Client: A mid-sized tech company specializing in software development

Dispute Type : Software Licensing Agreement Dispute

Service Provided by TSL: Software Licensing Dispute Resolution and Contract Enforcement

Scenario: A mid-sized tech company developed a unique customer relationship management (CRM) software and entered into a licensing agreement with a large multinational enterprise (MNE). The license allowed the MNE to use the CRM software across its global operations for a five-year term, with annual license fees and maintenance agreements included.
Two years into the agreement, the MNE unilaterally modified the software for internal purposes without obtaining explicit consent from the tech company. The modifications, as per the contract, constituted a breach of the licensing agreement. Additionally, the MNE stopped making the required annual payments, claiming dissatisfaction with the software’s functionality and citing the modifications as necessary to suit their business operations.
The tech company approached The SALT Legal (TSL) for assistance in enforcing the licensing agreement and recovering unpaid fees.

The SALT Legal excels in employee, employer, labor, cyber, IP, new business, and corporate legal support.

TSL's Approach: 1. Review of Licensing Agreement:

TSL’s legal team conducted a thorough review of the software licensing agreement to identify the terms relating to software modifications, payment obligations, and breach clauses. The contract had explicit language prohibiting unauthorized alterations to the software.

2. Negotiation and Mediation:

TSL initiated negotiations with the MNE, aiming for an out-of-court settlement. We emphasized the breach of the agreement due to unauthorized modifications and the non-payment of fees. Our team sought to reinstate the original terms of the contract or negotiate an amended agreement that would accommodate the MNE’s needs while protecting the tech company’s intellectual property.

3. Litigation Strategy:

When negotiations stalled, TSL prepared for litigation, gathering evidence of the unauthorized software modifications and unpaid fees. A claim was filed for breach of contract and intellectual property infringement.

4. Outcome:

Before going to court, the MNE agreed to enter formal mediation with TSL. The case was settled amicably through mediation, with the MNE agreeing to pay the outstanding fees and an additional sum for damages. Both parties renegotiated a new licensing agreement that allowed certain modifications under strict approval processes and secured a more favorable long-term contract for the tech company.

Key Takeaways:

• TSL successfully enforced the original licensing agreement and recovered unpaid fees.

• A renegotiated contract provided more protections and future opportunities for the tech company.

• By pursuing mediation, the relationship between the two companies was preserved, allowing for future collaboration.