Bitmanagement Software Gmbh v. United States
989 F.3d 938
| Fed. Cir. | 2021Background
- Bitmanagement develops BS Contact Geo, licensed primarily by PC/seat; it and reseller Planet 9 sold the Navy 119 seat licenses in transactions from 2006–2012.
- NAVFAC/Navy wanted broad NMCI deployment and discussed a floating-license scheme; Bitmanagement provided non‑PC‑specific license keys, a silent installer, and modified installers to enable Flexera "FlexWrap" tracking.
- In May–July 2012 the Navy ordered 18 licenses “enabled by NAVFAC using Flexera,” and Bitmanagement delivered BS Contact Geo v8.001.
- The Navy mass‑deployed BS Contact Geo across NMCI in July 2013; Flexera did not monitor/control the OCX (plugin) component, and the Navy did not buy additional licenses.
- The Court of Federal Claims found Bitmanagement established infringement prima facie but concluded an implied‑in‑fact license (based on the parties’ course of conduct and reliance on Flexera) authorized broad copying; it entered judgment for the government.
- The Federal Circuit affirmed the existence of an implied license but held the Flexera requirement was a condition precedent that the Navy failed to satisfy, so the Navy’s copying exceeded the license and constituted infringement; the case is vacated and remanded for damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an implied‑in‑fact license existed | No meeting of the minds; record insufficient | Parties’ course of conduct showed authorization | Court: implied license finding is legally supported and factually plausible; affirmed |
| Whether express reseller contracts preclude an implied license | Express agreements between Bitmanagement and Planet 9 preclude implied license with Navy | No privity; express contracts did not reflect direct Navy–Bitmanagement understanding | Court: preclusion rule does not apply on these facts; implied license not precluded |
| Whether the Navy complied with the Flexera term (condition) | Flexera use was a condition precedent; failure means infringement | Flexera was only a covenant; breach is a contract claim | Court: Flexera was a condition precedent; Navy failed to satisfy it (OCX not FlexWrapped) -> copying outside license = infringement; vacated and remanded for damages |
Key Cases Cited
- City of Cincinnati v. United States, 153 F.3d 1375 (Fed. Cir. 1998) (defines implied‑in‑fact contract/license principles)
- City of El Centro v. United States, 922 F.2d 816 (Fed. Cir. 1990) (elements for implied‑in‑fact contracts)
- Effects Associates v. Cohen, 908 F.2d 555 (9th Cir. 1990) (three‑factor test often used to infer implied license)
- Nelson‑Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505 (4th Cir. 2002) (discusses Effects factors)
- Jacobsen v. Katzer, 535 F.3d 1373 (Fed. Cir. 2008) (scope of license vs. infringement; conditions vs. covenants)
- Wang Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571 (Fed. Cir. 1997) (entire course of conduct relevant to implied license/patent context)
- Lulirama Ltd. v. Axcess Broad. Servs., Inc., 128 F.3d 872 (5th Cir. 1997) (totality of conduct can show implied license)
- United States v. U.S. Gypsum Co., 333 U.S. 364 (U.S. 1948) (standard for clear‑error review)
- Gaylord v. United States, 678 F.3d 1339 (Fed. Cir. 2012) (limitations on damages against government under 28 U.S.C. § 1498(b))
- June Med. Servs. LLC v. Russo, 140 S. Ct. 2103 (U.S. 2020) (deference to plausible factual findings on appeal)