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The United States Court of Appeals for the Federal Circuit is now open and in session.

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God save the United States and this honorable court.

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Okay, good morning, everyone.

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The first argued case this morning is number 20, 1139, Bit Management Software, GmbH, against the United States.

[00:00:31] Speaker 02:
Thank you, Your Honor.

[00:00:32] Speaker 02:
Good morning and may it please the Court.

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I'd like to focus on two points, each of which independently requires reversal in this case.

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First, the Navy undisputedly entered into a series of written licenses for bit management software products.

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Those expressed contracts preclude the possibility of a separate implied license on the same subject matter.

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And because the written contracts themselves did not allow the Navy to make hundreds of thousands of copies of the software,

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The court of federal claims erred in holding that there was an implied agreement to that effect separate and apart from the written contracts themselves.

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But even if the court disagrees with that, there was a second independent problem.

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The express contracts required as a condition of the Navy's license to the software that the Navy used a licensing management program called Flexera to track and limit the Navy's use of bit management software.

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The Navy admits it didn't do that.

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Instead, the copies were completely unrestricted as to their use.

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When the licensee of a copyrighted work fails to meet a condition of its license, it infringes the copyright, and that is what happened here.

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Neither of these grounds, both the preclusion of the possibility of an implied license and the failure to meet a condition of the license, requires reversal here.

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Okay, but Mr. Raviv, this is Judge Dyke.

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Putting to one side the second point about the Flexera license, it is the case that the court of federal claims finding, factual finding that there was an agreement here manifested by the exchange of emails to an implied license is supported is not clear error, is not clearly erroneous, that finding.

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Do you agree with that?

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I don't agree with that, Yolana.

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And the first point I want to make is that the course of dealing based conclusion based on the exchanges of emails is not relevant because the parties actually had expressed contracts that government.

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I understand that argument.

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That's not what I'm asking about.

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I'm asking whether as a factual matter the finding

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of the Court of Federal Claims that there was an implied license here is supported by the facts is not clearly erroneous.

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Do you agree with that?

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It may be insufficient, but under your argument, but as a factual matter, how can it be clearly erroneous?

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It was clearly erroneous because there was considerable evidence in the form

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The contract that the parties actually drafted and executed, which did not themselves allow for mass copying of the software, and the fact that to the extent that management was aware that there would eventually be a large-scale deployment of the software, bit management understood and was given good reason to understand that any additional copying

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of the software would be accompanied by payment for those additional copies above and beyond what was allowed for in the written licenses.

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OK.

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But let's assume for the moment that we conclude that that finding is supported by substantial evidence.

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It is not clearly erroneous.

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And then your argument is there can't be an implied license where there's an express contract at the same time?

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That's correct.

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That's right.

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So but there are various cases that hold that you can have an implied license resulting from conduct and exchanges between the parties, right?

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There's nothing.

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You can have an implied license that's not part of a contract, right?

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That's right, Your Honor, yes.

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OK.

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And in Nimmer and in the Fifth Circuit and based in case, that's been recognized, correct?

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Yes, Your Honor.

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We can have an implied license in the absence of an express contract.

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But when there is a written express contract, that does preclude the possibility of a separate implied license or implied contract

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with respect to the same subject matter.

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Well, the cases that you've cited only involve situations where you can't have two express contracts dealing with the same subject matter.

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They don't deal with an express contract and then a separate implied license, correct?

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There aren't that many cases that deal with the particular question of a separate implied license.

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However, I'll direct the

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Your Honor's attention to two cases that did address this issue.

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One of them was Intel Core 3 Broadcom, which is cited in the briefing, 173-F7201, which addressed a case involving a patent license.

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And another case that addressed a very similar set of facts is a recent decision from the Eastern District of Pennsylvania, a case called Kashi's in McGraw-Hill.

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OK.

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Right, and so the distinction here is that you've got one that's an express written contract and then the question is can you overlay an implied contract on top of that, correct?

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That's correct Judge O'Malley and the key issue is whether the implied license deals with the same subject matter and whether it's completely unrelated to the express contract and if

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the separate implied license is related to the express contract.

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And if it is related, then the implied license can exist.

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But I think that what you said is not quite right in the sense that I don't understand the court of federal claims to have found or that the government is arguing that there was a separate contract that gave them a license.

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I think they're saying that there was

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an agreement or implied agreement to give them a license which was terminable and in fact was terminated later.

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Isn't that correct that the argument is not that there was a separate contract but that there was a separate license?

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That may be the court's conclusion but I don't see that as a meaningful distinction Judge Dyke.

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When the parties have memorialized their

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agreement with respect to the subject matter, and here the subject matter was the Navy's authorization to copy and use the software product VF Contact Geo, the possibility of a completely separate implied license is precluded.

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And in particular here, the notion that there was a set agreement which bit management authorized the Navy to make hundreds of thousands of copies of this software.

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in exchange for no compensation at all is not plausible and is not what any rational software company would do.

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about really what we're talking about but it was expected i think even helped that it wouldn't achieve this widespread dissemination in newt but that it wouldn't all be for the same fee that was paid for the initial eighteen installations that the three hundred and fifty thousand or whatever uses would be paid for at

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I think you mentioned $305 a piece or whatever might be negotiated.

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But the idea was not that it was prohibited, but that it would be an additional charge.

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Is that correct?

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Well, it's correct that fit management had every expectation that it would be paid for the additional hundreds of thousands of copies that the Navy made beyond what the Navy had

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been authorized to make and had paid for in the original contract that it had executed.

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Where did it say that it expected to be paid for the ability to use a floating license?

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Paid extra.

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Where in the record do we find that?

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Sit management in a number of places, Judge Dice.

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As we explained in the briefing.

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No, but I'm asking you where specifically.

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I have looked for this and I don't find any document that was transmitted to the Navy where they said we expect to be paid extra for the use of the floating license.

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There was talk about being paid for additional licenses beyond the 38, but I don't see where in the record they said, told the Navy they expected to be paid more for the floating licenses.

[00:10:11] Speaker 01:
Could you show me where that is?

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In one place, Judge Dyke, where the planned deployment schedule was emailed to bit management, the Navy's representative, Alex Liano, wrote, and I quote, looks like there will be great opportunity to increase the number of VF contact geolicensors in the future.

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And bit management reasonably understood that to understand that there would be additional license purchases corresponding to the additional copies that would be made.

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I'd like to make one other point here, Judge Dice, where in a situation involving an implied license, at a minimum, there has to be a meeting of the mind here.

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And at most, what we had here was mutual misunderstandings.

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And even the government's own witness at trial, David Colleen of Planet Nine, acknowledged that this, in his view, bit management ultimately misunderstood what was going on.

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And that, before we run out of time, and that's why you argue here is that they were obligated to use the Flexera software and they didn't.

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Yeah.

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So on that point, don't we have an impossibility situation because the Flexera software wouldn't work?

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And where does that lead us in terms of government liability?

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Well, lead us to the conclusion that the government failed to meet a required condition of its license.

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And the government failed to properly enable Flexera in a way that it could effectively track and limit the usage of the software.

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And that was an essential... Let's assume that the parties, and I think there's a lot of evidence to support this, that the parties thought that the Flexera software could measure usage, but that it turned out that

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It could only measure usage in part for part of the usage.

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What is the result of that?

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If there was, it was impossible to use the Flexura software the way the parties had assumed?

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Well, certain people within the Navy, Judge Geist, did understand.

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Ultimately, it was the Navy's responsibility to so-called flex wrap flexera.

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And it failed to do so in a way that ensured that the usage of the software would be tracked and limited.

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The government would be.

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But take my hypothetical.

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Suppose that what the record shows is that the parties assumed that the flexera software would work, and it didn't.

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And nobody knew that at the time.

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Where does that lead us, if that's the finding?

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Judge Beckett, it leads us to the conclusion that there were at least 429,000 completely unrestricted copies of BF contact geo.

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And even under the government's position as to what it was permitted to do with the software, that is well beyond the scope of whatever license it could have conceivably had.

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So that if the government, is it your position that if the government couldn't use the Flexera as it promised, then it shouldn't have acted at all?

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to copy.

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Exactly.

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Yes.

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It should have proposed something else as to how to control or limit the usage of the software, or it should have simply made a far more limited number of copies of the software.

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And we have no findings on this issue from the Court of Federal Appointments, right?

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No finding as to the issue of the failure to enable Flexera?

[00:14:03] Speaker 01:
Yeah.

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That's correct.

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The Court of Federal Claims completely disregarded this issue, even as the court relied heavily on the fact that there wasn't agreed upon use of flexera, although we disagree about exactly what the intended or expected purpose of the flexera use was.

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But there is no dispute that flexera didn't function and the Court of Federal Claims completely failed to address that issue.

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Both parties agree, do they not, that the Court of Claims actually made a factual finding that the use of the license, that the reason he found that there wasn't implied license is because he found that the bit management was depending upon the government's promise to use Flexera.

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I believe, yeah, the court definitely heavily relied on the expectation agreement.

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That's what Sarah would be a condition of.

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It would certainly be part of how the Navy's management of its licenses to be at contact would move forward, yes.

[00:15:23] Speaker 04:
Oh, okay.

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Any more questions at the moment from the panel for Mr. Roevey?

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He'll have his rebuttal time.

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Okay.

[00:15:32] Speaker 04:
Then let's hear from the government.

[00:15:34] Speaker 04:
Mr. Bolden.

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Good morning and may it please the court.

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Judgment should be affirmed on implied license because the Court of Federal Claims.

[00:15:45] Speaker 01:
Mr. Bolden, could we just, since we were talking about the Flexera software, could you help us on that for a moment?

[00:15:52] Speaker 01:
I mean, it looks as though there's a situation here where both parties assumed you could use Flexera to measure all the usage.

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Turned out you couldn't.

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Where does that leave us?

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And if we assume that the use of Flexera was something that both parties contemplated.

[00:16:11] Speaker 00:
The first issue with respect to that, Your Honor, is that the Flexera term in the contract was a covenant as opposed to a condition.

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And so, according to the court's decisions in storage tech in Jacobson, at most, if there was a... Let's assume that we disagree with you on that position.

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Let's assume that it was a condition of the license, which is essentially what the court of claims found, as a matter of fact.

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So, if it is, then can you answer Judge Dyke's question?

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Yes, based on that, Your Honor, I do believe that the court of federal claims would have to do some additional fact findings, but it appears to be a mutual mistake.

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It appears that bit management attempted to provide the Navy with a modified version of the software that would work with Flexera.

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Both parties believed that it was completely working with Flexera.

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Flexera did limit and track part of the software, but did not limit and track the remaining part of the software.

[00:17:23] Speaker 01:
What troubles me is that when the government finally concluded that the Flexera software wouldn't work, it didn't go to bit management and say, here's a problem.

[00:17:38] Speaker 01:
What do we do now to measure the usage?

[00:17:42] Speaker 01:
wasn't there some sort of obligation to bring that to the attention of bit management to try to work out a solution?

[00:17:49] Speaker 00:
The government did bring that to bit management's attention, Your Honor.

[00:17:54] Speaker 00:
This may not have made its way into the Joint Appendix, but it wasn't discovered until 2015.

[00:18:02] Speaker 00:
By that point, the parties had already started to attempt to negotiate another license for 88 license keys.

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And the government brought it to bit management's attention, and at that point, everything fell apart.

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So the government did bring it to bit management's attention when it was discovered, and that was in 2015.

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At that time, the government also pulled all the usage logs

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for users logging in to use the Spider CD website?

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Council, but the government, even then, the government already knew well before it notified management that it wasn't able to use Flexera for the plug-in file at all.

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And when they pulled the usage, so they weren't pulling the full usage at that point in time.

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That's not correct, Your Honor.

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The government was unaware that Flexera was not

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limiting the web plug-in at up until 2015.

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And what did they say, what did the government say to bit management at that point?

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The government informed the bit management that Flexera wasn't tracking but that they were working with internally and with Planet 9

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to try to determine how many uses there were by looking at how many people were using the Spider 3D application.

[00:19:43] Speaker 03:
But the government continued to push out the copies?

[00:19:49] Speaker 00:
Yes, at that particular time it was continued, it was being deployed

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on computer systems or new computers that were put on the network.

[00:20:01] Speaker 00:
There were only a certain number of active computers on the network at any particular time, but there would be computers that were retired and new computers that were put on the network.

[00:20:11] Speaker 03:
So your answer is yes, they were continuing to push out copies despite the fact that they knew that they couldn't track the usage.

[00:20:20] Speaker 00:
Yes.

[00:20:21] Speaker 00:
That is true.

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They knew that they could track the usage to the application that the management software had been procured in order to run.

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And the use of that application was less than 38 uses per day.

[00:20:43] Speaker 04:
So you're telling us that it was mutually understood

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that nobody misunderstood that after the government brought 38 licenses, the usage was unlimited?

[00:20:58] Speaker 00:
The usage was not being limited by Flexera, Your Honor.

[00:21:03] Speaker 04:
Was unlimited, period, because that's your position now, right?

[00:21:09] Speaker 04:
that there's absolutely no control, no entitlement to payment, no understanding that this major expansion of usage would incur any obligation on the part of the government?

[00:21:27] Speaker 00:
Your Honor, there was no expansion usage.

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As I mentioned, there were less than 38 logins to the SPDR's 3D website per day.

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So even if Flexera was not technically limiting the usage of the software, the software was just not being used by the Navy.

[00:21:49] Speaker 00:
And on that topic.

[00:21:51] Speaker 01:
But you don't know that because there was no way of measuring the plug-in usage, right?

[00:21:57] Speaker 00:
Not directly, Your Honor.

[00:22:00] Speaker 01:
Not directly.

[00:22:01] Speaker 01:
It wasn't measured at all.

[00:22:04] Speaker 00:
It was measured in the sense that the only application that the plugin had been procured for was being used less than 38 times per day.

[00:22:16] Speaker 00:
It's also indirectly ascertained by the fact that bit management software never saw wide usage out in the public.

[00:22:27] Speaker 00:
It was giving away copies for free.

[00:22:29] Speaker 03:
I don't understand what that has to do with anything.

[00:22:33] Speaker 03:
You know, the Navy wanted to push this out through all of its systems.

[00:22:38] Speaker 03:
And so the fact that the Navy was their biggest customer and they didn't sell to a lot of other people, that has nothing to do with whether there was any kind of agreement with the Navy.

[00:22:51] Speaker 00:
Your Honor, it has to do with the demand and whether the usage of the plug-in could be tracked and whether the usage of Spiders 3D is a fair benchmark.

[00:23:02] Speaker 03:
Yeah, but as I read the record that when a user couldn't use the desktop app or couldn't get it to work, they would just jump on the web app.

[00:23:12] Speaker 03:
And so the failure to flex trap means that there was a totally ineffective system in place to monitor any usages.

[00:23:20] Speaker 00:
Your Honor, and so what the user would do is they would jump on the web app and they would go to the spiders 3D website and that access would be tracked.

[00:23:29] Speaker 03:
But if they were able to get it on their desktop, then that access wasn't tracked, right?

[00:23:38] Speaker 00:
If I use the desktop application, that access was tracked up until 2015.

[00:23:44] Speaker 00:
After 2015, when Flexera was removed, you couldn't even use the desktop application.

[00:23:52] Speaker 00:
At that point, you had to use the web plugin.

[00:23:55] Speaker 00:
And again, that usage through Spyder 3D was tracked.

[00:24:03] Speaker 01:
I don't understand that.

[00:24:05] Speaker 01:
I thought it was agreed that the plugin usage was not tracked.

[00:24:09] Speaker 01:
that Flexera couldn't do that?

[00:24:12] Speaker 00:
It was not tracked through Flexera.

[00:24:15] Speaker 00:
It was tracked through the end use through Spider's 3D, your honor.

[00:24:21] Speaker 00:
So you would use the web plug-in, and you would go on the web on the Navy's intranet and go to the Spider's 3D website.

[00:24:31] Speaker 00:
that information was tracked from roughly 2014 to 2016.

[00:24:35] Speaker 00:
The number of unique visitors per day or even non-unique visitors, the number of visits per day was tracked.

[00:24:46] Speaker 00:
So that information can be used to determine how many times management software was being used by the Navy.

[00:24:58] Speaker 00:
Your Honors, I'd like to quickly address

[00:25:00] Speaker 00:
the first issue that bit management brought up, which is that an exclusive, or I'm sorry, an express license precludes an implied license or implied contract.

[00:25:18] Speaker 01:
Bit management.

[00:25:19] Speaker 01:
You're not contending here that there was an implied contract, if I understand it.

[00:25:23] Speaker 01:
It's just that there was an implied license which can be granted without a contract.

[00:25:28] Speaker 00:
That's correct, Your Honor.

[00:25:30] Speaker 00:
And in fact, the implied license is perfectly understandable in this case because you have two different sets of express contracts, neither of them directly between the government and management.

[00:25:46] Speaker 00:
And those express contracts do not describe what is a license.

[00:25:51] Speaker 00:
They do not describe exactly what the intended use is to be.

[00:25:55] Speaker 00:
And so essentially, you have to have

[00:25:58] Speaker 00:
and implied license to breathe life into those express written contracts.

[00:26:04] Speaker 00:
That's completely different than the situation that bit management relies on in the, for example, the ground improvement tax case or the Normandy case where there was an express written contract that precluded the party who was trying to assert an implied contract that was directly contradictory to those express contracts.

[00:26:28] Speaker 03:
So are you interpreting the written contracts to say that the written contracts don't provide enough information?

[00:26:36] Speaker 03:
I mean, that doesn't mean that they're not relating to the same topic area.

[00:26:42] Speaker 00:
The written contracts are ambiguous, Your Honor, and they broadly relate to the same topic.

[00:26:53] Speaker 00:
of bit management software, but the contracts don't describe what kind of licenses are being procured and how those licenses are to be deployed.

[00:27:03] Speaker 03:
Well, isn't there a methodology to deal with that, to amend the written contracts if there's some confusion?

[00:27:11] Speaker 00:
Your Honor, that doesn't always happen.

[00:27:14] Speaker 00:
And there were several times that bit management themselves amended what they would do.

[00:27:20] Speaker 00:
They delivered different kinds of software than what was specified in the contracts.

[00:27:25] Speaker 00:
The parties had been working and collaborating for years before the contracts, during deployment, then even after deployment.

[00:27:33] Speaker 00:
And all of that was taken into consideration by the Court of Federal Claims.

[00:27:38] Speaker 00:
So you have to look at the totality of the circumstances and that's exactly what the Court of Federal Claims did and its approach was not clearly erroneous on that.

[00:27:49] Speaker 03:
But isn't the question of whether there's an implied license, isn't that a question of law that turns on underlying facts but it's still a question of law?

[00:28:01] Speaker 00:
Ultimately, Your Honor, if the court applied the wrong standard, for example, if the court, if the court federal claims felt that this was not an affirmative defense,

[00:28:11] Speaker 00:
and push the burden on to bit management, then that would be an issue of law.

[00:28:18] Speaker 00:
That is something that bit management asserted in their opening brief, but it did not seem to be addressed in their reply brief.

[00:28:25] Speaker 00:
And so it does not appear that there are any issues of law with respect to the implied license at this particular point, the second issue raised in the brief.

[00:28:35] Speaker 00:
I'd also like to mention that the situation here is very much akin

[00:28:40] Speaker 00:
to the court's decision in the storage tech case.

[00:28:44] Speaker 00:
In that particular case, there was a written license between the copyright owner and between the customers.

[00:28:53] Speaker 00:
And the customer's agent was able to assert that there was an implied license for the use that it made because the written license didn't expressly preclude the copyright rights.

[00:29:08] Speaker 03:
You're attempting now to say that what the claims court really did was say that there was an ambiguity in the written documents, and so they were using parole evidence to interpret those documents.

[00:29:22] Speaker 03:
But that's not what the court did.

[00:29:25] Speaker 03:
It found a separate implied license, right?

[00:29:30] Speaker 03:
That is what the court found?

[00:29:33] Speaker 03:
It didn't say it was interpreting the written contracts.

[00:29:38] Speaker 00:
That's correct, Your Honor.

[00:29:39] Speaker 00:
I think that either approach gets you to the exact same spot.

[00:29:44] Speaker 03:
Except for you do have the problem that you're not supposed to have an implied contract or implied license in the face of a written contract, right?

[00:29:54] Speaker 00:
That's correct.

[00:29:55] Speaker 00:
Although, again, there's no privity between the government and BIT management.

[00:30:01] Speaker 03:
That's because the government didn't want there to be direct privity, right?

[00:30:06] Speaker 03:
But the government understood it was working directly through an agent at its own request.

[00:30:13] Speaker 00:
The Planet Nine was not the agent of either party.

[00:30:18] Speaker 00:
The Court of Federal Claims expressly found that Planet Nine was not bit management's agent.

[00:30:23] Speaker 00:
That's on page three of the appendix.

[00:30:26] Speaker 00:
And that was based on the stipulation between the parties.

[00:30:29] Speaker 00:
And the record shows that Planet Nine played an important role.

[00:30:32] Speaker 00:
It wasn't the agent of either party.

[00:30:35] Speaker 00:
Planet Nine provided advice and recommendations to bit management to help negotiate the terms of the proposal.

[00:30:42] Speaker 00:
And at the end of the day, Your Honor, Planet Nine understood that all parties understood that bit management had provided the Navy with flex or floating licenses.

[00:30:55] Speaker 00:
That's on pages 1693 and 1709 to 1710.

[00:31:01] Speaker 00:
And Your Honor?

[00:31:02] Speaker 03:
Can you cite any case where the word privity is actually used in the context of assessing whether you can have an implied agreement in the face of a written express contract on the same subject matter?

[00:31:16] Speaker 00:
Your Honor, we're not saying that privity is an absolute rule.

[00:31:20] Speaker 00:
And as far as the cases, we cite the Hawkins case, the Supreme Court case from the 1870s, which talks about an agreement between the parties

[00:31:31] Speaker 00:
that language of an agreement between the parties has been in many of the cases that we cite.

[00:31:37] Speaker 00:
It's in the Schism case as well.

[00:31:42] Speaker 00:
It's in Lee.

[00:31:45] Speaker 03:
Most of the cases... Are you saying that bid management wouldn't be a third party beneficiary of Planet Nine's agreement with the Navy?

[00:31:55] Speaker 00:
What we're saying, Your Honor, is that

[00:31:58] Speaker 00:
The issue of privity is a consideration that has to be taken into account along with what's in the contract, the language that's in the contract, the relationship between the parties.

[00:32:10] Speaker 00:
It's essentially the totality of circumstances, and privity is one of those things.

[00:32:17] Speaker 00:
If BIP management was a third-party beneficiary, that might have an effect, but at the end of the day, its overall course of conduct, its interactions

[00:32:27] Speaker 00:
the things that the Court of Federal Claim cited and relied upon to reach its conclusion that are controlling.

[00:32:36] Speaker 00:
And I understand that my time is up, so unless there are any further questions, we ask that judgment be affirmed.

[00:32:43] Speaker 00:
Thank you.

[00:32:43] Speaker 04:
Any more questions for Mr. Bolden?

[00:32:46] Speaker 04:
No, thank you.

[00:32:48] Speaker 04:
No?

[00:32:49] Speaker 04:
No.

[00:32:49] Speaker 04:
Okay, thank you.

[00:32:50] Speaker 04:
All right, Mr. Rapide, you have your rebuttal.

[00:32:53] Speaker 01:
Mr. Rapide?

[00:32:54] Speaker 04:
Are you there?

[00:32:55] Speaker 04:
Can you hear us?

[00:32:57] Speaker 04:
We don't hear you.

[00:32:59] Speaker 02:
Yes.

[00:33:00] Speaker 02:
Apologies, Your Honor.

[00:33:01] Speaker 02:
Thank you.

[00:33:02] Speaker 02:
On the last point that you were discussing with Mr. Bolden, this court, as we explained in the ground improvement case, in the Normandy apartment case, and courts in numerous other jurisdictions have applied the rule requiring preclusion in cases

[00:33:20] Speaker 02:
or there was not necessarily a direct privity between the parties to the alleged implied agreement.

[00:33:27] Speaker 01:
And if you have at least one case in the Fifth Circuit, the Lularama case, which doesn't deal with separate contracts, but says that you're going to have an agreement, an express agreement, but still have an implied license that is granted apart from the agreement, right?

[00:33:46] Speaker 02:
Well, Judge Dike, in that case, the reason why the court reached that conclusion, the Lularama case, is because the subject matter of the alleged implied license was pretty far afield from the matter of the express contract.

[00:34:04] Speaker 02:
There was a serious question whether the copyrighted works that were covered by the express contract were actually covered by the implied license.

[00:34:15] Speaker 02:
And in the ground imprisonment case and the apartment case decided by this court, both of those cases actually involved, if anything, more attenuated relationships between the parties to be alleged implied contracts than we have here.

[00:34:33] Speaker 01:
I mean, here, as... Those cases didn't involve implied licenses.

[00:34:38] Speaker 01:
They involved implied contracts, right?

[00:34:42] Speaker 01:
Yes, that's correct.

[00:34:43] Speaker 02:
Yes.

[00:34:45] Speaker 02:
If there's any case where this rule should apply, even in the lack of direct privity between the parties, it's fine.

[00:34:52] Speaker 02:
The government literally insisted that bit management contracted a third party who would act solely as an intermediary or conduit, and bit management is entirely prepared to contract directly with the government.

[00:35:07] Speaker 02:
The government refused to do so for technical or legal reasons that were never fully explained.

[00:35:14] Speaker 02:
And if I may, Your Honor, before my time is up, I'd like to address the question of the usage that you were discussing with Mr. Bolden.

[00:35:22] Speaker 02:
The weblogs that Mr. Bolden alluded to are a completely inadequate picture of the usage of the S-Contact geo.

[00:35:31] Speaker 02:
For one reason is because there were no weblogs available for the first 14 months after the mass deployment began.

[00:35:38] Speaker 02:
So we have no data or there's no way to get any data on how much

[00:35:43] Speaker 02:
be at contact with you shortly after it was massively deployed and during which one would expect that the usage would be at the highest.

[00:35:55] Speaker 01:
Don't we need the Court of Federal Claims to address that issue since we don't have any findings and you're arguing opposite positions on it from the record?

[00:36:06] Speaker 02:
We may need findings on that issue, Judge Wright.

[00:36:09] Speaker 02:
That's correct.

[00:36:10] Speaker 02:
And in addition, if I may,

[00:36:12] Speaker 02:
There is no record whatsoever from either Flexera or the weblog as to the use of bs-contact-year outside of the context of Spriter 3D.

[00:36:23] Speaker 02:
And bs-contact-year is fully functional.

[00:36:25] Speaker 02:
It would be used anytime any person navigated to a website that contained a certain type of formatted file called an .x3d file.

[00:36:33] Speaker 02:
In such a case, bs-contact-year would automatically launch.

[00:36:37] Speaker 02:
So the government had the benefit of these hundreds of thousands of copies with absolutely no way to track or limit their usage for the period throughout which all those copies were installed onto the Navy's entire U.S.

[00:36:50] Speaker 02:
network.

[00:36:52] Speaker 03:
Before you sit down, what is your response to the government's argument that what really happened here was a mutual mistake of fact?

[00:37:02] Speaker 02:
Well, ultimately, it was the government's responsibility, as noted in the language of the 2012 contract that may be executed, to so-called enable flexera.

[00:37:13] Speaker 02:
And the government itself has acknowledged that flexera was not properly enabled.

[00:37:17] Speaker 02:
And at trial, Your Honor, it was clear that certain of the Navy's technical experts

[00:37:28] Speaker 02:
were aware of what the limitations of Flexera were and were probably aware throughout this period.

[00:37:35] Speaker 02:
The problem is that the people who were negotiating on behalf of the Navy and were making representations that Flexera could be used had no appreciation of the limitations of Flexera.

[00:37:51] Speaker 03:
Wouldn't mutual mistake void any contract, even an implied one?

[00:37:58] Speaker 02:
Not necessarily a runner in this case where one party is the one who is responsible for that mistaken and has full control over whether the promise means of.

[00:38:10] Speaker 02:
limiting the usage of the software would be effective, that party should not be able to get out of it simply by avoiding whatever agreement they might have had.

[00:38:24] Speaker 02:
And in particular here, we're at the Navy's insistence fit management to fit its own standards

[00:38:31] Speaker 02:
licensing protection mechanism with the assurance that it would not be necessary because Flexera would take its place as a means of helping to protect the management rights with respect to copying and distribution and use of its office.

[00:38:52] Speaker 04:
Any more questions for Mr. Alves?

[00:38:58] Speaker 03:
No, thank you.

[00:38:59] Speaker 04:
Okay, do you have a last word for us, Mr. Aviv?

[00:39:04] Speaker 02:
Uh, Your Honors, uh, based on the arguments that's made, we respectfully request that the, uh, court of, uh, that the Federal Circuit reverse and remand.

[00:39:16] Speaker 04:
Okay.

[00:39:16] Speaker 04:
Thank you.

[00:39:17] Speaker 04:
Thanks to both counsels.

[00:39:18] Speaker 04:
The case is taken under submission.