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The court based the award on “actual usage” of the software (i.e. auditable use by uniquely identifiable users). In a real life contract negotiation, the Navy would have purchased far more licenses. Enterprises tend to buy surplus licenses so they don’t need to renegotiate and in some cases in defense deals the government actually has to buy the software for everyone, and cannot license only for specific people due to internal guidelines. This could have and should have been a lucrative deal for the german software company, instead the Navy went ahead with deploying the software widely without a legitimate license deal in place.
I don't want to say anything too specific, but for our SaaS company, it's very common for larger clients to pay an effective price that's around 2x the intended "call us" sticker price even after negotiated discounts because they overbuy on long-term fixed-price contracts and then fail to grow into them (I don't know if this is merely a recent trend due to hiring freezes or if it's always like this).

Our default plan type is active-user pricing (i.e. only pay for active users each month), and most large companies would save a ton of money if they stuck with this instead.

Their goal is to create cost predictability and ensure things are budgeted for. It's about reducing risk and locking in cost. In some cases, if the cost is discretionary, people may also want to ensure they spend their budget so it isn't cut. But in the >10k MRR territory usually that is budgeted for and approved through multiple levels and not coming out of a team budget. Going back to ask for more later is too time consuming.
It's cool that a German SW company can sue the US Navy and win. Take a moment for that to sink in.
Why? $150K just a slap on the wrist for the Navy, and the whole "actual usage" argument is suspect, but I'd love for a cyber law expert to weigh in here.
Poor choice of words.
It was almost definitely intentional.
I thought it was a good pun
I guess you didn't see the depth of that one
It's super interesting to see the court go for active user and not install when calculating damages, may be the first acknowledgement ever that piracy distribution figures aren't a reasonable source for calculating damages.
This stood out to me as well. If the damages is only based on actual usage/active users, it seemingly values availability of the software at $0.

The value of this software to the Navy I would argue is much more than how many active users ever actually used it. Given that Navy need to have software available to rapidly deploy in worst case scenarios (large conflict requiring extensive use of a particular type of software), this would often or usually necessitate acquiring many software licenses to be purchased, even though they'd typically never get used in peacetime situations.

As another example, a business may have a disaster recovery plan that would make extensive use of alternative cloud-hosted remote computing services. If the business waited until the next global pandemic to purchase and setup these services, they'd likely be met with "sorry our capacity is full" responses from providers. Thus the business should be paying for the service at all times as if the disaster recovery plan could be immediately activated and alternative cloud-hosted remote computing services used immediately without risk of a "sorry out capacity is full" response. This service is worth a significant amount to the business as without the service in place and ready to use at a moment's notice, the business would have an unmitigated and costly risk presenting a much higher future liability to the business.

As one last example, if a jukebox existed with a library of 1,000,000 pirated songs for users choose from, wouldn't this be more valuable than a jukebox with a library of only 1,000 pirated songs for users to choose from? Whilst only 500 songs from each jukebox may have ever been selected and played under similar conditions, users (and thus the venues hosting the jukeboxes) would more highly value the first jukebox with a larger library to play the exact song users want to listen to, not a song that is only similar enough.

Had this not been the government deferring to the government I might agree with you.

As an entity with large legal and IT resources at its disposal there is no reason for this scale of violation. Especially if there is a per install license and acknowledgement.

Lots of commercial software is licensed that way
yes! but lot of piracy argument about losses consider installations and distribution totals, not actual usage.
>This figure is lower than the $370 per install that was negotiated earlier. However, the expert witness believes that this is warranted due to the large volume of the deal and the fact that the software company’s cash position was rather low at the time.

Interesting how the court is using the business' past financials to reconstruct what would have been negotiated if the infringement hadn't happened.

This seems reasonable as the US Navy likely hadn't bough licenses for $155 mil, but had negotiated or accepted other use patterns than en-masse installation.

Importantly, this should also be seen as precedence for private piracy and that people with thousands of movies on their harddrives naturally aren't liable for the sum of their retail price.

>Importantly, this should also be seen as precedence for private piracy and that people with thousands of movies on their harddrives naturally aren't liable for the sum of their retail price.

I don't think that holds. They installed all this software automatically, when you download movies you have to manually action each one. I mean, unless people are downloading movie packs from torrent sites these days or whatever?

In the past I have routinely automated PtP downloads...
Automation is merely a tool. There's little difference between running a script and clicking "download" blindly a thousand times.
The problem I have with this type of verdict is that it's based on a hypothetical version of what could have happened had the Navy not actually violated the license agreement.

It reeks of deference to a favored party, in this case the Navy. It's doubtful a commercial entity would have received this same deference.

That's the part that got me. It's like stealing 1000 iPhones with a retail price of $999 each and then arguing in court that had I legally purchased 1000 iPhones I would have gotten a volume discount from a wholesale distributor and should only be responsible for the wholesale value of what I stole versus the retail value.
Or Joe Random Pirate who always get an exemplary, harsh penalty.
I don't know how common that method of figuring damages is in copyright infringement cases, but it is often done in patent infringement cases regardless of whether the defendant is the government or a commercial entity.
"It's better to be a pirate than join the navy."

- S.J.

Why choose when you can do both?!
I once saw a true-up scan on banking software come up with a million dollar bill. Turns out the software ended up on the new starter form and most mangers checked the box in case it was needed but nobody realised it was 5k a seat. I would also be suspicious that the reason for the scan was due to the vendor getting wind that they were being replaced. With the contract being iron clan and no leverage the bill was paid.
Unclear why the company didn’t just try to get the US Navy to sign a contract after they found out? “you have hundreds of copies of our product already installed” seems like a good starting point for a negotiation?
> US Navy began testing Bitmanagement’s 3D virtual reality application ‘BS Contact Geo’. The Navy subsequently installed the software across its network, assuming that it had permission to do so.

This turned out to be a crucial misunderstanding. Bitmanagement said it never authorized this type of use and when it discovered that the Navy had installed the software on hundreds of thousands of computers, the company took legal action.

This part of the article made me think it was an error on Navy part during the testing phase. The posted article does link to a 2016 article alleging that the Navy disabled tracking of the software deployment as well.

>Navy allegedly disabled the software that is supposed to track on how many computers the software is being used. This violation of the terms of service prevents the software vendor from stopping the unauthorized copying.

https://torrentfreak.com/u-s-government-sued-for-software-pi...

$154,400 is nearly zero in this context, no?
The first paragraph...

"The United States Navy must pay $154,400 in copyright infringement damages to German software company Bitmanagement. The U.S. Court of Federal Claims awarded the compensation after the Navy was shown to have copied and used software without permission. Whether Bitmanagement will celebrate this win is up for question as the damages are less than 0.1% of the $155 million it asked for."

Yeah but through the lens of what they asked for I'd expect the %age to be low. What's asked for tends to be utterly disconnected from reality.

This figure seems exceptionally small even in absolute terms.

Not even clear it covers legal costs.
Gee whiz, after all these years of ensigns, lieutenants, and lt. commanders contributing to early Linux high speed, low-latency ATM drivers toward the Linux kernel, ya think there can be an offset or something?
If this were Microsoft I wonder how it would have played out. Or VMware.
Jammie Thomas should have been so lucky.
Won't cover legal expenses.
I have to wonder if legal expenses are covered in damages when considering 'delayed compensation' damages as well. This doesn't feel like it was worth it at all otherwise, given the risk they took on (originally losing, too)
That seems like a reasonable verdict. I wonder if the software company tried to argue that there would be additional costs associated if the deal really took place. Support, upgrades, etc.
“Sounds like they saved your company the cost of those services; we'll reduce the damages accordingly.”
Yep, I can imagine that.

That got me wondering, if the software company was from US and not Germany, how different would be the amount.

$150,000 - why bother going to court?

Not to say it's an insignificant sum, but after court fees, representation, and the risk of failure, it doesn't amount to an award of note.

From the article: "Whether Bitmanagement will celebrate this win is up for question as the damages are less than 0.1% of the $155 million it asked for. "
Thank you