German Software Maker Targets U.S. Navy for Copyright Infringement

• The U.S. Navy installed a software tool on its entire network even though they only had a single license.
• This basic error may cost the U.S. government almost $600 million in damage compensation.
• The creator of the software and plaintiff in the relevant legal case is a German firm named Bitmanagement.

A German software developer named Bitmanagement has turned to the United States Court of Appeals for the Federal Circuit to seek the overturn of a previous decision (September 2019) of the Claims Court that dismissed a copyright infringement claim against the U.S. Navy.

According to experts in the field, Bitmanagement has a very good chance of getting vindicated this time, as the Appeals Court maintains that their lower-level colleagues have ended the analysis of the provided evidence prematurely. If that happens, the Germans will be entitled to $596,308,103 calculated as unpaid licensing fees to be met by the U.S. government.

The story begins in 2011, when the U.S. Navy acquired "BS Contact," a 3D VR platform, and started testing it for a variety of purposes. The maritime force officials apparently liked the software, so they gave the order to install it across its entire network consisting of 558,466 computers. Having sold a license for a single computer, Bitmanagement felt that this was a blatant case of mass copyright infringement, so they took legal action against the Navy several years later, in 2016.

The Navy maintains that this case was all a big misunderstanding, as they were actually making arrangements with a reseller, Planet 9 Studios, who just told them to use the Flexera user tracking solution and relay the data to them for the acquisition of additional licenses.

Bitmanagement never agreed to a solution of this kind, and the U.S. Navy never actually used the Flexera tracking solution properly anyway. So, while there was no contract between the two entities, the U.S. Navy’s officials thought they had an “implied license” to use the tool as they pleased.

The current situation threatens to bind the U.S. government into paying significant compensation to the German software maker, burdening the country's taxpayers, all due to a basic mistake. Also, this highlights the potential risks of what not relying on internally or at least locally developed software entails. In recent years, Microsoft has been the main provider of AR software and hardware to all branches of the American Army, which minimizes the chances of having to deal with disputes of this kind.