TIBCO Software, GAIN Capital clash over documents about software deployment
The broker refuses to produce all documents related to deployment of TIBCO software by GAIN UK.
A lawsuit brought by TIBCO Software against online trading major GAIN Capital continues at the California Northern District Court, with the parties now clashing over evidence.
The underlying dispute concerns software deployment. Beginning in 2008, GAIN licensed TIBCO software on a worldwide “enterprise basis,” meaning GAIN was entitled to deploy an unlimited number of software units during a designated “enterprise term,” the latest of which ended in 2012. According to TIBCO, GAIN did not have a license to deploy any units outside of that enterprise term- e.g. past 2012.
In August 2016, KPMG audited GAIN and determined GAIN had deployed hundreds of software units outside of the enterprise term, that is, without a valid license. After the KPMG Audit, GAIN executed a new software license (the “2016 License”) for approximately $5 million, and then refused to pay. TIBCO sued for breach of contract, breach of the covenant of good faith and fair dealing, and copyright infringement.
In its essence, this lawsuit is about:
- the software licenses executed in 2008 and 2010, and the “order form” signed in 2016, between TIBCO Software Inc. and GAIN Capital Group, LLC pursuant to which GAIN was permitted use certain TIBCO software—Enterprise Message Service (EMS), Hawk, and, allegedly, ActiveSpaces Enterprise Edition;
- the purported “over-deployment” and “unauthorized use” of that software by GAIN Capital Group, LLC as identified by KPMG in what GAIN calls a flawed 2016 audit.
The latest focus of the arguments between the parties in the lawsuit is discovery.
TIBCO claims that it is entitled to communications about the subject matter of this lawsuit, including but not limited to the deployment of all TIBCO software by GAIN U.K.
GAIN, however, is said to refuse to produce any documents related to deployment of TIBCO software by GAIN UK on the grounds that “any such software would be subject to a wholly distinct contract which is not at issue in this action and therefore not relevant to any party’s claim or defense.”
GAIN stresses that GAIN Capital Limited U.K. (GAIN UK) is not a party to this action. And GAIN U.K.’s use of TIBCO software is governed by different licenses with TIBCO, which are not even alleged as part of the Complaint.
GAIN notes that it has agreed to produce, as TIBCO has requested, non-privileged communications related to the subject matter of this lawsuit—i.e. the 2008 and 2010 licenses and the 2016 “order form” between TIBCO and GAIN Capital Group, LLC for EMS, Hawk, and, allegedly, ActiveSpaces; and the purported “over-deployment” and “unauthorized use” of that software as identified by KPMG in its flawed 2016 audit.
GAIN also stresses that it has agreed to produce “relevant non-privileged responsive documents from relevant custodians relating to GAIN’s communications with GAIN U.K. regarding the TIBCO contracts and software at issue in this action, which pertains to TIBCO software used by GAIN in the United States.” In other words, GAIN agreed to produce exactly what TIBCO seeks in the document request, and its production will include documents from custodians in the U.K., including Steven McCarthy. Nevertheless, TIBCO alleges that GAIN’s response is deficient.
TIBCO argues that GAIN stops short of explaining why communications between GAIN and GAIN U.K. regarding the subject matter of this case, including deployment by GAIN’s U.K. office, are not relevant.
TIBCO wants the Court to compel GAIN to provide the full information requested.
The case is captioned TIBCO Software Inc., v. Gain Capital Group, LLC (5:17-cv-03313).
