software licensing copyright infringement
High Court cases involving copyright infringement of CRM database software and billing software have increased exponentially as software companies compete aggressively for the same licensees in the customer relations, content management and sales space.
The recent case of Ultrasoft Technologies Limited v Hubcreate Limited Case No: IP-2015-000042, at the Intellectual Property Enterprise Court, is a good example of how the fierce competition is being fought out through the courts. Judgment was handed down on Wednesday 16th March 2016 by Judge Hacon.
Ultrasoft was suing Hubcreate for copyright infringement of its customer relationship management and billing software. The companies were close competitors in providing serviced office software. In short they both provided software for business centres for automated business processes such as meeting room booking, sales, licences, invoicing.
Hubcreate admitted that it had copied some of Ultrasoft’s software infringing its copyright and database rights. However, Ultrasoft was not satisfied with the limited admissions. The two companies went to trial regarding the remaining infringements.
Both companies competed for the business of a number of the same licensees including Kingshott Business Centre (‘KBC’). Between 2006 and 2009, KBC switched between Ultrasoft and Hubcreate as licensor’s of their CRM and billing software. Eventually permanently switching to Hubcreate’s suite of software products licensed as “CentreCharge” by June 2009.
KBC wanted all its data transferred from the Ultrasoft system onto Hubcreate’s system and asked Hubcreate to do that for them. In other words to transfer KBC’s SQL database files from Ultrasoft to Hubcreate’s software platforms. A notoriously difficult thing to do in the technology world. Needless to say some of the data was lost and could not be transferred over. A second attempt to transfer KBC’s data over also ended up transferring Ultrasoft’s proprietary technology as well.
It was by chance that Ultrasoft discovered that Hubcreate had copied its proprietary technology. Ultrasoift had won over one of Hubcreate’s clients United Business Centres (‘UBC’). UBC had asked Ultrasoft to transfer over its data onto the Ultrasoft system. It was during this process that Ultrasoft discovered a Hubcreate file called ‘CentreCharge.ini’. This file allowed access to my SQL database of all Ultrasoft’s licensees. Leading to discovery of a number of copies of a number of files of Ultrasoft’s proprietary technology.
The files Hubcreate copied specifically were UltraBis, UltraBis2 and UltraCRM. This was admitted by Hubcreate. But Ultrasoft contended that the copying by Hubcreate went further. Firstly, by allowing all of its customer’s access to the three copied files they were issuing copies to the public under s.18 of the Copyright Designs and Patents Act 1988 (the Act); communicating files to the public contrary to s.20 of the Act; and infringing Ultrasoft’s database rights Regulation 16 of the Copyright and Rights in Database Regulations 1997. Secondly, that Hubcreate must have exploited Ultrasoft’s database merely because it had access to them.
The Judge dismissed Hubcreate’s submissions of statutory defences pursuant to s.50A to 50D of the Act and Regulation 19 of the Database Regulations in relation to database rights. Hubcreate also relied on the terms of Ultrasoft’s licensing agreement.
Judge Hacon found that Hubcreate had not infringed Ultrasoft’s copyright, beyond what had already been admitted, since none of Hubcreate’s customers, other than UBC, had access to Ultrasofts’s software.