US Government to pay $50 million for using pirated software

Apptricity, maker of logistics software useful for tracking location of soldiers and shipments in critical missions, has sued the US Government for defaulting on software license fees and operating unlicensed copies of the software for nearly a decade.

According to the company, the Government had unlawfully installed the software on 93 servers and around 9000 devices in addition to 500 licenses that were paid for. The license fees for the software are $1.35 million per server and $5000 per device which translates into $224 million in lost revenue.

The software maker filed a lawsuit against the Government with the US Court of Federal Claims for copyright infringement and ignoring the company's claims. The amount initially demanded by the company was $224,543,420.80, but the Government has decided to settle the lawsuit by paying $50 million to Apptricity and has accepted that they were indeed operating multiple copies of the company's software without permission and licensing.

The US Government is yet to comment on the settlement but Apptricity expects that their business with the Government and the military would continue professionally even after this debacle.

In the past, Government officials have been caught pirating media from the internet, but this is the first time that the Government itself has been caught for using pirated software and on a big scale.

Source: TorrentFreak | Image via BGR

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31 Comments

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Am I the only one stunned by the, "The license fees for the software are $1.35 million per server and $5000 per device" sticker price!? Wow!!!

Scabrat said,
Am I the only one stunned by the, "The license fees for the software are $1.35 million per server and $5000 per device" sticker price!? Wow!!!

This isn't software you get from BestBuy. In all likelihood, this is their only customer. We have no idea how many people worked on that software and for how long. It might be that this is pretty cheap.

_dandy_ said,

This isn't software you get from BestBuy. In all likelihood, this is their only customer. We have no idea how many people worked on that software and for how long. It might be that this is pretty cheap.

They have a few huge corporations as their customers, it's on their website (Doesn't list the products they use though).

For all we know, it could be highly specialised software with strong SLAs in place or something to justify the cost. If the US Government and Apptricity's other clients didn't feel it was worth the money, or that some other organisation offered a similar product cheaper, then they wouldn't be buying it.

But you're right, some people need to stop looking at this through the prism of consumer grade, high volume software like Microsoft's or Adobe's products, because this is not that sort of software as far as I can tell.

_dandy_ said,

This isn't software you get from BestBuy. In all likelihood, this is their only customer. We have no idea how many people worked on that software and for how long. It might be that this is pretty cheap.

Oh no, I get that. Its just I have never heard of a number close to 1.35 million for a server license =). I am sure its the cream of the crop service out there and has been for years. And I am sure they customized it to fit their needs and etc, etc. Its just a large number =). The 5k per device doesnt seem to bad.

Scabrat said,
I am sure its the cream of the crop service out there and has been for years.

Not necessarily. :-) Maybe the software sucks, but they can't find anyone willing to come up with something better, for less money. Or maybe they feel they've already spent so much money on it that it doesn't make any sense to trash it and start over.

so the Government use Pirated software as well, Hummm so if the gov can do it and now go to Jail so i guess we all can do it as well.

Too bad the government doesn't produce the software for themselves. With that amount of money, they could have the software custom written and would own it so they wouldn't have to pay licensing fees. The taxpayers would also have the benefit of having such software fall into the public domain, instead of paying for software that they will never be able to use themselves.

Just because the government produced the software internally does not automatically mean it becomes public domain.

Governments and government departments do this all the time, and much like private corporations, they often want to keep it private for various reasons.

Besides, the way Americans rave on about free enterprise, this notion would appear to go strictly against that belief (Spending many tax payers dollars to produce something the market already provides).

Oh BTW, you can use it if you want (It is a private organisation selling it to the US government after all). The problem is you'd be forced to buy licenses as well. From a cursory glance at their website, you'd be able to purchase their software for your organisation, because believe it or not, many US companies do. Therefore, it's freely available to anyone who wants it and is prepared to, *shock* pay for it.

Also, if they catch you using illegal copy of windows ($200 full version price) you can do a settlement and pay $50? I don't think that's the way it works.
It should be 224 million for the lisencing PLUS the fine for using it without a lisence (which usually is 40 x Price = 9 billion) and then work for a settlement on the fine.

The US government is one of the worst governments in the world when it comes to harassing individual and world wide people for pirating stuffs.
And now they do the same, on a massive scale actually. And its all A-Okay?
wth man.

They got more than 50 million valuation out of the deal I'm sure... I can't see any business letting 174 million in licensing slide. Likely signed a 15 year agreement to use only their software at 300% retail.

so the Government use Pirated software as well lol .. i guess we not the only one .. i guess using illegal software is illegal according with the Gov.

It would seem the software company is able to tell how many copies of the software are running. I'm guessing the software "phones home" similar to the way Adobe or Microsoft software does. It's kind of scary to think about what other data this software is capable of sending back to the software company!

riot said,
It would seem the software company is able to tell how many copies of the software are running. I'm guessing the software "phones home" similar to the way Adobe or Microsoft software does. It's kind of scary to think about what other data this software is capable of sending back to the software company!

That may have been prepared through disclosure...

riot said,
It would seem the software company is able to tell how many copies of the software are running. I'm guessing the software "phones home" similar to the way Adobe or Microsoft software does. It's kind of scary to think about what other data this software is capable of sending back to the software company!

If it does it is not in a hurry to call..... " unlicensed copies of the software for nearly a decade."

M_Lyons10 said,
Wow, the company making the software really got shorted here...

Seems so, less than 25% of the original amount. Presumably, it was a mutual agreement where the gov paid a lower sum to settle in return for ongoing correct licensing fees that would make up some of the difference.

vanx said,

Seems so, less than 25% of the original amount. Presumably, it was a mutual agreement where the gov paid a lower sum to settle in return for ongoing correct licensing fees that would make up some of the difference.


Or... "don't make me NSA you bro!, here have this $50 million we don't actually have."

If this was a person, be it software, music or movies doing $224 million in piracy, they'd be in the slammer already with the key thrown away. The government? oops.

vanx said,

Seems so, less than 25% of the original amount. Presumably, it was a mutual agreement where the gov paid a lower sum to settle in return for ongoing correct licensing fees that would make up some of the difference.


Yeah, you're probably right. They probably were more amenable to negotiate as well in order to save the relationship.

I honestly don't know how competitive that market is either...

My bad, the taxpayers now have to pay an additional $50 million for them to continue spying on our own troops.

( I was typing too fast while having a discussion).

Edited by Rohdekill, Nov 28 2013, 9:50pm :

Rohdekill said,
So....basically the tax payers have to cough up an additional $50 million for them to continue spying on the taxpayers.

Classic.


How does this have anything to do with spying on the taxpayers?

Rohdekill said,
So....basically the tax payers have to cough up an additional $50 million for them to continue spying on the taxpayers.

Classic.


I think they saved $174 million pirating it.

Rohdekill said,
My bad, the taxpayers now have to pay an additional $50 million for them to continue spying on our own troops.

"tracking location of soldiers and shipments in critical missions"

Very different to spying.