Fifth Circuit Reverses Summary Judgment for Plaintiffs’ Breach of Contract Claim
By Nathan Lovejoy – Edited by Avis Bohlen
The Compliance Source, Inc. v. GreenPoint Mortgage Funding, Inc., __ F.3d __, 2010 WL 4056112, No. 09-10726 (5th Cir. Oct. 18, 2010)
In Compliance Source, Inc. v. GreenPoint Mortgage Funding, Inc., the United States Circuit Court for the Fifth Circuit reversed and remanded the decision of the United States District Court for the Northern District of Texas, which had granted summary judgment in favor of the defendant, a software licensee, on the plaintiffs’ claim for breach of contract. The court also affirmed the district court’s grant of summary judgment to the plaintiffs on the defendant’s counterclaim for breach of their settlement agreement.
The Fifth Circuit held that the license agreement for licensor’s database technology did not permit the licensee to authorize third-party use, even if such use was on behalf or for the benefit of the licensee. In so holding, the court took a narrow approach to its interpretation of the agreement, distinguishing the license in GreenPoint from earlier cases in light of its clear withholding of rights not expressly given.
The Internet Cases blog provides a brief overview of the case. WTN News features an analysis that discusses how the decision might leave open the possibility that a breach claim could extend to situation where third parties merely access software or technology licensed under similar terms. (more…)