Page:Dynamic Solutions v. Planning & Control.pdf/5

 were written in FORTRAN and, designed to run on timesharing, mainframe computers, were stored on timesharing computer systems in accounts maintained by DSI and which could be accessed only by those who had knowledge of DSI’s “password.” When the simulation games were run in the course of a training seminar, each terminal would be hooked up to the mainframe computer through a telephone line. (Tr. 12–14; 74).

On December 8, 1975, DSI by Melhado and Censor & Company by Censor executed a letter agreement (hereinafter sometimes referred to as the “1975 agreement” or “the agreement”) intended “to clarify, define and regularize the relationship, the responsibilities, obligations and rights of both parties.” (¶ 2). The agreement, drafted by Censor, first describes various aspects of the parties’ then-existing relationship. DSI, it states, “currently serves Censor and will continue to serve as a time-sharing broker, i.e. arranging for time-sharing services,” for which DSI was paid directly by Censor clients. (¶ 3). The agreement noted, “DSI provides, for some Censor clients, consulting services to create the new software that produces the simulations.” (¶ 4). DSI also “provides and makes available, from time to time, certain software which is proprietary to DSI….” (¶ 5). Two examples of programs considered DSI “proprietary software” are given (¶¶ 4, 11), but the term is not further defined in the agreement. DSI had “[i]n the past … been paid in full for the consulting services and for the use of the proprietary software,” and the agreement provides that “this practice will continue by which DSI will be paid for consulting services they render or for the use of any proprietary software, separate from time­ sharing payments.” (¶ 6).

The contract then establishes the ownership of the computer programs and simulation games. The agreement provides, “[t]he new software, i.e., the computer simulations that result from the efforts of Censor plus the consulting services provided by DSI, for which DSI was and is fully paid, become products which are now the sole and exclusive property of Censor. DSI hereby expressly disclaims any and all claims of ownership, proprietorship or partnership or other interest of any nature whatsoever in these computer simulation products.” (¶ 7). DSI further “disclaimed any interest in current simulation products, already created, and/or to new products now under development or those that may be developed at any time in the future.” (¶ 8). Although the agreement as drafted by Censor would also have transferred ownership of the DSI proprietary software involved in the simulation programs, that provision was struck by Melhado. (Ex. 1 ¶ 7). The source codes at issue in this lawsuit operate two of the games which, plaintiff concedes, belong to Censor under paragraph 8 of the agreement: “Operations Management” and “Project Management” (together, the “simulation games”). Plaintiff also concedes that the source codes that were written to operate these two games on timesharing computers belong to Censor under the 1975 agreement. (These source codes are hereinafter referred to as the “1975 programs” or the “1975 source codes”).

The agreement went on to provide: Before each and every client engagement in the future, whether for an outright sale, a licensing agreement for an existing product, for the design of a new, custom simulation or for the provision of any Censor service which involves DSI in any way, a brief work order will be prepared by Censor specifying (a) consulting services and (b) proprietary software required and (c) fees to be paid to DSI for