March 2, 2021 - Federal Circuit Insights

U.S. Navy Breached Implied-in-Fact Software License, Federal Circuit Decides in Bitmanagement

Below is an excerpt from one of Morrison & Foerster’s blogs, Government Contracts, where our lawyers offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. The blog’s regularly-published Insights provide an in-depth analysis of developments and trends affecting government contracting. To read this post in full on our Government Contracts blog, please click here.

 


 

The Federal Circuit handed a substantial victory to Bitmanagement Software GMBH last week, finding the U.S. Navy had infringed the company’s copyright by installing its three-dimensional visualization software on hundreds of thousands of government computers without using license-tracking software to monitor and limit the number of simultaneous users.  The court’s decision is significant, not only in affirming the lower court’s finding that an implied-in-fact license existed between the government and Bitmanagement despite no privity of contract between the two (who transacted through a reseller), but also in taking the further step of holding the Navy to a key condition of that license, one the Navy failed to meet, with the potential for a hefty damages award to the software vendor.