 February 2019, and post-judgment interest at 2.0 per cent.[1]
Director liability and injunction
The court held the director jointly and severally liable, because many events showed his user name or email address, and all 335 events occurred at the company’s premises or his home. It issued a declaration and a permanent injunction against further infringement.[1]
Significance for software licensing and SAM practice
The decision was made without a defence, so the court’s findings rest on the plaintiffs’ evidence alone. It is nevertheless a clear example of how in-product telemetry is used in licence enforcement against businesses:
- Telemetry as evidence. The court accepted device identifiers, user and host names and Wi-Fi geolocation as sufficient to attribute use inside a company’s premises, where infringement is otherwise hard to prove.[1]
- Per-device pricing. The award counted one perpetual licence for each device that ran the software, plus maintenance for the years of use, rather than the number of use events.[1]
- Quoted price matters. The court used the discounted maintenance price the reseller had quoted in 2018, not the later list price.[1]
- Installations by contractors. The director had said that engineers and drafters hired by the company installed the software without permission; the court still found the company and the director liable, because the devices were under their control and at their premises.[1]
Lessons learned
- Telemetry can prove unlicensed use inside a company. The court relied on device, user, network and location data from the software itself, together with the director’s admission.[1]
- Damages followed devices, at the quoted price. Six devices meant six perpetual licences, with maintenance at the price quoted to the defendants.[1]
- Saying the software is removed, and then using it, aggravates the position. Continued use after the promise of deletion was one reason for the C$50,000 punitive award.[1]
- Directors can be personally liable. The director’s personal involvement led to joint and several liability with the company.[1]