Article

Prior History: Complex Sys. v. ABN Amro Bank N.V., No. 08 Civ. 7497 (KBF), 2014 WL5970065 (S.D.N.Y. November 8, 2014) [USA], noted in 2014 Annual Review OF INTERNATIONAL BANKING LAW & PRACTICE at 428.

Note: ABN Information Technology Services Company, Inc. ("Licensee"), a subsidiary of ABN Amro Bank N.V. ("ABN"), maintained a license agreement with Complex Systems, Inc. ("Licensor") that allowed Licensee and its corporate affiliates to use BankTrade, a software application. Furthermore, additional provisions were added to the license, allowing it to be used worldwide and unlimited insourcing. Notably, the agreement was nontransferable, but could be assigned to Licensee's subsidiaries, affiliates, or parent company. ABN sold Licensee without any such assignment and continued to use Licensor's software. Licensor subsequently filed suit, requesting a permanent injunction.

The U.S. Copyright Act allows for a permanent injunction to be granted "on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.'" 17 U.S.C. § 502(a). Furthermore, the court noted that the party requesting the injunction must show: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." The U.S. District Court for the Southern District of New York, Forrest, J., granted the permanent injunction.

ABN asserted that Licensor failed to present evidence of irreparable harm and that, as a licensing business, it could not be harmed if ABN maintained a compulsory license. As evidence, ABN showed that Licensor offered to license the software to it for USD 310,000,000, and thus was compensable, not irreparable. In rejecting these contentions, the court held that ABN "misapplies the facts to the case law" and that Licensor had put forth credible evidence that "[Licensor] and ABN are competing in the same marketplace for the same set of clients." Furthermore, the Judge found that Licensor had suffered reputational harm, as businesses had complained to it about the outdated software used by ABN, and noted that Licensor's damages are "difficult-nearly impossible-to quantify".

The Judge additionally found that the balance of hardships between the parties warranted the equitable remedy, as granting an injunction "simply prevents ABN from doing that which it has no right to do" while granting ABN a compulsory license would reduce Licensor's leverage in other transactions and result in a lack of innovation. Finally, the Judge ruled that it is in the public's interest to grant the injunction, as the court would otherwise be "interfering with important negotiation rights, altering the parties' bargaining leverage, inserting itself as an arbitrator of a licensing fee and what are plainly complex business terms in an industry about which it knows nothing."

[ABS/mjb]

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