This morning, the Federal Circuit issued a precedential opinion in a copyright case, vacating a decision by the Court of Federal Claims, which had absolved the U.S. Navy of copyright infringement. Here is the introduction to the opinion.

Bitmanagement Software GMBH v. United States (Precedential)

In 2013, the United States Navy (“Navy”), through the Naval Facilities Engineering Command (“NAVFAC”), copied BS Contact Geo version 8.001, copyrighted graphics-rendering software created by German company Bitmanagement Software GmbH (“Bitmanagement”), onto all computers in the Navy Marine Corps Intranet. No express contract or license agreement authorized the Navy’s actions. In 2016, Bitmanagement filed a complaint against the government in the United States Court of Federal Claims (“Claims Court”), alleging copyright infringement pursuant to 28 U.S.C. § 1498(b). After trial, the Claims Court found that, while Bitmanagement had established a prima facie case of copyright infringement, the Navy was not liable because an implied license permitted it to make the copies. See Bitmanagement Software GmbH v. United States, 144 Fed. Cl. 646 (2019). Bitmanagement appeals from that decision.

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 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 and, thus, that Flexera tracking did not occur as contemplated by the implied license. The Navy’s failure to comply creates liability for infringement. We therefore vacate the Claims Court’s decision and remand for a calculation of damages.

NEWMAN, Circuit Judge, concurring.

I concur in the judgment of copyright infringement, and join the court’s order of remand for determination of just compensation. However, I do not share the court’s reasoning that there was an implied license from Bitmanagement – although I agree that if such license existed, it was breached by the Navy.

I discern no license, implied or otherwise, for the Navy to make hundreds of thousands of copies of Bitmanagement’s commercial software product “BS Contact Geo.” The Navy made the copies using Bitmanagement’s keys and installation file, and admitted that it distributed the copies throughout the Navy, although without authorization, without license, and without payment. The Navy has not justified this improper copying; it violates the terms of its purchases of Bitmanagement’s product, and violates Bitmanagement’s copyright.