December 16, 1998 6:05 PM PST
Judge blocks code-breaking software
The U.S. Federal Court for the District of Connecticut has slapped a temporary injunction on Imagine That, preventing the company from shipping copies of its RivalLock and IceLock software, while a trademark infringement suit brought by CNC Software proceeds. RivalLock and IceLock allow users to make multiple copies of software licenses that are not supposed to be duplicated.
A maker of computer-aided design (CAD) software, CNC develops and sells its Mastercam on the basis of "individual seat" licenses. It ensures the software cannot be illegally duplicated and distributed by shipping a system interface module (SIM) with each copy: Mastercam does not work without a unique SIM, which is plugged into a PC port.
Imagine That's programs, which are marketed to CNC's customers via its Web site and Usenet newsgroups, modify Mastercam's code to bypass the SIM. This allows licensees to copy and use Mastercam without the hardware lock.
Christopher F. Droney, U.S. District Judge for the District of Connecticut, found that CNC is likely to prevail on the merits of its copyright and trademark infringement claims and that the company could suffer irreparable harm if an injunction was not imposed, according to the ruling.
Imagine That must refrain from distributing its products, which "render useless the plaintiff's software locking mechanisms," and must refrain from using the CNC's trademark in its advertising or packaging while the case is pending, the court ruled.
Increasingly, software companies are looking to the courts to protect their trademark interests against widespread piracy and loosely enforced per-seat licensing agreements. CNC filed the suit in attempt to preserve its only revenue stream, its licensing agreements with its clients, it said in the suit.
Mastercam costs $12,900 per license, and customers may not copy or distribute extra copies under the terms of the licensing agreement. "Each customer who licenses a copy of the CNC Mastercam software receives a SIM that is coded to run only with that version and level of the software," according to the suit.
Imagine That displays a disclaimer on its site warning potential customers that its software is only designed for authorized licensees to "protect your considerable investment in your software by preventing downtime, loss of income, and hardware and/or software incompatibilities."
However, the ruling finds that the "Defendants' 'verification process' which they claim to use to ensure sale of their software only to licensed users of Mastercam, is not consistently employed, and is not effective."