TIBCO Software seeks more than $22 million from GAIN Capital due to software over-deployment

Maria Nikolova

TIBCO seeks more than $22,064,629 based on GAIN’s alleged unauthorized use of TIBCO software without a license, including support and maintenance fees.

It’s official – the mediation negotiations that GAIN Capital and TIBCO Software agreed on in January this year have not born the desired result. As per the latest court filings with the California Northern District Court, TIBCO continues to insist that it is owed a heavy sum by the broker because of alleged over-deployment of its software. To be more precise, TIBCO says it is owed more than $22 million for unauthorized use of its software by the online trading major.

Let’s recall that TIBCO’s complaint asserts a number of claims against GAIN, including breach of contract; breach of the implied covenant of good faith and fair dealing; and copyright infringement.

The claims all relate to GAIN’s alleged over-deployment of certain products of TIBCO. On May 18, 2016, TIBCO notified GAIN that it intended to audit GAIN’s compliance with its use of the license. TIBCO hired KPMG to conduct an on-site audit in August 2016. KPMG produced a final deployment report, based on its August 2016 audit, which indicated that GAIN had over-deployed TIBCO software.

In 2016, the parties entered into another license agreement covering nine units of TIBCO ActiveSpaces Enterprise Edition, fifty-nine (59) units of TIBCO Enterprise Message Service, and eighty-one (81) units of TIBCO Hawk software. GAIN was required to make payment within 30 days.

GAIN refuses to pay licensee fees for the additional units deployed outside of the enterprise terms pursuant to the 2008 and 2010 licenses—worth more than $20 million including associated maintenance costs—and has refused to pay any of the more than $6 million it owes TIBCO under the separate 2016 license agreement.

In September last year, Judge Edward J Davila of California Northern District Court sided with GAIN Capital Group LLC and dismissed some of the claims in the case.

But now the parties in the lawsuit are clashing again.

TIBCO seeks at least the following relief:

  • In excess of $22,064,629 based on GAIN’s unauthorized use of TIBCO software without a license, including support and maintenance fees.
  • $5,243,800 comprised of invoices pursuant to the 2016 License Agreement.
  • Late Fees in excess of $1 million.
  • All damages available under the Copyright Act, including, at TIBCO’s election, either actual damages and disgorgement of profits, or the maximum statutory damages allowed;
  • A permanent injunction, enjoining GAIN and its employees, officers, parents, subsidiaries, and agents from using the Copyrighted Works;
  • For pre-judgment and post-judgment interest at the legal rate;
  • For TIBCO’s reasonable attorney’s fees, and other costs of suit incurred pursuant to the applicable license agreements, including the 2008 Terms and Conditions, which state in part: “Licensee agrees to pay all reasonable costs (including reasonable attorneys’ fees) incurred in collecting past due amounts under this Agreement.”

GAIN, on the other hand, anticipates seeking rescission of the 2016 Order Form. If liability is established, GAIN contends damages should be calculated on the basis of the correct methodology and relevant definitions provided by TIBCO to GAIN in Enterprise End of Term Deployment Record sent to GAIN in March 2016.

The case is captioned TIBCO Software Inc., v. Gain Capital Group, LLC (5:17-cv-03313).

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