The US Navy pays a German company $154,400 after losing a piracy lawsuit

Briefly: According to the Court of Federal Claims, the US Navy is a pirate. But this isn’t skull and crossbones, Blackbeard-style hacking. The military branch has lost a software copyright infringement lawsuit and must pay the developer $154,400. But it’s not all bad news for the Navy: The company that filed the lawsuit initially wanted $600 million.

German company Bitmanagement Software has again filed a federal lawsuit against the Navy 2016. The complaint alleged that the Navy agreed to license 3D virtual reality software BS Contact Geo on a limited, trial basis in 2011 and 2012. The trial involved installing the software on 38 computers for testing and integration into Navy systems.

The Navy was so impressed with the software that it allegedly led the developer to believe it planned to purchase additional licenses for large-scale deployment in 2013. Negotiations took place between 2013 and 2015, during which time Bitmanagement disabled copy-protection software on a BS called GEO at the Navy’s request.

Bitmanagement says that despite only paying 38 licenses, the Navy has installed BS Contact Geo on at least 558,466 machines. Flexwrap, which tracks the number of duplicates, was disabled in 2014, so the actual number of duplicates could have been higher.

Since the licensing fee for each piece of software cost about $1,067 at the time, Bitmanagement felt it owed $596 million for the use of its software, which led to a lawsuit against the government. The Navy’s response was a separate court filing claiming that the licenses it purchased allowed additional copies to be made without incurring additional fees. According to the suit, the Navy uninstalled the BS Contact Geo software from all of its computers and “subsequently reinstalled the software on 34 seats, for inventory purposes” after the lawsuit was filed.

log Writes Bitmanagement’s original lawsuit was dismissed in September 2019, only to be revived by the Federal District in February 2021. The Navy was found liable for copyright infringement because it never used Flexera’s license management application to monitor concurrent users and determine how many additional licenses were required, as per provided for in the terms of the license.

Most importantly, David Kennedy, a Certified Public Accountant (CPA) for Pricewaterhouse Coopers, Identifies The price per license is $200, not $1,067. As such, the judge awarded $154,400 to Bitmanagement. The Navy will also have to pay “late compensation” at a later, unspecified date.

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