Sunday, August 16, 2009

Changing Software Vendors: Can Leaving Old Software On Your Computer Be Copyright Infringement?

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Quantum Systems Integrators, Inc. v. Sprint Nextel Corp., 2009 WL 1931196 (4th Cir. July 7, 2009) deals with a company changing software vendors. In this case, Sprint stopped using Quantum's software. After entering into a settlement agreement, a number of Sprint's computers inadvertently were left with copies of Quantum's software on them. When Sprint employees rebooted the computers, Quantum's software was automatically loaded into the RAM. Sprint employees didn't realize that the Quantum software was being loaded and didn't actually use it. Quantum received messages from the computer showing that its software was being accessed.

After a jury trial, the district court awarded $69,000 for eight infringing computers and almost $400,000 in attorneys fees. For each computer, the jury awarded the license fee ($8,700 for each computer). The Fourth Circuit found that the district court properly rejected Quantum's attempt to obtain a portion of Sprint's profits, holding that Quantum had failed to sustain its burden of proof that any of Sprint's profits were "reasonably related to" the automatically generated RAM copies. The court also rejected Sprint's argument that it did not engage in "volitional" copying, finding that the RAM copies satisfied the fixation requirement and that since the computers were Sprint's the case was not analogous to a passive ISP or third party that does not have control over what passes through its system.

The Fourth Circuit upheld the award of actual damages but remanded for a determination of the reasonableness of the attorneys fees, noting Quantum's "minimal success" and the apparently disproportionate amount of attorneys fees awarded, in line with its case law applying Fogerty v. Fantasy Inc., 510 U.S. 517 (1994).

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Guest said...

I had a similar situation with a client that, fortunately, I was able to settle for less than the standard 3x license fee - details at

Guest said...

Thanks for bringing this case to my attention. I found the court's unpublished opinion at