Opinion ID: 199239
Heading Depth: 3
Heading Rank: 2

Heading: Allocation of Split Licenses

Text: In June and July 1996, AccuSoft entered into licensing agreements with Aimtech Corporation (“Aimtech”), NetObjects, Inc. (“NetObjects”), and Caere Corporation (“Caere”) (collectively “licensees”), granting the recipients the right to distribute, as part of their software products, both the IFL and AccuSoft's successor product, ImageGear. Each agreement included a provision allocating the licensing fee between the two products. The provision stated that the portion of the fee associated with the IFL license was based on specified estimates (these estimates apparently came from the customers) concerning the number of copies of the IFL that would be sold. The remainder of the licensing fee was for an unlimited license to use ImageGear. At the hearing before the master, Snowbound argued that, although the agreements recited this allocation of the licensing fees between the two products, other language in the agreements suggested that the licensees were not obligated to -19- limit their IFL sales to the levels on which the fee allocation was based.8 The NetObjects agreement, for example, stated that “[t]his is a fully paid up license fee and no additional fees are due from Customer during the term of this Agreement,” and also provided that “[t]he fees under this agreement are not returnable.” Snowbound contended that this language, and similar language in the other agreements, suggested that the licensees effectively obtained unlimited licenses to the IFL and were not bound by the allocations. Snowbound also asserted that it was not clear that the licensees had ever in fact switched to using ImageGear. On the basis of these arguments, Snowbound claimed the entirety of the licensing fee from each agreement. AccuSoft, for its part, contended that the license allocations were intended to be enforceable and presented testimony of its officers stating that they believed the allocations were enforceable when they signed the agreements. In his memorandum, the master rejected Snowbound's position with minimal analysis, stating, without elaboration, that “in the absence of language in the Settlement Agreement that addresses this issue . . . Palo has not established a right 8 Snowbound also argues that these licensing agreements violated provisions of the settlement agreement prescribing the form of licenses AccuSoft could issue and therefore constituted contempt of the court's order. We review this assertion in Part