U.S. government settles software piracy case

U.S. government settles software piracy case

Summary: The Army used thousands more copies of a system than what they paid for, and tried to hack the software to get around the licenses, the software company alleges. The government is paying $50 million to make the case go away.


The US government has paid $50 million to settle a software piracy case. The vendor is enterprise software company Apptricity.


Apptricity had supplied software to the US Army logistics software for managing and tracking the locations of troops and supplies around the world.

In their complaint against the US, filed in February of 2012, Apptricity said that the Army had installed their software on to thousands of servers and other devices for which they had no license. Apptricity claimed $224 million in damages for approximately 100 server and 9,000 device licenses the U.S. Army installed and fielded globally, but did not procure.

Apptricity says that their software allows tracking in real time across multiple time zones. Individual items can be tracked, including what container or vehicle they are in.

In their complaint, Apptricity alleges that in addition to using more copies than they were entitled to, the Army tried to get out of paying by tampering with the software:

"During fiscal year 2010 if not earlier, the Army had engaged another contractor, Future Research Corporation of Huntsville, Alabama, to reverse engineer a portion of Apptricity's software application suite ... to replace certain infringed intellectual property rather than pay for the license shortfall."

Hat tip to the Washington Post.

Topics: Government US, Enterprise Software

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  • $50 Million

    for $224 million in software? Sounds like a deal to me. Also, isn't that reverse engineering a violation of the DMCA?
    • It's a deal to both

      Yes, it's a deal for $224M in software, but Apptricity probably wants to win another Government contract at some point in the future, too, so you have to balance current, fair compensation with future sales.
  • Nope.

    You can reverse engineer whatever you want... just don't infringe any mathematic patents along the way.
    • jessepollard: "You can reverse engineer whatever you want"

      Not true. The license agreement for proprietary software almost always includes a provision prohibiting the licensee or a 3rd party, on the licensee's behalf, from using reverse engineering to derive the software source code. In addition, the use of decompilers and disassemblers, often used in reverse engineering, is also prohibited.

      Perhaps your thinking of something else ...
      Rabid Howler Monkey
      • Actually... "Perhaps your[sic] thinking of something else"...

        First, an EULA is not a law. This has been upheld by the courts (despite even the Government's very famously trying to misuse the "Computer Fraud and Abuse Act", by falsely claiming that violating such a "license" actually does constitute a criminal act in, and of, itself.

        Furthermore, an EULA does not (and cannot) trump Federal law, nor consumer (or, citizen) rights. This has also been established time and time again by many, many, courts (State, and Federal).

        And while any company may attach a plea (End User License Agreement) stating that; by merely using a product (for which, the consumer has paid remuneration) the consumer agrees to waive all rights... the courts have, when such "licenses" have been challenged, repeatedly found such "License Agreements" to be "inherently unfair", and therefore, void and unenforcible.

        Perhaps you "Rabid Howler Monkey" are thinking of the "DMCA". In which case, unsurprisingly, you are wrong again, since even the "DMCA" has several exceptions (already validated by the courts) for "reverse engineering" (and, even, intentionally bypassing so-called "copyright enforcement technologies"). The courts have generally held that these exceptions include, both, "interoperability" and "fair use". Furthermore, even "patent law" generally only applies to commercial exploitation. And, does not protect the actual methods (contained within the product) from discovery (especially since the patent itself is, by definition, a public disclosure of the technological-method, itself).

        Though... in the end... I would like to thank you for pointing-out the, numerous, blatantly-abusive and nefarious deceptions that some, unscrupulous, "proprietary", software vendors -HAVE- attempted to impose. Perhaps that is why so much of the IT world is moving, so quickly, to "Open Source" solutions.
        Gayle Edwards
        • BOOM

          End of conversation
        • Apple v. Psystar

          Apple's OS X EULA prevailed. And Apple has also used this EULA successfully on other parties.

          So, ignore the EULA at your peril.

          Like FOSS? Fine, use it. :)
          Rabid Howler Monkey
          • Then, check out IBM v. PSI and IBM v. TurboHercules

            As IBM ties its mainframe operating systems to its hardware (very similar to Apple with OS X).
            Rabid Howler Monkey
          • I might be impressed if...

            I hadn't seen this exact type of rhetorical come-back, so many times...

            "So, ignore the EULA at your peril."

            Or, the equally, often, repeated "...fine do it and see what happens".

            Frankly, this is one specific type of response that is almost always seen when there is no cogent, nor compelling, counter argument to assertions of precedence, and verifiable fact.

            In short...

            ...desperately resorting to a thinly-veiled warning of unspecified, and dire, repercussions if a provably-false assertion is challenged by someone who refuses to be bluffed by ignorant, or deceptive, bluster.

            Kind of sad really.
            Gayle Edwards
          • Stick to EULAs signed by 'Ty Coon'

            You'll be much happier.
            Rabid Howler Monkey
  • Target Acquired

    Coordinates set for drone strike.
    • Hahahahaha

      This is classic, you sir have won the internet!
  • It seems that

    the US guvvamint has no morals when it comes to screwing over its citizens and companies. QUOTE "when you have friends like these ....."
  • If a private business did that

    then had an audit they would be shutdown, fined, owners put in jail. Folks that has happened.
    • ....and

      And the settlement wouldn't be 20% of the loss. It would be more like 100% plus litigation fees.

      It seems like we don't have the whole story. Is this a matter of the Army outright trying to screw a vendor or did perhaps this vendor create a problem for them at some point in the relationship? I am inclined to assume the latter because the Army got a good deal on this settlement for sure, and nothing is free.
  • The Real Question

    The real question should be "How did they know how many Army computers were using the software illegally unless the company has "Phone Home" imbedded in their software?"
    • The Real Question

      Because the government itself inadvertently *told* them! Read the complaint, they documented it clearly -- they found out about it in a meeting that was bragging about how great the software was in the PD-TIS meeting (see paragraph 23 in the complaint link) and that the "Army was deploying thousands of devices with the Apptricity software."