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Progressive in licensing dispute with Pitney Bowes

Licensing disputes between companies are more common these days, especially with the explosion of technology. Progressive Casualty Insurance Company, a well-known provider of auto insurance, recently sued Pitney Bowes, which had acquired a company that previously signed a site license agreement with Progressive. Texas companies that are involved in similar business disputes may find this case interesting.

The software license in question was first reached in 1991, which was before use of the Internet became widespread. The license covered applications then sold by LPC (the company Pitney later acquired). These applications were used to assist in finalizing mailing addresses for current and potential customers, along with other tasks. One supplemental agreement between the companies established a specific installation site where the software was to be operated. That original site was later phased out after another supplemental agreement added a second installation site in 2001.

According to reports, the license agreement allegedly allowed Progressive to make copies of the software and also allowed for remote access of the software. However, in 2011 Pitney informed Progressive that the companies had been purportedly misinterpreting the terms of the license agreement for the past two decades. According to Pitney, the agreement only allowed use of the software on one computer, instead of on various computers. The company claimed that Progressive's remote access of the software violated the terms of their license agreement. As a result, it refused to renew Progressive's license keys until the other company agreed to pay more money.

As you can guess, licensing disputes are very difficult. In this case, one expert says that site licenses typically mean the whole "location," which would translate Progressive's software usage to just one computer. On the other hand, if applications are accessed via mobile devices, this could complicate things since the mobile viewing wouldn't be fixed to a specific site location. It is as yet unknown how this dispute will be resolved, and businesses with similar licensing agreements may benefit from following the course of the litigation as it makes its way through the federal courts.

Source: PC World, "Auto Insurer Progressive Alleges Software License Shakedown by Pitney Bowes," Chris Kanaracus, July 17, 2012

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