Case: 20-1139 Document: 51 Page: 1 Filed: 02/25/2021
`
`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`BITMANAGEMENT SOFTWARE GMBH,
`Plaintiff-Appellant
`
`v.
`
`UNITED STATES,
`Defendant-Appellee
`______________________
`
`2020-1139
`______________________
`
`Appeal from the United States Court of Federal Claims
`in No. 1:16-cv-00840-EJD, Senior Judge Edward J.
`Damich.
`
`______________________
`
`Decided: February 25, 2021
`______________________
`
`ADAM RAVIV, Wilmer Cutler Pickering Hale and Dorr
`LLP, Washington, DC, argued for plaintiff-appellant. Also
`represented by BRENT GURNEY; MARK CHRISTOPHER
`FLEMING, Boston, MA.
`
` SCOTT DAVID BOLDEN, Commercial Litigation Branch,
`Civil Division, United States Department of Justice, Wash-
`ington, DC, argued for defendant-appellee. Also repre-
`sented by JEFFREY B. CLARK, GARY LEE HAUSKEN, PATRICK
`C. HOLVEY; RICHARD JAMES HUBER, Office of General Coun-
`sel, United States Department of the Navy, Washington
`
`

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`Case: 20-1139 Document: 51 Page: 2 Filed: 02/25/2021
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`BITMANAGEMENT SOFTWARE GMBH v. UNITED STATES
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`Navy Yard, DC; ANDREW PAUL ZAGER, United States Navy,
`Alexandria, VA.
` ______________________
`
`Before NEWMAN, DYK, and O’MALLEY, Circuit Judges.
`
`Opinion for the court filed by Circuit Judge O’MALLEY.
`
`Concurring opinion filed by Circuit Judge NEWMAN.
`
`
`O’MALLEY, Circuit Judge.
`
`
`In 2013, the United States Navy (“Navy”), through the
`Naval Facilities Engineering Command (“NAVFAC”), cop-
`ied BS Contact Geo version 8.001, copyrighted graphics-
`rendering software created by German company Bitman-
`agement Software GmbH (“Bitmanagement”), onto all com-
`puters in the Navy Marine Corps Intranet. No express
`contract or license agreement authorized the Navy’s ac-
`tions. In 2016, Bitmanagement filed a complaint against
`the government in the United States Court of Federal
`Claims (“Claims Court”), alleging copyright infringement
`pursuant to 28 U.S.C. § 1498(b). After trial, the Claims
`Court found that, while Bitmanagement had established a
`prima facie case of copyright infringement, the Navy was
`not liable because an implied license permitted it to make
`the copies. See Bitmanagement Software GmbH v. United
`States, 144 Fed. Cl. 646 (2019). Bitmanagement appeals
`from that decision.
`We do not disturb the Claims Court’s findings. The
`Claims Court ended its analysis of this case prematurely,
`however, by failing to consider whether the Navy complied
`with the terms of the implied license. The implied license
`was conditioned on the Navy using a license-tracking soft-
`ware, Flexera, to “FlexWrap” the program and monitor the
`number of simultaneous users. It is undisputed that the
`Navy failed to effectively FlexWrap the copies it made and,
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`Case: 20-1139 Document: 51 Page: 3 Filed: 02/25/2021
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`BITMANAGEMENT SOFTWARE GMBH v. UNITED STATES
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`thus, that Flexera tracking did not occur as contemplated
`by the implied license. The Navy’s failure to comply creates
`liability for infringement. We therefore vacate the Claims
`Court’s decision and remand for a calculation of damages.
`I. BACKGROUND
`A. The Parties and the Software
`Bitmanagement develops software for rendering three-
`dimensional graphics. Peter Schickel, CEO, and Alex
`Koerfer, Financial Officer, co-founded the company in
`2002. One of Bitmanagement’s products is BS Contact
`Geo, a three-dimensional visualization program, which Bit-
`management first released in 2006. BS Contact Geo ena-
`bles the visualization of geographic information in third-
`party hardware and software products. It renders realistic
`terrain and city models and allows a user to position virtual
`objects using geographic coordinates.
`Bitmanagement primarily licenses its software via
`“PC” or “seat” licenses, which allow one installation of the
`software onto one computer per license. Each copy of the
`BS Contact Geo software includes both a desktop executa-
`ble file (“EXE version”) and a web browser plugin file
`(“OCX version”). The EXE component launches the soft-
`ware as a standalone application whereas the OCX compo-
`nent launches the software within a web browser.
`In 2005, Bitmanagement began working with David
`Colleen, CEO of software reseller Planet 9 Studios, Inc.
`(“Planet 9”), to market and sell Bitmanagement’s products
`in the United States. Bitmanagement and Planet 9 exe-
`cuted a Finder’s Fee Agreement, which provided “for sup-
`port of the sales activities of [Bitmanagement] and for the
`sole compensation of [Planet 9] in respect of [its] activities
`regarding support of [Bitmanagement] sales activities” and
`clarified Planet 9 was “neither entitled to represent [Bit-
`management] in any legal or other transaction nor to make
`any binding or nonbinding statement o[n] behalf of
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`BITMANAGEMENT SOFTWARE GMBH v. UNITED STATES
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`[Bitmanagement].” J.A. 10057–58 ¶ 36. Planet 9 was typ-
`ically compensated for reselling Bitmanagement’s software
`with a commission pursuant to a reseller agreement at-
`tendant to each sale.
`The Navy began development of SPIDERS 3D, “a
`web-based platform that provides a virtual reality environ-
`ment for NAVFAC engineers and technicians to view and
`optimize configurations of Navy installations, bases, and
`facilities,” in 2006. Bitmanagement, 144 Fed. Cl. at 649.
`SPIDERS 3D is located on NAVFAC’s internal enterprise
`portal and is thus only accessible to individuals with a De-
`partment of Defense Common Access Card or NAVFAC-
`sponsored access permissions. SPIDERS 3D requires a
`three-dimensional visualization software to provide visual-
`ization of Naval facilities. To fulfill this need, Alex Viana,
`a NAVFAC deputy program manager, approached Colleen
`from Planet 9, who recommended Bitmanagement’s
`BS Contact Geo.
`Thereafter, the Navy purchased copies of the Bitman-
`agement BS Contact Geo system, through intermediary
`Planet 9, on three occasions: one copy purchased in 2006
`for $990, 100 copies purchased in 2008 for $30,000, and
`18 copies purchased in 2012 for $5,490. Each transaction
`was embodied in a written contract that included the cor-
`responding number of PC seat licenses, as we next discuss.
`B. 2006 Purchase
`In September 2006, the Navy purchased, for testing
`purposes, one PC license of BS Contact Geo version 7.000
`from Planet 9 for $990. To accomplish the transaction, Bit-
`management and Planet 9 executed a software license
`agreement wherein Bitmanagement conferred “1 PC li-
`cense” to Planet 9 as the licensee and permitted Planet 9
`“to resale [sic] and/or to provide these licenses of BS Con-
`tact Geo to [NAVFAC].” J.A. 5097. The agreement speci-
`fied that the license “shall be enabled by the Licensor for
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`PC with computername ‘……………………….’ (to be mutu-
`ally agreed upon).” Id.
`Thereafter, Viana advised Planet 9 of an issue with Bit-
`management’s default licensing scheme. In November
`2006, Colleen relayed the message to Bitmanagement, ex-
`plaining that Bitmanagement’s default licensing scheme
`was incompatible with the Navy’s secure intranet because
`the Navy could not approve BS Contact Geo if, as was Bit-
`management’s normal practice, the end user would be re-
`quired to contact Bitmanagement for a license key in order
`to use the program on a particular computer. Schickel re-
`sponded on behalf of Bitmanagement that Bitmanagement
`was “open for any licensing scheme that suits the US Navy
`better” and was “willing to do [its] utmost to enable [an-
`other] licensing functionality, if requested.” J.A. 6986. In
`an email to Schickel and Colleen, Viana responded that the
`Navy needed a copy of BS Contact Geo that included the
`license key and that was not PC-specific because the Navy
`did not know “what machine(s) the application will be
`tested on.” J.A. 6985. Viana also noted that the Navy an-
`ticipated needing “an initial 15 licenses, with a potential
`for as many as 100 or more licenses later on.” Id. In re-
`sponse, Bitmanagement, through intermediary Planet 9,
`provided BS Contact Geo to the Navy with two licensing
`keys that were not PC specific.
`In May 2007, at the Navy’s request, Bitmanagement
`provided the Navy with a “silent installer for BS Contact
`Geo intended for bulk installations,” which, Schickel ex-
`plained, was “helpful for an administrator to do installa-
`tions on a large scale even on remote computers connected
`via intranet or internet.” J.A. 5736.
`C. 2008 Purchase
`In February 2008, the Navy submitted to Planet 9 a
`$30,000 purchase order (“the 2008 Navy Purchase Order”)
`for 100 seat licenses of BS Contact Geo. Attendant to that
`purchase, Bitmanagement and Planet 9 executed a second
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`licensing agreement (“the 2008 Reseller Agreement”)
`wherein Bitmanagement authorized Planet 9 to resell
`“100 PC licenses” to the Navy. J.A. 7001.
`Though the 2008 Navy Purchase Order specified ver-
`sion 7.038 of BS Contact VRML and X3D,1 in May 2009,
`Bitmanagement delivered a newer version, BS Contact Geo
`version 7.204. A year later, in 2010, the Navy had twenty
`remaining licenses from the 2008 Purchase Order that it
`had not yet deployed to Navy computers. In September
`2010, Bitmanagement agreed to upgrade the undeployed
`licenses to version 7.215 of BS Contact Geo for an addi-
`tional $125 per license.
`D. 2012 Negotiations, Purchase, and Deployment
`The Navy, Planet 9, and Bitmanagement began dis-
`cussing another license purchase in April 2011. Planet 9
`relayed to Bitmanagement that the Navy was experiencing
`issues managing their individual seat licenses and had
`asked to “revisit the discussion of a floating license
`scheme.” J.A. 5769. On April 21, 2011, Bitmanagement
`responded and proposed three “license tracking” options:
`Option 1: No limitation in the software at all. Li-
`censes can be tracked by a word document or table
`stating the computer and/or person using it. Dis-
`tribution to the Navy only.
`Option 2: BS Contact client tracking: BS Contact
`checks at startup how many other BS Contact cli-
`ents are running in the same sub-domain. If too
`many BS Contact client will notify the user.
`Option 3: Server tracking: A 24/7 server in the do-
`main/sub-domain maintains a counter. If the
`
`
`1 BS Contact VRML and X3D was a predecessor to
`BS Contact Geo version 8.001. J.A. 10059 ¶ 47.
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`number of BS Contact clients is reached the BS
`Contact client requesting will notify the user.
`J.A. 5767–68.
`Viana followed up with Colleen in June 2011, indicat-
`ing an interest in Option 3. Viana explained that NAVFAC
`had an existing floating license server tracking application,
`Flexera, that could be used to track BS Contact Geo with
`no alterations to the program. Flexera is a server-based
`program used to limit the number of simultaneous users of
`a “Flexera enabled”—or “FlexWrapped”—software based
`on the number of available licenses. When a user opens a
`FlexWrapped program, the program alerts the Flexera
`tracking server that the program is in use.
` The
`FlexWrapped program sends a similar alert when the pro-
`gram is no longer in use. The Flexera license manager thus
`limits the number of users of FlexWrapped software to the
`number of licenses that a user owns.
`On June 8, 2011, Colleen relayed the Navy’s preference
`for Option 3 to Bitmanagement. Colleen noted that he had
`“an order from [the Navy] for 20 seats of BS Contact” and
`proposed, “try[ing] these 20 seats on the floating license
`server to see how they work.” J.A. 5766. Schickel re-
`sponded on June 10, 2011, “[l]et’s go for the floating license
`server approach.” J.A. 5765.
`On November 4, 2011, Viana informed Schickel that
`the Navy wanted to deploy the 20 undeployed licenses from
`the 2008 Purchase Order but wanted “to centrally manage
`the utilization of the 20 licenses . . . within the Navy’s
`[Navy Marine Corps Intranet (“NMCI”)] network” in order
`to “better understand user demand . . . and manage the
`growth of future licenses.” J.A. 7046. Viana advised
`Schickel that the Navy was preparing an agreement be-
`tween NAVFAC and Bitmanagement
`“formalizing
`[NAVFAC’s] approach to manage and deploy the licenses
`from the server rather than individual seats.” J.A. 7046–
`47. Viana indicated that, with this approach, he was
`
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`BITMANAGEMENT SOFTWARE GMBH v. UNITED STATES
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`“extremely confident” that purchases of upgrades and ad-
`ditional licenses would be justified. J.A. 7047. Schickel
`responded, “thank you very much for your e-mail . . . and
`great news. We are looking forward to receiv[ing] your
`draft agreement.” J.A. 7046.
`In a November 9, 2011 email, Viana explained to
`Schickel the Navy’s plans with respect to deploying BS
`Contact Geo:
`My strategy is to get the current licenses of BS Con-
`tact Geo version 7.215 deployed with the server li-
`cense management software. Then we will push it
`out to several of the NMCI realms to begin tracking
`the usage and demand signal of the 20 license keys.
`. . . [T]hen we (Navy) will issue a purchase order
`through one of our contracting mechanisms to pro-
`cure X number of licenses of the new version.
`J.A. 7046. Viana emailed Koerfer on November 24, 2011,
`offering a similar explanation:
`Wanted to make sure we have the same under-
`standing of our planned approach for BS Contact
`Geo with regards to the user’s agreement. We cur-
`rently have 20 PC licenses of BS Contact Geo ver-
`sion 7.215 which we have not deployed and are
`requesting to manage from our Navy server. This
`will be accomplished by utilizing the software ap-
`plication AdminStudio by Flexera in conjunction
`with BS Contact Geo from our server. This will al-
`low us to track the use of the 20 licenses across a
`broad spectrum of the NMCI realm (versus having
`those 20 licenses mapped to individual PCs). Once
`we have successfully implemented this approach,
`we will be able to document (through the Ad-
`minStudio) the usage of the 20 BS Contact Geo li-
`censes and enable us to justify the purchase of
`additional BS Contact Geo licenses in the future.
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`J.A. 5832 (emphasis added). Koerfer responded on behalf
`of Bitmanagement “[t]hat is our understanding as well”
`and that “[t]he user agreement in princip[le] covers your
`approach from our point of view.” J.A. 5831. The Navy and
`Bitmanagement thereafter exchanged draft vendor pro-
`posals, but none was executed.
` On January 16, 2012, Planet 9 confirmed the agreed
`upon licensing scheme with Bitmanagement, stating that
`the 20 undeployed existing licenses, as well as 30 new li-
`censes, of BS Contact Geo would be available under “the
`Navy’s floating license system.” J.A. 5856. Koerfer replied
`“ok.” Id.
` On January 20, 2012, after reducing the number of new
`licenses to account for Planet 9’s reseller margin, Planet 9
`sent Viana a license proposal including the 20 undeployed
`licenses from the 2008 Navy Purchase Order and 18 new
`copies of BS Contact Geo 7.215. On May 21, 2012, the Navy
`submitted a purchase order to Planet 9 (“the 2012 Navy
`Purchase Order”) for 18 BS Contact Geo Version 7.215 Li-
`censes “enabled by NAVFAC using Flexera Software’s
`FlexWrap utility” for a total cost of $5,490. J.A. 7083. The
`2012 Navy Purchase order also included a contract line
`item for 75 hours of technical support. J.A. 7084.
`On June 13, 2012, after execution of the 2012 Navy
`Purchase Order, Bitmanagement delivered to NAVFAC a
`“no cost” modification in the form of BS Contact Geo ver-
`sion 8.001, rather than version 7.215, “under the same
`terms of the recently awarded BS Contact Geo license pro-
`curement contract with NAVFAC.” J.A. 7181. Bitmanage-
`ment delivered version 8.001 with “a silent installer
`capability as requested for bulk installation.” Id.
`
`Following delivery of BS Contact Geo version 8.001,
`Bitmanagement sent Planet 9 a written reseller agreement
`(“2012 Reseller Agreement”). The agreement authorized
`Planet 9 to resell 18 PC-licenses of BS Contact Geo version
`7.215 or version 8.001 to NAVFAC. Planet 9 objected to
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`the initial document’s discussion of Planet 9 as an “end
`user” rather than a “reseller.” In September 2012, Bitman-
`agement sent a substantively identical agreement revising
`the language. The 2012 Reseller Agreement was never
`signed. It is undisputed, however, that Planet 9 and Bit-
`management reached an agreement.
`On July 3, 2012, the Navy contacted Bitmanagement
`about the Navy’s inability to use more than one license at
`a time and an incompatibility between the installation file
`and the Flexera software. Bitmanagement delivered a new
`installation file on July 23, 2012, so that the software could
`be FlexWrapped. It billed its time to modify the file pursu-
`ant to the 2012 Navy Purchase Order.
`Over the next year, the Navy regularly updated Bit-
`management on its progress toward broad deployment on
`BS Contact Geo. See, e.g., J.A 5914 (Viana to Schickel and
`Colleen: “Wanted [to] provide you an update of our efforts
`to deploy BS Contact Geo within NMCI.”); J.A. 5917 (Viana
`to Schickel and Koerfer: “[W]e are working necessary pro-
`cesses to enable the deployment of BS Contact Geo across
`all Navy computers.”); J.A. 5983 (Viana to Schickel and
`Koerfer: “Once certified [the Navy] will push the applica-
`tion to all 350,000+ NMCI computers and we will begin
`monitoring and reporting the usage through the Flex Li-
`cense Manager.”). Bitmanagement’s responses to these
`messages were generally positive and encouraging. J.A.
`5917 (Schickel to Viana: “[T]hank you for your encouraging
`e-mail.”); J.A. 5966 (Schickel to Viana: “[T]hanks for the
`good news!”).
`The Navy began widespread deployment of BS Contact
`Geo version 8.001 to the NMCI network in July 2013. The
`program remained on NMCI computers through at least
`September 2016. During that time, Flexera “did not mon-
`itor or control the use of the BS Contact Geo plugin,” i.e.,
`the OCX component of the software was not FlexWrapped.
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`J.A. 10067–68 ¶ 95. The Navy did not purchase any addi-
`tional copies of BS Contact Geo.
`E. Claims Court Proceedings
`On July 6, 2016, Bitmanagement filed an application
`to register BS Contact Geo version 8.001 with the United
`States Copyright Office. On July 15, 2016, Bitmanagement
`filed suit against the government in the Claims Court al-
`leging that the Navy infringed its copyright.
`The Claims Court held a six-day bench trial from April
`22–29, 2019. Following post-trial briefing, in a September
`9, 2019, opinion, the court held that the government was
`not liable for copyright infringement. Specifically, the
`Claims Court found: (1) Bitmanagement made a prima fa-
`cie case of copyright infringement; and (2) no express
`agreement granted the Navy a license to install BS Contact
`Geo on all of the Navy’s computers; but (3) the Navy had
`met its burden to show that Bitmanagement authorized
`the Navy to copy BS Contact Geo version 8.001 across the
`Navy’s NMCI network of computers. Bitmanagement,
`144 Fed. Cl. at 655–56.
`
`The Claims Court’s conclusions as to the first two is-
`sues are not challenged on appeal. As to the third issue,
`the court found, based on the above recited facts, “it is clear
`that Bitmanagement authorized the Navy to deploy—i.e.,
`copy—BS Contact Geo version 8.001 across the Navy’s
`NMCI network.” Id. at 656. The Claims Court explained
`that Bitmanagement always understood the Navy’s desire
`for a product suitable for broad deployment and consist-
`ently assisted the Navy in achieving that goal by, for exam-
`ple, providing a license file that was not PC-specific,
`providing a silent installer, and modifying the installation
`file for Flexera compatibility. Id. The Claims Court also
`considered the exchanges between the Navy and Bitman-
`agement relating to a “floating license server approach”
`and, thereafter, the various updates from the Navy on its
`progress toward broad deployment. Id. at 656–57. The
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`Claims Court concluded, “[t]ogether, these interactions un-
`equivocally show that Bitmanagement was not only aware
`that the Navy planned to install BS Contact Geo ‘across a
`broad spectrum of the NMCI realm’ but also that Bitman-
`agement authorized such installations.” Id. at 657.
`The court further found that Bitmanagement agreed to
`this scheme “because Flexera would limit the number of
`simultaneous users of BS Contact Geo, regardless of how
`many copies were installed on Navy computers.” Id. at 648.
`It reasoned that Flexera would render the actual number
`of copies irrelevant and provide the Navy with a necessary
`tool for determining how many additional licenses to pur-
`chase. Id.
`The Claims Court entered judgment in favor of the gov-
`ernment on September 9, 2019. Bitmanagement timely
`filed a notice of appeal. We have jurisdiction to hear ap-
`peals from final decisions of the Claims Court pursuant to
`28 U.S.C. § 1295(a)(3).
`II. DISCUSSION
`On appeal from the Claims Court, we review legal con-
`clusions de novo and factual findings for clear error. Gay-
`lord v. United States, 678 F.3d 1339, 1342 (Fed. Cir. 2012).
`“A finding is ‘clearly erroneous’ when although there is ev-
`idence to support it, the reviewing court on the entire evi-
`dence is left with the definite and firm conviction that a
`mistake has been committed.” United States v. U.S. Gyp-
`sum Co., 333 U.S. 364, 395 (1948). “Where the district
`court’s account of the evidence is plausible in light of the
`record viewed in its entirety, the court of appeals may not
`reverse it even though convinced that had it been sitting as
`the trier of fact, it would have weighed the evidence differ-
`ently.” June Med. Servs. LLC v. Russo, 140 S. Ct.
`2103, 2121 (2020) (internal quotation marks omitted).
`Thus, “[a] finding that is ‘plausible’ in light of the full rec-
`ord—even if another is equally or more so—must govern.”
`Cooper v. Harris, 137 S. Ct. 1455, 1465 (2017).
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`Bitmanagement raises three challenges to the Claims
`Court’s decision. It argues: (1) the Claims Court’s finding
`of an implied-in-fact license2 is not legally supported or fac-
`tually plausible; (2) an implied-in-fact license between Bit-
`management and the Navy is precluded as a matter of law;
`and (3) regardless of any implied-in-fact license, the
`Claims Court erred by failing to address whether the Navy
`complied with the Flexera condition of the license. We ad-
`dress each argument in turn.
`A. The Claims Court’s Finding of an Implied-in-Fact
`License Is Legally Supported and Factually Plausible
`Copyright licenses are a type of contract and, therefore,
`governed by common law contracting principles. See Dep’t
`of Parks & Recreation v. Bazaar Del Mundo Inc., 448 F.3d
`1118, 1130 (9th Cir. 2006) (“Licenses are contracts ‘gov-
`erned by ordinary principles of . . . contract law.’” (quoting
`Power Lift, Inc. v. Weatherford Nipple-Up Sys., Inc.,
`871 F.2d 1082, 1085 (Fed. Cir. 1989))). Thus, as with im-
`plied-in-fact contracts, an implied-in-fact license “is one
`founded upon a meeting of the minds, which, although not
`embodied in an express contract, is inferred, as a fact, from
`conduct of the parties showing, in the light of the surround-
`ing circumstances, their tacit understanding.” City of Cin-
`cinnati v. United States, 153 F.3d 1375, 1377 (Fed. Cir.
`1998) (internal quotation marks omitted). Finding such a
`license ordinarily requires finding: “1) mutuality of intent
`to contract; 2) consideration; and, 3) lack of ambiguity in
`offer and acceptance.” City of El Centro v. United States,
`922 F.2d 816, 820
`(Fed. Cir. 1990).
` An
`implied
`
`2 The Claims Court expressly found that the Navy’s
`mass download of BS Contact Geo was “authorized.” The
`parties treat the court’s finding as one of an implied-in-fact
`contract or license between Bitmanagement and the Navy.
`We agree with the parties’ characterization of the court’s
`decision.
`
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`nonexclusive copyright license may be found, however, in
`the absence of consideration. See, e.g., Avtec Sys., Inc. v.
`Peiffer, 21 F.3d 568, 574 n.12 (4th Cir. 1994) (“[A]n implied
`license is necessarily nonexclusive and revocable absent
`consideration.”); 3 Melville B. Nimmer & David Nimmer,
`Nimmer on Copyright § 10.03[A][8] (2020) (“[N]o consider-
`ation is necessary under federal law to effectuate a transfer
`of copyright ownership that does not purport to require
`consideration. Note, however, that consideration is neces-
`sary to render a nonexclusive license irrevocable.”).
`Bitmanagement argues that the Claims Court failed to
`address the prevailing legal test for finding an implied-in-
`fact license and, instead, improperly engaged in a general-
`ized assessment of the parties’ interactions. Appellant’s
`Br. 34–35. Specifically, Bitmanagement argues that the
`Claims Court was required to apply the Ninth Circuit’s “Ef-
`fects factors.” Bitmanagement reads the law too narrowly.
`Bitmanagement is correct that, in the copyright con-
`text, the Effects factors, derived from Effects Associates v.
`Cohen, 908 F.2d 555, 558–59 (9th Cir. 1990), are often used
`to determine whether an implied nonexclusive license may
`be found. The three factors courts consider are whether
`“(1) a person (the licensee) requests the creation of a work,
`(2) the creator (the licensor) makes that particular work
`and delivers it to the licensee who requested it, and (3) the
`licensor intends that the licensee copy and distribute his
`work.” Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284
`F.3d 505, 514 (4th Cir. 2002) (quoting I.A.E., Inc. v. Shaver,
`74 F.3d 768, 776 (7th Cir. 1996)). The Effects factors are
`not the exclusive inquiry used by the regional circuits, how-
`ever. See 3 Nimmer & Nimmer, supra, § 10.03[A][7] (“Alt-
`hough those three factors, when they exist, may lead to the
`conclusion that there is a valid implied license, . . . other
`tests . . . reveal how questionable it is for other courts to
`transmute those three factors into the only applicable
`test.”). Accordingly, as the Fifth Circuit has explained,
`“[w]hen the totality of the parties’ conduct indicates an
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`BITMANAGEMENT SOFTWARE GMBH v. UNITED STATES
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`15
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`intent to grant such permission, the result is a legal non-
`exclusive license.” Lulirama Ltd. v. Axcess Broad. Servs.,
`Inc., 128 F.3d 872, 879 (5th Cir. 1997) (quoting 3 Nimmer
`& Nimmer, supra, § 10.03[A][7]); see also Baisden v. I’m
`Ready Prods., Inc., 693 F.3d 491, 501 (5th Cir. 2012) (the
`existence of an implied license depends on the totality of
`the parties’ conduct). We have similarly, albeit in the pa-
`tent context, emphasized the relevance of parties’ entire
`course of conduct to the determination of whether an im-
`plied-in-fact license exists. See Wang Labs., Inc. v.
`Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1580 (Fed. Cir.
`1997) (holding that the “entire course of conduct” is rele-
`vant to finding an implied patent license).
`The Claims Court did not legally err by considering Bit-
`management and the Navy’s entire course of conduct to
`find an implied-in-fact license. The Effects factors, which
`were first articulated in the context of movie footage cre-
`ated for incorporation into a specific film, are simply too
`remote from the facts of this case to be useful. See Effects,
`908 F.2d at 558–59. In cases such as this one, where the
`copyrighted work at issue is a commercially available soft-
`ware product rather than one made for a specific end-user,
`it is appropriate to consider the totality of the parties’
`course of conduct to decide whether an implied-in-fact li-
`cense exists.
`Bitmanagement further argues, regardless of the ap-
`plicable test, that the record does not support finding a
`“meeting of the minds.” Appellant’s Br. 41–44. The gov-
`ernment responds that there is no “meeting of the minds”
`requirement for finding an implied-in-fact license. Appel-
`lee’s Br. 37. While we reject the government’s assertion
`that a meeting of the minds is irrelevant, we hold that the
`Claims Court did not clearly err in finding a meeting of the
`minds on the record before it.
`As noted, an implied-in-fact license may be found only
`“upon a meeting of the minds” that “is inferred, as a fact,
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`16
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`BITMANAGEMENT SOFTWARE GMBH v. UNITED STATES
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`from conduct of the parties showing, in the light of the sur-
`rounding circumstances, their tacit understanding.” City
`of Cincinnati, 153 F.3d at 1377 (quoting Balt. & O.R. Co. v.
`United States, 261 U.S. 592, 597 (1923)). The government’s
`contention that this requirement does not exist is, there-
`fore, incorrect.
`The record, however, supports the plausibility of the
`Claims Court’s finding of a meeting of the minds. As dis-
`cussed above, the Claims Court considered numerous email
`exchanges between Bitmanagement and the Navy. Based
`on those communications, the Claims Court found: (1) Bit-
`management understood from the beginning that the Navy
`desired to broadly deploy the software; (2) Bitmanagement
`agreed to a “floating license server approach” that would
`control the use of individual copies of the program installed
`on Navy computers; (3) the Navy informed Bitmanagement
`on several occasions of its plan to broadly deploy the pro-
`gram; and (4) Bitmanagement confirmed that it under-
`stood the plan. Bitmanagement, 144 Fed. Cl. at 656–57.
`Together, the court concluded, “these interactions unequiv-
`ocally show that Bitmanagement was not only aware that
`the Navy planned to install BS Contact Geo ‘across a broad
`spectrum of the NMCI realm’ but also that Bitmanagement
`authorized such installations.” Id. at 657.
`Though Bitmanagement would have us read the com-
`munications and testimony differently to reach a different
`conclusion, and though such a reading is certainly sup-
`ported by the record, that is not our place when reviewing
`factual findings for clear error. The Claims Court’s finding
`of a meeting of the minds is a plausible conclusion and thus
`is not clearly erroneous. We must, therefore, defer to the
`Claims Court’s finding.
`During oral argument, counsel for the government con-
`tended that Bitmanagement and the Navy made a “mutual
`mistake” as to the compatibility of Flexera with BS Contact
`Geo.
` See Oral Arg. at 16:46–17:13, available at
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`http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20-
`1139_11032020.mp3. This admission raises for us grave
`doubts as to the Claims Court’s ultimate finding of a meet-
`ing of the minds. We are dubious whether a meeting of the
`minds is possible when the parties involved so clearly did
`not understand the technology. Even weighing this in the
`balance, however, the Claims Court’s finding remains plau-
`sible. And, as discussed below, our affirmance of the
`Claims Court’s factual finding is not dispositive because
`the Navy breached a condition precedent of any implied-in-
`fact license and thus infringed Bitmanagement’s copyright.
`Because we must defer to the Claims Court’s finding of
`a meeting of the minds, we affirm the Claims Court’s find-
`ing of an implied-in-fact license between the Na