Friday, December 30, 2011

Software Company Copyright Infringement Damage Award Knocked Down By Judge

One of the companies, Real View, downloaded an infringing copy of the other company's (20-20 Technologies) software via a file sharing network. Real View then used the software to learn about what 20-20 was offering, and modified its own software to include some similar features, and then used a different business model which undercut 20-20's business model quite a bit. 20-20 sued for infringement both over the download and over the software. The jury said that the new software didn't violate anyone's copyright, as reverse engineering similar features to a competitor is not infringement.

However, since the initial download was infringing, the jury did have to rule on the damages there.  20-20 argued that Real View should pay $38M, which is the amount 20-20 spent to buy a competitor company. Failing that, 20-20 argued that Real View should pay $2M due to "price erosion." Real View said it should pay 20-20's standard license fee of $4,200--although apparently 20-20 wouldn't have licensed the software at all to Real View, making the license fee calculation somewhat hypothetical. Real View also admitted to about making three-quarter million dollars in profits from its own licenses. The jury came back with an award of $1.37M. In this ruling, the judge issued a remittitur down to $4,200, holding that Real View only was liable for the license fee for the unauthorized download--everything else wasn't proved or was irrelevant.


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