US Navy On The Hook For 'Pirating' German Company's Software

A couple of years ago, we discussed the somewhat ironic story of a German software company suing the United States Navy for pirating its software. The initial story was a bit messy, but essentially the Navy tested out Bitmanagement's software and liked it well enough that it wanted to push the software out to hundreds of thousands of computers. After Bitmanagement sued for hundreds of millions of dollars as a result, the Navy pointed out that it had bought concurrent use licenses through a third party reseller. While Bitmanagement pointed out that it didn't authorize that kind of license itself, the court at the time noted that without a contractual arrangement between the company and the Navy, the Navy had an implied license for concurrent users and dismissed the case.

Bitmanagement appealed that ruling, however, arguing that the lower court stopped its analysis too soon. The story there is that such an implied license would require the Navy track concurrent users across its 500k-plus computers it installed the software on, but it appears the Navy didn't bother to track concurrent users at all.

“We do not disturb the Claims Court’s findings. The Claims Court ended its analysis of this case prematurely, however, by failing to consider whether the Navy complied with the terms of the implied license,” the Appeals Court writes.

“The implied license was conditioned on the Navy using a license-tracking software, Flexera, to ‘FlexWrap’ the program and monitor the number of simultaneous users. It is undisputed that the Navy failed to effectively FlexWrap the copies it made,” the Court adds.

And just like that, the dismissal flips entirely and the Appeals Court has now remanded the case to determine damages. Again, Bitmanagement is asking for just under $600,000 in damages, given the wide scale of installations the Navy undertook with its software. With nothing tracking how many users concurrently used the software, the Navy doesn't really have any way to argue back that it complied with the implied license.

The real lesson in this is just how messy these sorts of copyright conundrums are. It's reasonable to believe that the Navy thought it was doing the right thing, even if it failed to comply with the implied license by monitoring concurrent users. But it's also reasonable for a software provider, with no evidence providing nuance, to simply see 500k-plus installations as mass copyright infringement.

But, in the eyes of the same United States that likes to put out reports on how terrible other countries are in respecting intellectual property rights, I guess the United States Navy is just a bunch of pirates now.