An M60A2 tank is driven off an Army LARC 60 am...

Army logistics exposition PROLOG’85.  (USA) (Photo credit: Wikipedia)

In a case that demonstrates that no-one is above copyright law, enterprise software planning company Apptricity has sued the federal government for software pirated by the U.S. Army.

The two parties have reached a settlement for $50 million, although the claimed damages had been as high as $224 million. It probably helped that the Army will continue on as an Apptricity customer despite the legal tussle.

Sizing Up Software Licensing

Where the U.S. Army failed in this instance, as many tend to do, was in not realizing the limits of its license to use software that helps it manage troop movements. While it did pay for that use, the agreement with Apptricity covered only use on five servers and up to 150 individual devices. By 2009, however, the technology was in use on 93 servers and more than 9,000 devices around the world.

While this was certainly a compliment to the effectiveness of the company’s software, it was not being compensated for that privilege. At a cost of $1.35 million per server and$5,000 per device, the lost revenue was not something that Apptricity could ignore, even with the size and value of its federal client.

That the widespread usage was uncovered by accident and subsequently settled amicably suggests that both parties accept this was an oversight, rather than overt piracy. Nonetheless, it is a reminder that licensing agreements must be carefully drawn up and continuously monitored for compliance. If in doubt, it’s almost always cheaper to shell out for wider licensing and build in some slack, rather than running the risk of a trip to the courtroom.

Counting on Copyright

Apptricity deserves credit from copyright advocates everywhere for defending the value of its intellectual property (IP), despite the potential fallout if it lost the case or even failed to keep one of its most important sources of revenue.

With 80 employees at its Irving, Texas headquarters, the company is far from a tech giant but nonetheless represents the significance of copyright protection to small-to-medium sized businesses across the country. Rather than shrink from a daunting fight to protect that value, this company stood up for its IP and, in doing so, represented rights holders everywhere. To us, that’s another action worthy of salute!

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