Page:Dynamic Solutions v. Planning & Control.pdf/10

 (a) Ownership

First, defendants attack plaintiff’s ownership of the copyrights. Relying on paragraph 8 of the agreement, under which “DSI expressly disclaim[ed] any interest in … new [simulation] products … that may be developed at any time in the future,” defendants assert that the Alpha Micro software belongs to Censor. Reading paragraph 8 in context, however, I do not find it so broad. Indeed, the creation of the Alpha Micro programs appears to be a situation not contemplated by the agreement at all. The agreement describes the parties’ previous relationship, under which “DSI provides, for some Censor clients, consulting services to create the new software that produces the simulations.” (¶ 4). DSI had been and would continue to be “paid in full” for those services, and for any use of DSI’s proprietary software involved in running those simulation programs “separate from time-sharing payments.” (¶ 6). The agreement transfers ownership of that timesharing software, “for which DSI was/and is fully paid,” to Censor. (¶ 6). It contemplates that DSI and Censor would negotiate and reduce to writing DSI’s compensation for consulting services or provision of proprietary software “before each and every client engagement in the future.” (¶ 10).

These procedures, but for the writing, appear to have essentially been followed when the timesharing programs were used—for example, for the Mobil engagement. But the development of software for an entirely new technology, the microcomputers, for no particular Censor client is a situation which, from the agreement itself and the testimony, does not appear to have occurred prior to the drafting of the 1975 agreement, and the agreement does not appear to anticipate it. It seems improbable that the parties intentionally omitted any arrangement for DSI’s fees for such services, yet specified that DSI’s fees would be negotiated for its services and use of its software in connection with particular client engagements. The more plausible inference is that this development was simply unanticipated. That being so, I believe the only sensible conclusion is that despite its broad language, paragraph 8 does not apply to new software created in such circumstances. To hold otherwise would mean that the ownership of any new simulation product created by DSI would automatically spring to Censor gratis, forever. Absent clear evidence to the contrary, I cannot interpret the 1975 agreement to produce such a startling result.

The parties’ conduct with respect to the Alpha Micro programs reinforces this conclusion. When Censor clients used the Alpha Micro software in Censor training courses, DSI was paid for the use of that software. In fact, it appears that DSI received all, and Censor none, of the license fee the client paid for the use of the Alpha Micro software. For example, the record indicates that one Censor client paid a license fee of some $19,500 for one year’s use of the disputed software. The client paid that sum to Censor, who paid it in its entirety to DSI (Dep. 226–27; Ex. 20, 21)—an odd result if Censor owned the programs. For another Censor client, DSI itself billed the client for its use of the