US Navy Accused of Stealing Software Licenses, Ship Plans From Vendors

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A pair of legal battles has entangled the United States Navy with allegations of intellectual property theft.

The US Navy is facing significant legal scrutiny after it allegedly installed software on hundreds of thousands of computer though its vendor for the software, Germany-based Bitmanagement, says the service was only allowed to download 100 copies according to their agreement.

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Bitmanagement stands to lose hundreds of millions of dollars, according to the July 2016 lawsuit. The company has now requested that federal court in the United States provide a summary judgement on the matter in the protracted legal dispute, Torrent Freak reported March 16.

The company argued that "to establish that it had an implied license, the government must show that Bitmanagement — despite having licensed a less-advanced copy of its software to the Government in 2008 on a PC basis that allowed for installation on a total of 100 computers in exchange for $30,000 — later authorized the government to make an unlimited number of installations of its advanced software product for $5,490."

According to Motherboard, the US Navy is appealing a second lawsuit related to a design for a littoral combat ship that it was found to have stolen. "The Navy completely respects the contractor ownership of all IP [intellectual property] developed solely at contractor expense and the contractor ownership, with a license to the government, of all IP developed by contractors using government funding," said Danny Hernandez, public affairs officer for the US Navy.

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FastShip was awarded $6.5 million last April after Lockheed Martin ditched using them as a subcontractor but presented the Navy with the firm's patented hull designs anyway. The judge ruled that the US Navy infringed on "every element" of FastShip's claim by using their patented hull designs without paying for the license, Law360 reported.

"There appears to be no hard and fast rules it has to follow in matters of IP," David Giles, founder of FastShip, told Motherboard Monday. The legal dispute started 10 years ago and did not get an initial response from the federal government until two years later. Before the award to FastShip was announced in 2017, the Philadelphia-based company filed for bankruptcy in 2012.

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