USDC N.D. Illinois, January 14, 2008
The plaintiff claimed to own the copyright in debt-collection software that it licensed to the defendants. The plaintiff terminated the license and, after discovering that the defendants were still using the software, filed suit for copyright infringement.
The plaintiff moved for partial summary judgment against two of the defendants, but the defendants argued that the plaintiff could not prove it owned the copyright in the software. Plaintiff FM Industries claimed that it acquired the copyright by written transfer from a sister company called FM Ware Industries, but FM Industries could not provide a copy of the transfer agreement.
The court denied the plaintiff’s motion for summary judgment because the plaintiff’s ownership of the copyright is a genuine issue of material fact precluding summary judgment. The court also rejected the plaintiff's argument that the defendants were estopped from contesting the plaintiff’s ownership of the copyright because the defendants had entered into a licensing agreement with the plaintiff in which the defendants acknowledged the plaintiff's ownership of the copyright. The court said that while "a provision in a licensing agreement explicitly forbidding the licensee from challenging the validity of the licensor’s copyright is generally enforceable," it held that absent the explicit language of a "no-contest clause" the doctrine of licensee estoppel should not be extended to a case in which there was merely an acknowledgement of licensor's ownership of the copyright by the licensee.