German Software Company Sues US Gov't For Copyright Infringement

from the navy-pirates dept

A German software company, Bitmanagement Software, is now suing the US government for copyright infringement and demanding almost $600 million. The lawsuit, which was filed in the US Court of Federal Claims (basically a special court set up just for cases involving suing the US government for money), says that the US Navy copied Bitmanagement’s 3D virtual reality software, BS Contact Geo. Apparently, the Navy had tested the software and had an evaluation license allowing the software to be used on 38 computers. And then the Navy just copied it onto hundreds of thousands of computers.

The lawsuit notes that the Navy had specifically requested the removal of Bitmanagement’s usage tracking code, and then told the company that it wanted to license the software for upwards of 500,000 computers — but also that it started doing those installs while the company was still negotiating a license. While that negotiation was ongoing, someone (accidentally, apparently) forwarded an email to Bitmanagement indicating that the software had already been installed on 104,922 computers. Apparently, a few months later, the Navy also disabled some other tracking software, called Flexwrap. This part is a bit confusing in the lawsuit, since earlier it notes that the evaluation contract required Bitmanagement to remove tracking software, but then the lawsuit notes that later on it was the Navy that removed Flexwrap, “in violation of the terms” of the license.

This is also a rare copyright case where the plaintiff is asking for actual damages, rather than mere statutory damages. That’s partly because it notes that a single license of its software runs approximately $1,000 — and it believes the software may have ended up on 558,466 computers. Thus, it’s asking for $596,308,103, which is the market value of the unpaid licenses. If it had sought statutory damages, it would have been limited to just $150,000, as that’s the maximum per “work infringed.” But it’s also because the US government has a special super power, called sovereign immunity when it comes to copyright claims, basically allowing it to avoid a copyright lawsuit in a regular (“Article III”) district court. However, at least based on my understanding of the law, they can still go to the Federal Claims court (as Bitmanagement is) and seek the actual licensing fees.

It will be interesting to see how the US government responds. After all, this is the very same US government that regularly insists that copyright infringement is a horrible evil and that we need to ratchet up punishment for it. Yet, here is the Navy doing what appears to be fairly blatant direct infringement on software that it was evaluating, but failed to fully license. In the past, the US government has found itself negotiating settlements in similar cases. But, of course, none of that has resulted in the government recognizing that perhaps its hardline position on infringement by others is a bit extreme, considering its own behavior.

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Companies: bitmanagement

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Comments on “German Software Company Sues US Gov't For Copyright Infringement”

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54 Comments
DannyB (profile) says:

Re: Bunch of Pirates

Shouldn’t the US Government have to pay statutory damages of $150,000 on each copy which represents an infringement?

That is the kind of thinking the RIAA and MPAA would use, and that DOJ lawyers would use.

Surely they could find a way to argue for this. It’s what the US Government would do. Stretch it as far as it will stretch, and then some. Then stretch some more.

Daydream says:

Re: Re: Bunch of Pirates

It’s easy.
Each pirated copy, combined with the fact that every computer it’s installed on is unique and separate from every other computer, means that there are 558,466 unique counterfeit programs being used by the Navy, each using Bitmanagement’s proprietary code.
They haven’t pirated one work 550,000+ times, they’ve pirated 550,000+ works once each.

David says:

Re: Re: Re: Bunch of Pirates

No, it’s $150,000 per work infringed, which is one.

Ooooooh, I got it: can’t we watermark them? Like the license verifier apparently did? That brings the number of works up to the number of… Hm… original licenses, drats. 38.

Can the watermarks randomly self-modify?

Anonymous Coward says:

Re: Re:

Likely more than 2:1. Computers are not just the ones under or on top of your desk.

Every time you interact with a service you are always interacting with multiple devices. And while that certainly does not even come close to painting a whole picture you need to realize that there are a lot of servers out there crunching data on shit or just waiting around to be used 24/7.

I have 1 pc for my office, one in the living room, wife has one for herself, and a laptop for use where ever we need it. That is 2:1 ratio for me and my wife, not even counting our mobiles.

JoeCool (profile) says:

Re: Re:

That’s not as confusing as this:

the US Navy copied Bitmanagement’s 3D virtual reality software

What in the flipping hell does the Navy need with 500,000 copies of a 3D VR program??? I could understand a few hundred copies… maybe 1000 AT THE MOST. But 500,000? That doesn’t make any sense at all. There’s something else going on here that neither party wants to mention except in “code terms”. Considering it was laden with usage and tracking code, I expect this was really a surveillance program meant to spy on all Navy computers rather than a 3D VR program.

/Navy brat

JoeCool (profile) says:

Re: Re: Re: Re:

But that’s not the case. It clearly states it knows it was installed on at least 100,000 COMPUTERS, and may be on 400,000 more computers. Besides, NO ONE would license software for a super-computer on a per-core basis… not unless they were retarded (meant literally, not figuratively). While I could see Congressmen doing that, the Navy would not.

Anonymous Coward says:

Re: Re: Re:2 Re:

Besides, NO ONE would license software for a super-computer on a per-core basis…

Governments are not NO ONE, but rather its emloyees consider themselves to be someone, and so are excluded from your suggestion.
Microsoft uses at least a per computer, which equates to a node, as the basis for their licensing, they just give bulk discounts. They certainly would not allow a single license for a supercomputer or data centre installation.,

Groaker (profile) says:

Re: Re:

Why? I have 6 I7 PCs, about 20 Raspberries, 4 PineA64s, and about a dozen others, and I am retired. Depending on the problem I am working on, all of the I7s and the Pines can be working on it at the same time. The others are just there for data gathering, actuator control and development.

Keeping track of the weather world wide is important to the navy, and probably eats all the CPU cycles from several super computers. Many of which are clustered PCs. A lot of other disciplines eat computers by the shipping container load.

Anonymous Coward says:

Re: Re:

Well, my everyday setup is a dual headed laptop, a duel headed tower, a single headed desktop and a raspberry pi 3. Thes are integrated with Synergy to share the mouse, keyboard and clipboard, and Gigolo to manage cross mounting home directories via SSH. When working on 3d models in OpI use the dual head to run OpenSCAD and it message window on separate screens;. Pluma on the PI to edit the model, With Firefox on the desktop for the OpenSCAD manual, and the laptop for documents on whatever I am modelling. It is much easier to reference information by looking at another screen, than by switching virtual desktops or browser tabs.
If when doing that I want to keep up with Techdirt and other news sites, I can bring in a side table and add a second dual headed laptop.
At least one processor per task, and screen per Interactive task is the way to go.

That One Guy (profile) says:

Not my wallet, not my problem

In the past, the US government has found itself negotiating settlements in similar cases. But, of course, none of that has resulted in the government recognizing that perhaps its hardline position on infringement by others is a bit extreme, considering its own behavior.

Why would it? No fine is too much when you’re not the one who has to pay it, and no amount of legal hassle is overly burdensome when you can just tell someone else to handle it.

The ones pushing for ever harsher laws aren’t the ones who ever have to worry about being on the receiving end of those same laws, so one case like this or one thousand won’t make the slightest difference in their opinion(and that’s not even getting into how much questioning copyright would raise the hackles of those buying the politicians who write the laws).

Whoever says:

Flexwrap

Without knowing the details, I think what happened was:
1. Original software uses “FlexNet” licensing to limit use.
2. Vendor agrees to remove the FlexNet licensing (and hence any limits on usage), providing that the Navy uses Flexwrap to track the usage. This tracking data is (or can be made) available to the Vendor.
3. Navy then removes Flexwrap so that there now neither any limits on usage, nor any tracking of usage.

You are being watched (profile) says:

In the navy
You can sail the seven seas
In the navy
You can plunder as you please
In the navy
Come on now, people, make a stand
In the navy
Can’t you see we need a hand
In the navy
Come on, rob for the motherland
In the navy
Come on and join your fellow man
In the navy
Come on people, and make a stand.
In the navy (in the navy), in the navy (in the navy)

DB (profile) says:

It’s very unlikely that it was installed and used on all half million systems.

The count of system is likely where it was made available to install or use.

I predict that this part of their case will fail. While the case law isn’t fully developed, ‘Making Available’ isn’t what counts. Only the copies used count. Yes, immediate availability has value, and in common usage “copies” were made, but software has its own set of copyright quirks. Incidental copies (e.g. copying from disk to memory, from memory to cache, from cache to registers) aren’t counted individually.

From my government experience, it’s likely that the Navy did wrong. And that this company was screwed over. Almost certainly it wasn’t as bad as they claim, but without big numbers they haven’t a chance. They should be paid a generous fair value. Especially since they may not be getting future contracts, and they won’t be treated fairly in future dealings.

Anonymous Coward says:

I think a lot of people are missing a very important point of US law: Sovereign Immunity. Unless there’s already a contract in place (or law, and afaik there isn’t one covering copyright infringement) covering this specific instance of possible infringement, the US Government, including the US Navy, can’t be successfully sued for copyright infringement even if it’s otherwise clear infringement occurred. Having accepted a previous license, assuming the Navy ever did, doesn’t mean they are necessarily legally waving sovereign immunity.

PaulT (profile) says:

“This is also a rare copyright case where the plaintiff is asking for actual damages, rather than mere statutory damages. That’s partly because it notes…”

Actually, I think it’s because this is one of those rare cases where the company suing actually has evidence of not only the level of infringement, but also the actual amount of money lost to them.

It’s not a pie in the sky figure based on what they wish they could get if only every copy was a lost sale. It’s not trying to pretend that IP addresses are people and extrapolating out vague assumptions from that. It’s not trying to pretend that a single person sharing a few songs cost them millions. It’s a figure based on the nature of their licence and the known usage within the navy.

David says:

Re: Re:

I expect the judge to rule that those are not actual damages since the Navy would not have bought that many licenses either way and rather would have chosen to get away with fewer installations.

Or rather, I expect confidential settlement terms amounting to the same, with BSA members and others giving the Navy a sweet deal on unrelated software offsetting the cost in order to avoid such a devastating large-scale precedent.

Zarvus (profile) says:

the chiding in the article might make sense if...

… the government was a single entity and not hundreds of thousands of individual groups populated by individuals, or if it was the USPTO or Congress that had done this.

The military, on the other hand, seems to operate almost independently of the law. While they can all be grouped as “government” I’m more inclined to blame this on the military “we can get away with anything, we get US$600B/y to do whatever” mentality than “The Government”.

John85851 (profile) says:

Cognitive dissonance to the rescue!

Once again, the idea of cognitive dissonance (or the idea of believing 2 opposite viewpoints at the same time) comes to the rescue.
Copyright infringement is bad and we’ll prosecute everyone. Unless we do it, then it’s okay.
Hillary Clinton is a liar and should be put in jail. Donald Trump is a liar, but that’s okay.
A 16 year-old unwed mother is a drain on society’s resources. Except for Sarah Palin’s daughter, who’s being brave for doing it on her own.
Anyone addicted to drugs should go to jail. Except Rush Limbaugh, since he was addicted to prescription drugs.

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