Note: Complex System Inc. (System provider) sued ABN Ambro Bank N.V. (Bank) for infringement of its copyright of BankTrade, a component-based solution designed to provide end-to-end automation of the full range of trade finance processing, and to streamline trade processing and other trade finance activities. Bank had previously used the BankTrade software through a subsidiary company which was licensed to use the software, but when the licensed subsidiary was sold Bank continued to use the BankTrade software without a license from the System Provider. Previously the U.S. District Court for the Southern District of New York granted summary judgment on the issue of liability in favor of System Provider.

Bank in a motion in limine sought to preclude System Provider from presenting evidence of System Provider's claim for indirect profits, which would be profits that stem from Bank's use of BankTrade. The United States District Court for the Southern District of New York, Forrest, J., granted Bank's motion in limine.

Bank argued that System Provider could not recover indirect profits because it failed to establish "a legally sufficient causal link between [Bank's] use of BankTrade and [Bank's] profits from its trade finance business." CSI argued that it had not sought profits beyond those that can be clearly traced back to ABN's use of BankTrade.

System Provider submitted six reports in an attempt to explain the causal nexus between BankTrade and certain revenue streams from which System Provider seeks disgorgement of Bank profits. BankTrade was one of four trade processing systems used by Bank to process letters of credit and guarantees. System Provider bore the burden of showing a causal connection between Bank's use of BankTrade and the profits sought.

System Provider failed to identify the ways in which Bank's profits are attributable specifically to BankTrade. System Provider's own witness, suggested during his deposition that there are at least five or six core trade processing software companies that operate in the market; he stated that they all provide "a certain basic set of functionality". He also stated explicitly that he did not know whether the revenues would have been any different had a processing system other than BankTrade been used by Bank. This witness also said he was not aware of BankTrade having any impact on the number of letters of credit issued by the bank. System Provider was not able to prove that all transactions which went through BankTrade and were able to be differentiated from the ones which were not run through BankTrade.

The United States District Court for the Southern District of New York concluded that System Provider had failed to make a sufficient evidentiary showing of a causal connection between BankTrade and Bank profits.



The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.