Published by LawTechie - October 19, 2011 - LawTechie

Trusted Integration Inc. sued the US Department of Justice in district court for Lanham trademark infringement (false designation of origin), breach of fiduciary duty, and unfair competition, and in the Federal Court of Claims for breach of software license agreement. Trusted Integration Inc. v. U.S.. The case arouse out of the DOJ’s agreement to use Trusted’s software for IT security system which the DOJ sells to other agencies as per the Federal Information Security Management Act.

Apparently, the DOJ decided to cut Trusted out of the deals by integrating some of Trusted’s software into the DOJ product, and then telling certain agencies to buy from DOJ and keep Trusted out of it. For obvious reasons, Trusted sued.

What’s interesting here is that the district court dismissed Trusted’s trademark infringement and breach of fiduciary duty claims for lack of jurisdiction and for Sovereign Immunity reasons (it’s not easy to sue the government). The DOJ also moved in the Federal Court of Claims (which does have jurisdiction over contract claims against federal agencies) to dismiss the breach of software license agreement because it is the same claim between the same parties which was dismissed in a different court.

The Federal Court of Claims granted dismissal, but now the Federal Circuit Court of Appeals overruled and reinstated Trusted’s claim for breach of software license agreement, finding that prevailing on this claim requires substantially different types of proof than needed for the trademark infringement and fiduciary duty claims dismissed in district court.

Takeaway: A software license agreement isn’t just an end user license agreement with regard to enforcing against copyright claims, etc… A properly drafted agreement which, in most cases, restates the rights a software publisher has under common law anyway, can be used as a back door to sue under those rights as a plan B in different circumstances.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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