When breach of contract and copyright infringement disputes concerning software licenses arise, the scope of the permitted access and use of the license is often the subject of the disagreement. In fact, a dispute concerning the scope of a software license rivals license fee disputes as the most oft-litigated aspect of the licensor-licensee relationship. Permitted use often is a special subset of disputes, particularly when a software license uses broad terms to define current or potential future licensee, such as to include affiliates, subsidiaries, and assignees of the named licensee.
A recent case in the Southern District of New York typifies why and when software license litigation will materialize. In PaySys International v. Atos Se, Worldline SA, Atos IT Services, No. 14-cv-10105 (KBF) (S.D.N.Y. Dec. 8, 2016), a licensor sued licensees and one of its affiliates based on purported copyright infringement of transaction management software. The causes of actions alleged evoke hallmarks of archetypal software license disputes. The licensor alleged infringement based on the licensee’s hiring of distributors outside the scope of the license, invalid assignment of the licensee’s rights to an affiliate, and failure to adhere to the protocol for when a sublicensee submits an order to the licensor.
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