Court Opinion

ID: 4662765
Source: CourtListenerOpinion
Date Created: 2021-02-25 16:01:06.186871+00
Date Added: 2024-06-11T08:02:23.742277
License: Public Domain

Case: 20-1139    Document: 51     Page: 1   Filed: 02/25/2021

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

       BITMANAGEMENT SOFTWARE GMBH,
               Plaintiff-Appellant

                             v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2020-1139
                  ______________________

    Appeal from the United States Court of Federal Claims
 in No. 1:16-cv-00840-EJD, Senior Judge Edward J.
 Damich.
                 ______________________

                Decided: February 25, 2021
                 ______________________

     ADAM RAVIV, Wilmer Cutler Pickering Hale and Dorr
 LLP, Washington, DC, argued for plaintiff-appellant. Also
 represented by BRENT GURNEY; MARK CHRISTOPHER
 FLEMING, Boston, MA.

     SCOTT DAVID BOLDEN, Commercial Litigation Branch,
 Civil Division, United States Department of Justice, Wash-
 ington, DC, argued for defendant-appellee. Also repre-
 sented by JEFFREY B. CLARK, GARY LEE HAUSKEN, PATRICK
 C. HOLVEY; RICHARD JAMES HUBER, Office of General Coun-
 sel, United States Department of the Navy, Washington
Case: 20-1139      Document: 51    Page: 2   Filed: 02/25/2021

 2           BITMANAGEMENT SOFTWARE GMBH     v. UNITED STATES

 Navy Yard, DC; ANDREW PAUL ZAGER, United States Navy,
 Alexandria, VA.
                 ______________________

     Before NEWMAN, DYK, and O’MALLEY, Circuit Judges.

     Opinion for the court filed by Circuit Judge O’MALLEY.

      Concurring opinion filed by Circuit Judge NEWMAN.

 O’MALLEY, Circuit Judge.

     In 2013, the United States Navy (“Navy”), through the
 Naval Facilities Engineering Command (“NAVFAC”), cop-
 ied BS Contact Geo version 8.001, copyrighted graphics-
 rendering software created by German company Bitman-
 agement Software GmbH (“Bitmanagement”), onto all com-
 puters in the Navy Marine Corps Intranet. No express
 contract or license agreement authorized the Navy’s ac-
 tions. In 2016, Bitmanagement filed a complaint against
 the government in the United States Court of Federal
 Claims (“Claims Court”), alleging copyright infringement
 pursuant to 28 U.S.C. § 1498(b). After trial, the Claims
 Court found that, while Bitmanagement had established a
 prima facie case of copyright infringement, the Navy was
 not liable because an implied license permitted it to make
 the copies. See Bitmanagement Software GmbH v. United
 States, 144 Fed. Cl. 646 (2019). Bitmanagement appeals
 from that decision.
     We do not disturb the Claims Court’s findings. The
 Claims Court ended its analysis of this case prematurely,
 however, by failing to consider whether the Navy complied
 with the terms of the implied license. The implied license
 was conditioned on the Navy using a license-tracking soft-
 ware, Flexera, to “FlexWrap” the program and monitor the
 number of simultaneous users. It is undisputed that the
 Navy failed to effectively FlexWrap the copies it made and,
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES           3

 thus, that Flexera tracking did not occur as contemplated
 by the implied license. The Navy’s failure to comply creates
 liability for infringement. We therefore vacate the Claims
 Court’s decision and remand for a calculation of damages.
                        I. BACKGROUND
                A. The Parties and the Software
     Bitmanagement develops software for rendering three-
 dimensional graphics. Peter Schickel, CEO, and Alex
 Koerfer, Financial Officer, co-founded the company in
 2002. One of Bitmanagement’s products is BS Contact
 Geo, a three-dimensional visualization program, which Bit-
 management first released in 2006. BS Contact Geo ena-
 bles the visualization of geographic information in third-
 party hardware and software products. It renders realistic
 terrain and city models and allows a user to position virtual
 objects using geographic coordinates.
     Bitmanagement primarily licenses its software via
 “PC” or “seat” licenses, which allow one installation of the
 software onto one computer per license. Each copy of the
 BS Contact Geo software includes both a desktop executa-
 ble file (“EXE version”) and a web browser plugin file
 (“OCX version”). The EXE component launches the soft-
 ware as a standalone application whereas the OCX compo-
 nent launches the software within a web browser.
     In 2005, Bitmanagement began working with David
 Colleen, CEO of software reseller Planet 9 Studios, Inc.
 (“Planet 9”), to market and sell Bitmanagement’s products
 in the United States. Bitmanagement and Planet 9 exe-
 cuted a Finder’s Fee Agreement, which provided “for sup-
 port of the sales activities of [Bitmanagement] and for the
 sole compensation of [Planet 9] in respect of [its] activities
 regarding support of [Bitmanagement] sales activities” and
 clarified Planet 9 was “neither entitled to represent [Bit-
 management] in any legal or other transaction nor to make
 any binding or nonbinding statement o[n] behalf of
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 4          BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 [Bitmanagement].” J.A. 10057–58 ¶ 36. Planet 9 was typ-
 ically compensated for reselling Bitmanagement’s software
 with a commission pursuant to a reseller agreement at-
 tendant to each sale.
     The Navy began development of SPIDERS 3D, “a
 web-based platform that provides a virtual reality environ-
 ment for NAVFAC engineers and technicians to view and
 optimize configurations of Navy installations, bases, and
 facilities,” in 2006. Bitmanagement, 144 Fed. Cl. at 649.
 SPIDERS 3D is located on NAVFAC’s internal enterprise
 portal and is thus only accessible to individuals with a De-
 partment of Defense Common Access Card or NAVFAC-
 sponsored access permissions. SPIDERS 3D requires a
 three-dimensional visualization software to provide visual-
 ization of Naval facilities. To fulfill this need, Alex Viana,
 a NAVFAC deputy program manager, approached Colleen
 from Planet 9, who recommended Bitmanagement’s
 BS Contact Geo.
     Thereafter, the Navy purchased copies of the Bitman-
 agement BS Contact Geo system, through intermediary
 Planet 9, on three occasions: one copy purchased in 2006
 for $990, 100 copies purchased in 2008 for $30,000, and
 18 copies purchased in 2012 for $5,490. Each transaction
 was embodied in a written contract that included the cor-
 responding number of PC seat licenses, as we next discuss.
                      B. 2006 Purchase
     In September 2006, the Navy purchased, for testing
 purposes, one PC license of BS Contact Geo version 7.000
 from Planet 9 for $990. To accomplish the transaction, Bit-
 management and Planet 9 executed a software license
 agreement wherein Bitmanagement conferred “1 PC li-
 cense” to Planet 9 as the licensee and permitted Planet 9
 “to resale [sic] and/or to provide these licenses of BS Con-
 tact Geo to [NAVFAC].” J.A. 5097. The agreement speci-
 fied that the license “shall be enabled by the Licensor for
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES          5

 PC with computername ‘……………………….’ (to be mutu-
 ally agreed upon).” Id.
      Thereafter, Viana advised Planet 9 of an issue with Bit-
 management’s default licensing scheme. In November
 2006, Colleen relayed the message to Bitmanagement, ex-
 plaining that Bitmanagement’s default licensing scheme
 was incompatible with the Navy’s secure intranet because
 the Navy could not approve BS Contact Geo if, as was Bit-
 management’s normal practice, the end user would be re-
 quired to contact Bitmanagement for a license key in order
 to use the program on a particular computer. Schickel re-
 sponded on behalf of Bitmanagement that Bitmanagement
 was “open for any licensing scheme that suits the US Navy
 better” and was “willing to do [its] utmost to enable [an-
 other] licensing functionality, if requested.” J.A. 6986. In
 an email to Schickel and Colleen, Viana responded that the
 Navy needed a copy of BS Contact Geo that included the
 license key and that was not PC-specific because the Navy
 did not know “what machine(s) the application will be
 tested on.” J.A. 6985. Viana also noted that the Navy an-
 ticipated needing “an initial 15 licenses, with a potential
 for as many as 100 or more licenses later on.” Id. In re-
 sponse, Bitmanagement, through intermediary Planet 9,
 provided BS Contact Geo to the Navy with two licensing
 keys that were not PC specific.
     In May 2007, at the Navy’s request, Bitmanagement
 provided the Navy with a “silent installer for BS Contact
 Geo intended for bulk installations,” which, Schickel ex-
 plained, was “helpful for an administrator to do installa-
 tions on a large scale even on remote computers connected
 via intranet or internet.” J.A. 5736.
                      C. 2008 Purchase
     In February 2008, the Navy submitted to Planet 9 a
 $30,000 purchase order (“the 2008 Navy Purchase Order”)
 for 100 seat licenses of BS Contact Geo. Attendant to that
 purchase, Bitmanagement and Planet 9 executed a second
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 6         BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES

 licensing agreement (“the 2008 Reseller Agreement”)
 wherein Bitmanagement authorized Planet 9 to resell
 “100 PC licenses” to the Navy. J.A. 7001.
     Though the 2008 Navy Purchase Order specified ver-
 sion 7.038 of BS Contact VRML and X3D, 1 in May 2009,
 Bitmanagement delivered a newer version, BS Contact Geo
 version 7.204. A year later, in 2010, the Navy had twenty
 remaining licenses from the 2008 Purchase Order that it
 had not yet deployed to Navy computers. In September
 2010, Bitmanagement agreed to upgrade the undeployed
 licenses to version 7.215 of BS Contact Geo for an addi-
 tional $125 per license.
     D. 2012 Negotiations, Purchase, and Deployment
     The Navy, Planet 9, and Bitmanagement began dis-
 cussing another license purchase in April 2011. Planet 9
 relayed to Bitmanagement that the Navy was experiencing
 issues managing their individual seat licenses and had
 asked to “revisit the discussion of a floating license
 scheme.” J.A. 5769. On April 21, 2011, Bitmanagement
 responded and proposed three “license tracking” options:
     Option 1: No limitation in the software at all. Li-
     censes can be tracked by a word document or table
     stating the computer and/or person using it. Dis-
     tribution to the Navy only.
     Option 2: BS Contact client tracking: BS Contact
     checks at startup how many other BS Contact cli-
     ents are running in the same sub-domain. If too
     many BS Contact client will notify the user.
     Option 3: Server tracking: A 24/7 server in the do-
     main/sub-domain maintains a counter. If the

     1 BS Contact VRML and X3D was a predecessor to
 BS Contact Geo version 8.001. J.A. 10059 ¶ 47.
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES           7

     number of BS Contact clients is reached the BS
     Contact client requesting will notify the user.
 J.A. 5767–68.
     Viana followed up with Colleen in June 2011, indicat-
 ing an interest in Option 3. Viana explained that NAVFAC
 had an existing floating license server tracking application,
 Flexera, that could be used to track BS Contact Geo with
 no alterations to the program. Flexera is a server-based
 program used to limit the number of simultaneous users of
 a “Flexera enabled”—or “FlexWrapped”—software based
 on the number of available licenses. When a user opens a
 FlexWrapped program, the program alerts the Flexera
 tracking server that the program is in use.              The
 FlexWrapped program sends a similar alert when the pro-
 gram is no longer in use. The Flexera license manager thus
 limits the number of users of FlexWrapped software to the
 number of licenses that a user owns.
     On June 8, 2011, Colleen relayed the Navy’s preference
 for Option 3 to Bitmanagement. Colleen noted that he had
 “an order from [the Navy] for 20 seats of BS Contact” and
 proposed, “try[ing] these 20 seats on the floating license
 server to see how they work.” J.A. 5766. Schickel re-
 sponded on June 10, 2011, “[l]et’s go for the floating license
 server approach.” J.A. 5765.
     On November 4, 2011, Viana informed Schickel that
 the Navy wanted to deploy the 20 undeployed licenses from
 the 2008 Purchase Order but wanted “to centrally manage
 the utilization of the 20 licenses . . . within the Navy’s
 [Navy Marine Corps Intranet (“NMCI”)] network” in order
 to “better understand user demand . . . and manage the
 growth of future licenses.” J.A. 7046. Viana advised
 Schickel that the Navy was preparing an agreement be-
 tween NAVFAC and Bitmanagement “formalizing
 [NAVFAC’s] approach to manage and deploy the licenses
 from the server rather than individual seats.” J.A. 7046–
 47. Viana indicated that, with this approach, he was
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 8         BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 “extremely confident” that purchases of upgrades and ad-
 ditional licenses would be justified. J.A. 7047. Schickel
 responded, “thank you very much for your e-mail . . . and
 great news. We are looking forward to receiv[ing] your
 draft agreement.” J.A. 7046.
    In a November 9, 2011 email, Viana explained to
 Schickel the Navy’s plans with respect to deploying BS
 Contact Geo:
     My strategy is to get the current licenses of BS Con-
     tact Geo version 7.215 deployed with the server li-
     cense management software. Then we will push it
     out to several of the NMCI realms to begin tracking
     the usage and demand signal of the 20 license keys.
     . . . [T]hen we (Navy) will issue a purchase order
     through one of our contracting mechanisms to pro-
     cure X number of licenses of the new version.
 J.A. 7046. Viana emailed Koerfer on November 24, 2011,
 offering a similar explanation:
     Wanted to make sure we have the same under-
     standing of our planned approach for BS Contact
     Geo with regards to the user’s agreement. We cur-
     rently have 20 PC licenses of BS Contact Geo ver-
     sion 7.215 which we have not deployed and are
     requesting to manage from our Navy server. This
     will be accomplished by utilizing the software ap-
     plication AdminStudio by Flexera in conjunction
     with BS Contact Geo from our server. This will al-
     low us to track the use of the 20 licenses across a
     broad spectrum of the NMCI realm (versus having
     those 20 licenses mapped to individual PCs). Once
     we have successfully implemented this approach,
     we will be able to document (through the Ad-
     minStudio) the usage of the 20 BS Contact Geo li-
     censes and enable us to justify the purchase of
     additional BS Contact Geo licenses in the future.
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 J.A. 5832 (emphasis added). Koerfer responded on behalf
 of Bitmanagement “[t]hat is our understanding as well”
 and that “[t]he user agreement in princip[le] covers your
 approach from our point of view.” J.A. 5831. The Navy and
 Bitmanagement thereafter exchanged draft vendor pro-
 posals, but none was executed.
     On January 16, 2012, Planet 9 confirmed the agreed
 upon licensing scheme with Bitmanagement, stating that
 the 20 undeployed existing licenses, as well as 30 new li-
 censes, of BS Contact Geo would be available under “the
 Navy’s floating license system.” J.A. 5856. Koerfer replied
 “ok.” Id.
     On January 20, 2012, after reducing the number of new
 licenses to account for Planet 9’s reseller margin, Planet 9
 sent Viana a license proposal including the 20 undeployed
 licenses from the 2008 Navy Purchase Order and 18 new
 copies of BS Contact Geo 7.215. On May 21, 2012, the Navy
 submitted a purchase order to Planet 9 (“the 2012 Navy
 Purchase Order”) for 18 BS Contact Geo Version 7.215 Li-
 censes “enabled by NAVFAC using Flexera Software’s
 FlexWrap utility” for a total cost of $5,490. J.A. 7083. The
 2012 Navy Purchase order also included a contract line
 item for 75 hours of technical support. J.A. 7084.
     On June 13, 2012, after execution of the 2012 Navy
 Purchase Order, Bitmanagement delivered to NAVFAC a
 “no cost” modification in the form of BS Contact Geo ver-
 sion 8.001, rather than version 7.215, “under the same
 terms of the recently awarded BS Contact Geo license pro-
 curement contract with NAVFAC.” J.A. 7181. Bitmanage-
 ment delivered version 8.001 with “a silent installer
 capability as requested for bulk installation.” Id.
     Following delivery of BS Contact Geo version 8.001,
 Bitmanagement sent Planet 9 a written reseller agreement
 (“2012 Reseller Agreement”). The agreement authorized
 Planet 9 to resell 18 PC-licenses of BS Contact Geo version
 7.215 or version 8.001 to NAVFAC. Planet 9 objected to
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 the initial document’s discussion of Planet 9 as an “end
 user” rather than a “reseller.” In September 2012, Bitman-
 agement sent a substantively identical agreement revising
 the language. The 2012 Reseller Agreement was never
 signed. It is undisputed, however, that Planet 9 and Bit-
 management reached an agreement.
     On July 3, 2012, the Navy contacted Bitmanagement
 about the Navy’s inability to use more than one license at
 a time and an incompatibility between the installation file
 and the Flexera software. Bitmanagement delivered a new
 installation file on July 23, 2012, so that the software could
 be FlexWrapped. It billed its time to modify the file pursu-
 ant to the 2012 Navy Purchase Order.
     Over the next year, the Navy regularly updated Bit-
 management on its progress toward broad deployment on
 BS Contact Geo. See, e.g., J.A 5914 (Viana to Schickel and
 Colleen: “Wanted [to] provide you an update of our efforts
 to deploy BS Contact Geo within NMCI.”); J.A. 5917 (Viana
 to Schickel and Koerfer: “[W]e are working necessary pro-
 cesses to enable the deployment of BS Contact Geo across
 all Navy computers.”); J.A. 5983 (Viana to Schickel and
 Koerfer: “Once certified [the Navy] will push the applica-
 tion to all 350,000+ NMCI computers and we will begin
 monitoring and reporting the usage through the Flex Li-
 cense Manager.”). Bitmanagement’s responses to these
 messages were generally positive and encouraging. J.A.
 5917 (Schickel to Viana: “[T]hank you for your encouraging
 e-mail.”); J.A. 5966 (Schickel to Viana: “[T]hanks for the
 good news!”).
     The Navy began widespread deployment of BS Contact
 Geo version 8.001 to the NMCI network in July 2013. The
 program remained on NMCI computers through at least
 September 2016. During that time, Flexera “did not mon-
 itor or control the use of the BS Contact Geo plugin,” i.e.,
 the OCX component of the software was not FlexWrapped.
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 BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES          11

 J.A. 10067–68 ¶ 95. The Navy did not purchase any addi-
 tional copies of BS Contact Geo.
                E. Claims Court Proceedings
      On July 6, 2016, Bitmanagement filed an application
 to register BS Contact Geo version 8.001 with the United
 States Copyright Office. On July 15, 2016, Bitmanagement
 filed suit against the government in the Claims Court al-
 leging that the Navy infringed its copyright.
     The Claims Court held a six-day bench trial from April
 22–29, 2019. Following post-trial briefing, in a September
 9, 2019, opinion, the court held that the government was
 not liable for copyright infringement. Specifically, the
 Claims Court found: (1) Bitmanagement made a prima fa-
 cie case of copyright infringement; and (2) no express
 agreement granted the Navy a license to install BS Contact
 Geo on all of the Navy’s computers; but (3) the Navy had
 met its burden to show that Bitmanagement authorized
 the Navy to copy BS Contact Geo version 8.001 across the
 Navy’s NMCI network of computers. Bitmanagement,
 144 Fed. Cl. at 655–56.
      The Claims Court’s conclusions as to the first two is-
 sues are not challenged on appeal. As to the third issue,
 the court found, based on the above recited facts, “it is clear
 that Bitmanagement authorized the Navy to deploy—i.e.,
 copy—BS Contact Geo version 8.001 across the Navy’s
 NMCI network.” Id. at 656. The Claims Court explained
 that Bitmanagement always understood the Navy’s desire
 for a product suitable for broad deployment and consist-
 ently assisted the Navy in achieving that goal by, for exam-
 ple, providing a license file that was not PC-specific,
 providing a silent installer, and modifying the installation
 file for Flexera compatibility. Id. The Claims Court also
 considered the exchanges between the Navy and Bitman-
 agement relating to a “floating license server approach”
 and, thereafter, the various updates from the Navy on its
 progress toward broad deployment. Id. at 656–57. The
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 12         BITMANAGEMENT SOFTWARE GMBH        v. UNITED STATES

 Claims Court concluded, “[t]ogether, these interactions un-
 equivocally show that Bitmanagement was not only aware
 that the Navy planned to install BS Contact Geo ‘across a
 broad spectrum of the NMCI realm’ but also that Bitman-
 agement authorized such installations.” Id. at 657.
     The court further found that Bitmanagement agreed to
 this scheme “because Flexera would limit the number of
 simultaneous users of BS Contact Geo, regardless of how
 many copies were installed on Navy computers.” Id. at 648.
 It reasoned that Flexera would render the actual number
 of copies irrelevant and provide the Navy with a necessary
 tool for determining how many additional licenses to pur-
 chase. Id.
      The Claims Court entered judgment in favor of the gov-
 ernment on September 9, 2019. Bitmanagement timely
 filed a notice of appeal. We have jurisdiction to hear ap-
 peals from final decisions of the Claims Court pursuant to
 28 U.S.C. § 1295(a)(3).
                         II. DISCUSSION
     On appeal from the Claims Court, we review legal con-
 clusions de novo and factual findings for clear error. Gay-
 lord v. United States, 678 F.3d 1339, 1342 (Fed. Cir. 2012).
 “A finding is ‘clearly erroneous’ when although there is ev-
 idence to support it, the reviewing court on the entire evi-
 dence is left with the definite and firm conviction that a
 mistake has been committed.” United States v. U.S. Gyp-
 sum Co., 333 U.S. 364, 395 (1948). “Where the district
 court’s account of the evidence is plausible in light of the
 record viewed in its entirety, the court of appeals may not
 reverse it even though convinced that had it been sitting as
 the trier of fact, it would have weighed the evidence differ-
 ently.” June Med. Servs. LLC v. Russo, 140 S. Ct.
 2103, 2121 (2020) (internal quotation marks omitted).
 Thus, “[a] finding that is ‘plausible’ in light of the full rec-
 ord—even if another is equally or more so—must govern.”
 Cooper v. Harris, 137 S. Ct. 1455, 1465 (2017).
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     Bitmanagement raises three challenges to the Claims
 Court’s decision. It argues: (1) the Claims Court’s finding
 of an implied-in-fact license 2 is not legally supported or fac-
 tually plausible; (2) an implied-in-fact license between Bit-
 management and the Navy is precluded as a matter of law;
 and (3) regardless of any implied-in-fact license, the
 Claims Court erred by failing to address whether the Navy
 complied with the Flexera condition of the license. We ad-
 dress each argument in turn.
    A. The Claims Court’s Finding of an Implied-in-Fact
    License Is Legally Supported and Factually Plausible
     Copyright licenses are a type of contract and, therefore,
 governed by common law contracting principles. See Dep’t
 of Parks & Recreation v. Bazaar Del Mundo Inc., 448 F.3d
 1118, 1130 (9th Cir. 2006) (“Licenses are contracts ‘gov-
 erned by ordinary principles of . . . contract law.’” (quoting
 Power Lift, Inc. v. Weatherford Nipple-Up Sys., Inc.,
 871 F.2d 1082, 1085 (Fed. Cir. 1989))). Thus, as with im-
 plied-in-fact contracts, an implied-in-fact license “is one
 founded upon a meeting of the minds, which, although not
 embodied in an express contract, is inferred, as a fact, from
 conduct of the parties showing, in the light of the surround-
 ing circumstances, their tacit understanding.” City of Cin-
 cinnati v. United States, 153 F.3d 1375, 1377 (Fed. Cir.
 1998) (internal quotation marks omitted). Finding such a
 license ordinarily requires finding: “1) mutuality of intent
 to contract; 2) consideration; and, 3) lack of ambiguity in
 offer and acceptance.” City of El Centro v. United States,
 922 F.2d 816, 820 (Fed. Cir. 1990).              An implied

     2   The Claims Court expressly found that the Navy’s
 mass download of BS Contact Geo was “authorized.” The
 parties treat the court’s finding as one of an implied-in-fact
 contract or license between Bitmanagement and the Navy.
 We agree with the parties’ characterization of the court’s
 decision.
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 nonexclusive copyright license may be found, however, in
 the absence of consideration. See, e.g., Avtec Sys., Inc. v.
 Peiffer, 21 F.3d 568, 574 n.12 (4th Cir. 1994) (“[A]n implied
 license is necessarily nonexclusive and revocable absent
 consideration.”); 3 Melville B. Nimmer & David Nimmer,
 Nimmer on Copyright § 10.03[A][8] (2020) (“[N]o consider-
 ation is necessary under federal law to effectuate a transfer
 of copyright ownership that does not purport to require
 consideration. Note, however, that consideration is neces-
 sary to render a nonexclusive license irrevocable.”).
      Bitmanagement argues that the Claims Court failed to
 address the prevailing legal test for finding an implied-in-
 fact license and, instead, improperly engaged in a general-
 ized assessment of the parties’ interactions. Appellant’s
 Br. 34–35. Specifically, Bitmanagement argues that the
 Claims Court was required to apply the Ninth Circuit’s “Ef-
 fects factors.” Bitmanagement reads the law too narrowly.
      Bitmanagement is correct that, in the copyright con-
 text, the Effects factors, derived from Effects Associates v.
 Cohen, 908 F.2d 555, 558–59 (9th Cir. 1990), are often used
 to determine whether an implied nonexclusive license may
 be found. The three factors courts consider are whether
 “(1) a person (the licensee) requests the creation of a work,
 (2) the creator (the licensor) makes that particular work
 and delivers it to the licensee who requested it, and (3) the
 licensor intends that the licensee copy and distribute his
 work.” Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284
 F.3d 505, 514 (4th Cir. 2002) (quoting I.A.E., Inc. v. Shaver,
 74 F.3d 768, 776 (7th Cir. 1996)). The Effects factors are
 not the exclusive inquiry used by the regional circuits, how-
 ever. See 3 Nimmer & Nimmer, supra, § 10.03[A][7] (“Alt-
 hough those three factors, when they exist, may lead to the
 conclusion that there is a valid implied license, . . . other
 tests . . . reveal how questionable it is for other courts to
 transmute those three factors into the only applicable
 test.”). Accordingly, as the Fifth Circuit has explained,
 “[w]hen the totality of the parties’ conduct indicates an
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 intent to grant such permission, the result is a legal non-
 exclusive license.” Lulirama Ltd. v. Axcess Broad. Servs.,
 Inc., 128 F.3d 872, 879 (5th Cir. 1997) (quoting 3 Nimmer
 & Nimmer, supra, § 10.03[A][7]); see also Baisden v. I’m
 Ready Prods., Inc., 693 F.3d 491, 501 (5th Cir. 2012) (the
 existence of an implied license depends on the totality of
 the parties’ conduct). We have similarly, albeit in the pa-
 tent context, emphasized the relevance of parties’ entire
 course of conduct to the determination of whether an im-
 plied-in-fact license exists. See Wang Labs., Inc. v.
 Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1580 (Fed. Cir.
 1997) (holding that the “entire course of conduct” is rele-
 vant to finding an implied patent license).
      The Claims Court did not legally err by considering Bit-
 management and the Navy’s entire course of conduct to
 find an implied-in-fact license. The Effects factors, which
 were first articulated in the context of movie footage cre-
 ated for incorporation into a specific film, are simply too
 remote from the facts of this case to be useful. See Effects,
 908 F.2d at 558–59. In cases such as this one, where the
 copyrighted work at issue is a commercially available soft-
 ware product rather than one made for a specific end-user,
 it is appropriate to consider the totality of the parties’
 course of conduct to decide whether an implied-in-fact li-
 cense exists.
      Bitmanagement further argues, regardless of the ap-
 plicable test, that the record does not support finding a
 “meeting of the minds.” Appellant’s Br. 41–44. The gov-
 ernment responds that there is no “meeting of the minds”
 requirement for finding an implied-in-fact license. Appel-
 lee’s Br. 37. While we reject the government’s assertion
 that a meeting of the minds is irrelevant, we hold that the
 Claims Court did not clearly err in finding a meeting of the
 minds on the record before it.
    As noted, an implied-in-fact license may be found only
 “upon a meeting of the minds” that “is inferred, as a fact,
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 16        BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 from conduct of the parties showing, in the light of the sur-
 rounding circumstances, their tacit understanding.” City
 of Cincinnati, 153 F.3d at 1377 (quoting Balt. & O.R. Co. v.
 United States, 261 U.S. 592, 597 (1923)). The government’s
 contention that this requirement does not exist is, there-
 fore, incorrect.
     The record, however, supports the plausibility of the
 Claims Court’s finding of a meeting of the minds. As dis-
 cussed above, the Claims Court considered numerous email
 exchanges between Bitmanagement and the Navy. Based
 on those communications, the Claims Court found: (1) Bit-
 management understood from the beginning that the Navy
 desired to broadly deploy the software; (2) Bitmanagement
 agreed to a “floating license server approach” that would
 control the use of individual copies of the program installed
 on Navy computers; (3) the Navy informed Bitmanagement
 on several occasions of its plan to broadly deploy the pro-
 gram; and (4) Bitmanagement confirmed that it under-
 stood the plan. Bitmanagement, 144 Fed. Cl. at 656–57.
 Together, the court concluded, “these interactions unequiv-
 ocally show that Bitmanagement was not only aware that
 the Navy planned to install BS Contact Geo ‘across a broad
 spectrum of the NMCI realm’ but also that Bitmanagement
 authorized such installations.” Id. at 657.
      Though Bitmanagement would have us read the com-
 munications and testimony differently to reach a different
 conclusion, and though such a reading is certainly sup-
 ported by the record, that is not our place when reviewing
 factual findings for clear error. The Claims Court’s finding
 of a meeting of the minds is a plausible conclusion and thus
 is not clearly erroneous. We must, therefore, defer to the
 Claims Court’s finding.
     During oral argument, counsel for the government con-
 tended that Bitmanagement and the Navy made a “mutual
 mistake” as to the compatibility of Flexera with BS Contact
 Geo.    See Oral Arg. at 16:46–17:13, available at
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES          17

 http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20-
 1139_11032020.mp3. This admission raises for us grave
 doubts as to the Claims Court’s ultimate finding of a meet-
 ing of the minds. We are dubious whether a meeting of the
 minds is possible when the parties involved so clearly did
 not understand the technology. Even weighing this in the
 balance, however, the Claims Court’s finding remains plau-
 sible. And, as discussed below, our affirmance of the
 Claims Court’s factual finding is not dispositive because
 the Navy breached a condition precedent of any implied-in-
 fact license and thus infringed Bitmanagement’s copyright.
     Because we must defer to the Claims Court’s finding of
 a meeting of the minds, we affirm the Claims Court’s find-
 ing of an implied-in-fact license between the Navy and Bit-
 management.
   B. The Implied-in-Fact License Between the Navy and
            Bitmanagement Was Not Precluded
     Bitmanagement further argues that the express con-
 tracts between the Navy and Planet 9, and between Planet
 9 and Bitmanagement, precluded the Claims Court’s find-
 ing of an implied-in-fact license. On the facts of this case,
 we disagree.
      It is well established that “the existence of an express
 contract precludes the existence of an implied-in-fact con-
 tract dealing with the same subject matter, unless the im-
 plied contract is entirely unrelated to the express contract.”
 Seh Ahn Lee v. United States, 895 F.3d 1363, 1370
 (Fed. Cir. 2018) (quoting Bank of Guam v. United States,
 578 F.3d 1318, 1329 (Fed. Cir. 2009)); see also Klebe v.
 United States, 263 U.S. 188, 192 (1923) (“A contract im-
 plied in fact is one inferred from the circumstances or acts
 of the parties; but an express contract speaks for itself and
 leaves no place for implications.”). The preclusion rule,
 however, is less clearly applicable when the express con-
 tracts are not directly between the parties to the implied-
 in-fact contract. Peter v. United States, 6 Cl. Ct. 768, 780
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 18         BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 (1984) (“The rule that the existence of an express contract
 preempts an implied contract has full effect only when the
 parties to both contracts are the same.”). When such a dis-
 connect exists, a court should apply the preclusion rule
 only when the totality of the specific facts and circum-
 stances shows that such an agreement was precluded by
 the first contract. Cf. Ground Improvement Techs., Inc. v.
 United States, 618 F. App’x 1020, 1030 (Fed. Cir. 2015); see
 also Normandy Apartments, Ltd. v. United States, 633 F.
 App’x 933, 940 (Fed. Cir. 2015).
       Application of the preclusion rule was not warranted in
 this case for three primary reasons. First, Bitmanagement
 and the Navy were intentional in their decision not to enter
 into an express contractual relationship. As to the express
 agreements, the parties stipulated that “[t]here is no priv-
 ity of contract between the United States and Bitmanage-
 ment.” J.A. 10057 ¶ 34. Instead, Bitmanagement and the
 Navy chose to use intermediary Planet 9 to conduct busi-
 ness. J.A. 10057 ¶ 35. Planet 9’s Finder’s Fee Agreement
 with Bitmanagement clarified that Planet 9 was “neither
 entitled to represent [Bitmanagement] in any legal or other
 transaction nor to make any binding or nonbinding state-
 ment o[n] behalf of [Bitmanagement].” J.A. 10057–58 ¶ 36.
 Second, the topic of the implied-in-fact license in this case,
 i.e., the license to copy BS Contact Geo onto all Navy com-
 puters, is not covered by any express agreement—in fact,
 no express contract mentions “copies.” And third, the ex-
 press contracts are ambiguous as to how the parties to
 those contracts understood Flexera would be used. This is
 all to say that, in this case, the express contracts do not
 capture or reflect the discussions that occurred between
 the Navy and Bitmanagement directly. Nor could they, as
 Planet 9 was prevented from binding Bitmanagement in
 any way. It is clear, however, that the Navy and Bitman-
 agement came to a separate understanding, not reflected
 in the express contracts, which would be unfair to preclude.
 Compare J.A. 5832 (Viana confirming Bitmanagement’s
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 BITMANAGEMENT SOFTWARE GMBH        v. UNITED STATES          19

 understanding of the Navy’s plan to use Flexera “to track
 the use of the 20 licenses across a broad spectrum of the
 NMCI realm (versus having those 20 licenses mapped to
 individual PCs)”), with J.A. 5831 (Koerfer agreeing, “[t]hat
 is our understanding as well. The user agreement in prin-
 cip[le] covers your approach from our point of view.”). For
 these reasons, we decline to apply the preclusion rule on
 this record.
  C. The Navy Failed to Comply with the Flexera Condition
               of the Implied-in-Fact License
     Bitmanagement argues that, even if the government
 establishes that an implied-in-fact license could have cov-
 ered the Navy’s actions, the Navy nevertheless committed
 copyright infringement by failing to comply with a condi-
 tion of the license. Appellant’s Br. 45–48. Specifically, Bit-
 management contends that use of Flexera was a condition
 precedent to the Navy copying BS Contact Geo onto all
 Navy computers. Appellant’s Reply Br. 24–30. The gov-
 ernment responds that Flexera was merely a covenant
 such that any grievance raised by Bitmanagement neces-
 sarily sounds in contract, a claim that Bitmanagement
 never asserted. Appellee’s Br. 52–54. We agree with Bit-
 management.
      Normally, a copyright owner who grants a license to his
 copyrighted material has waived his right to sue the licen-
 see for copyright infringement and must instead pursue a
 claim for breach of contract.           Jacobsen v. Katzer,
 535 F.3d 1373, 1380 (Fed. Cir. 2008). “If, however, a li-
 cense is limited in scope and the licensee acts outside the
 scope, the licensor can bring an action for copyright in-
 fringement.” Id. Whether a licensee acts outside the scope
 of a contract by failing to comply with a term of the parties’
 agreement turns on whether that term is a condition that
 limits the scope of the license or is merely a covenant. Id.;
 see also 3 Nimmer & Nimmer, supra, § 10.15[A][2] (“If the
 grantee’s violation consists of a failure to satisfy a condition
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 20        BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 to the grant (as distinguished from a breach of a covenant),
 it follows that the rights dependent on satisfaction of that
 condition have not been effectively granted, rendering any
 use by the grantee without authority from the grantor. The
 legal consequence is that the grantee’s conduct may consti-
 tute copyright infringement.”). Terms of a license or con-
 tract are presumed to be covenants, rather than conditions,
 unless it is clear that a condition precedent was intended.
 See, e.g., Mularz v. Greater Park City Co., 623 F.2d 139, 142
 (10th Cir. 1980) (“Where the intention or meaning of a con-
 tract is in question as to whether it should be construed as
 a covenant, or, in the alternative, a condition precedent,
 the tendency of the courts is to construe it as a covenant or
 a promise rather than a condition unless it is plain that a
 condition precedent was intended.”); Graham v. James, 144
 F.3d 229, 237 (2d Cir. 1998).
     As noted, the Claims Court stopped short of reaching
 this issue. The court’s findings and the undisputed factual
 record are nevertheless sufficient to allow resolution as a
 matter of law.
     Though the terms of an implied license are by defini-
 tion not contained in a written instrument, the Flexera
 term of the implied license between Bitmanagement and
 the Navy can readily be understood from the parties’ entire
 course of dealings. The Claims Court did just that when it
 found that “Bitmanagement agreed to [the] licensing
 scheme because Flexera would limit the number of simul-
 taneous users of BS Contact Geo, regardless of how many
 copies were installed on Navy computers.” Bitmanage-
 ment, 144 Fed. Cl. at 658 (first emphasis added). That is,
 the court found that Flexera was a condition of the implied-
 in-fact license between Bitmanagement and the Navy.
 Flexera would function by limiting, from the time of copy-
 ing, the number of simultaneous users of the program.
 This condition rendered reasonable the otherwise objec-
 tively unreasonable decision of Bitmanagement to allow
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES          21

 the Navy to make unlimited copies of its commercial prod-
 uct.
      We agree with the court’s assessment. This is one of
 those rare circumstances where the record as a whole re-
 flects that the only feasible explanation for Bitmanage-
 ment allowing mass copying of its software, free of charge,
 was the use of Flexera at the time of copying. Thus, the
 Flexera term was clearly a condition rather than merely a
 covenant. Unlike payment, which is typically considered a
 covenant, the use of Flexera at the time of copying was crit-
 ical to the basic functioning of the deal. The timing of Flex-
 era was key because the Navy’s tracking of BS Contact Geo
 users was intended to establish how many additional li-
 censes the Navy would purchase. Without tracking, the
 Navy would have no basis to purchase more licenses and,
 consequently, Bitmanagement would have had no reason
 to enter into the implied-in-fact license. Unlike payment,
 which can feasibly come at any time after contract perfor-
 mance, Flexera was only useful if it could track, from the
 beginning, the number of Navy users.
     The Claims Court further found, and it is undisputed,
 that a copy of the BS Contact Geo software consists of “both
 a desktop executable file (EXE version) and a web browser
 plugin file (OCX version).” Id. at 648 (citing J.A. 10054
 ¶ 18). This is significant because, as the parties stipulated,
 Flexera “did not monitor or control the use of the BS Con-
 tact Geo plugin.” J.A. 10067–68 ¶ 95. In other words, the
 OCX component of the software was at no point properly
 monitored by Flexera. The extent to which the EXE ver-
 sion was monitored by Flexera appears to be disputed.
 That is, however, of no moment to the analysis because a
 condition of the implied-in-fact license was that the copies
 of BS Contact Geo be monitored by Flexera. That condition
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 22        BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 could not have been met by monitoring only half of each
 copy. 3
     The Claims Court further found that Bitmanagement
 established a prima facie case of copyright infringement
 and that no express agreement authorized the Navy to copy
 BS Contact Geo onto all Navy computers. Thus, while the
 Navy had an implied-in-fact license to copy BS Contact Geo
 onto its computers, the Navy’s failure to abide by the Flex-
 era condition of that license renders its copying of the pro-
 gram copyright infringement.
                      III. CONCLUSION
     Though the Claims Court’s finding of an implied-in-fact
 license is legally supported and factually plausible, the
 Navy’s failure to comply with the Flexera condition of the
 license renders the Navy’s copying outside the scope of that
 license.     Such unauthorized copying is copyright

      3   The government briefly argues that it was not the
 Navy’s responsibility to ensure Flexera compatibility and,
 thus, it was not responsible for any failure to comply with
 the condition. Appellee’s Br. 51 (“Bitmanagement cannot
 assert a breach when it knew of the Flexera-enabled re-
 quirement but failed to provide software that could
 properly enable the Flexera feature.”). Any potential fail-
 ure of Bitmanagement to deliver a product that could be
 FlexWrapped does not, however, excuse the Navy making
 copies when, as a matter of fact, the program was not being
 monitored by Flexera. The Navy alone was in a position to
 verify compatibility and ensure that the condition was met.
 And, if it is true that the condition was impossible to meet,
 that simply means the Navy could not have lawfully made
 the copies under any set of facts.
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES         23

 infringement. 4 We therefore vacate the Claims Court’s
 judgment and remand for a determination of damages. 5

     4     We do not disturb the Claims Court’s uncontested
 finding that at least 38 copies of BS Contact Geo 8.001 were
 authorized based on 38 remaining licenses from the 2012
 Navy Purchase Order. Bitmanagement, 144 Fed. Cl. at
 658 n.10.
      5    Because Bitmanagement’s action is against the
 government, it is entitled only to “reasonable and entire
 compensation as damages . . ., including the minimum stat-
 utory damages as set forth in section 504(c) of title 17,
 United States Code.” 28 U.S.C. § 1498(b). This amount
 may not include non-compensatory or punitive damages.
 Gaylord v. United States, 678 F.3d 1339, 1343 (Fed. Cir.
 2012) (“Gaylord I”). Contrary to Bitmanagement’s argu-
 ment, see J.A. 10002 ¶ 5, it is not entitled to recover the
 cost of a seat license for each installation. If Bitmanage-
 ment chooses not to pursue statutory damages, the proper
 measure of damages shall be determined by the Navy’s ac-
 tual usage of BS Contact Geo in excess of the limited usage
 contemplated by the parties’ implied license. That analysis
 should take the form of a hypothetical negotiation. See
 Gaylord v. United States, 777 F.3d 1363, 1368–72 (Fed. Cir.
 2015); Gaylord I, 678 F.3d at 1342–45. As the party who
 breached the Flexera requirement in the implied license,
 the Navy bears the burden of proving its actual usage of
 the BS Contact Geo software and the extent to which any
 of it fell within the bounds of any existing license. See Re-
 statement (Second) of Contracts § 352 cmt. a (Am. L. Inst.
 1981) (“Doubts [about the extent of damages] are generally
 resolved against the party in breach.”); see also Energy
 Cap. Corp. v. United States, 302 F.3d 1314, 1326–27 (Fed.
 Cir. 2002) (noting that uncertainty as to amount of dam-
 ages does not preclude recovery and that the “risk of
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 24        BITMANAGEMENT SOFTWARE GMBH     v. UNITED STATES

                VACATED AND REMANDED
                          COSTS
      Costs to Bitmanagement.

 uncertainty must fall on the defendant whose wrongful
 conduct caused the damages”).
Case: 20-1139    Document: 51      Page: 25   Filed: 02/25/2021

    United States Court of Appeals
        for the Federal Circuit
                  ______________________

        BITMANAGEMENT SOFTWARE GMBH,
                Plaintiff-Appellant

                              v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2020-1139
                  ______________________

    Appeal from the United States Court of Federal Claims
 in No. 1:16-cv-00840-EJD, Senior Judge Edward J.
 Damich.
                 ______________________

 NEWMAN, Circuit Judge, concurring.
     I concur in the judgment of copyright infringement,
 and join the court’s order of remand for determination of
 just compensation. However, I do not share the court’s rea-
 soning that there was an implied license from Bitmanage-
 ment – although I agree that if such license existed, it was
 breached by the Navy.
     I discern no license, implied or otherwise, for the Navy
 to make hundreds of thousands of copies of Bitmanage-
 ment’s commercial software product “BS Contact Geo.”
 The Navy made the copies using Bitmanagement’s keys
 and installation file, and admitted that it distributed the
 copies throughout the Navy, although without authoriza-
 tion, without license, and without payment. The Navy has
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 2          BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 not justified this improper copying; it violates the terms of
 its purchases of Bitmanagement’s product, and violates
 Bitmanagement’s copyright.
                         DISCUSSION
     There is no implied license for this massive
     copying
     The Navy purchased 119 copies of the BS Contact Geo
 software system over the years 2006–2012, and received a
 written seat license for each purchased copy. 1 The Court
 of Federal Claims received undisputed evidence that the
 Navy made over 429,604 copies of the BS Contact Geo soft-
 ware. Fed. Cl. Op. 2 at 655.
     Each purchase of the BS Contact Geo system, in 2006,
 2008, and 2012, was accompanied by a written agreement
 granting a license for each of the 119 copies. Fed. Cl. Op.
 at 649, 650, 652. The agreements recite explicit “Product
 Controls,” viz., “The source code of the Product is protected
 by copyright and constitutes a business secret of the Licen-
 sor;” J.A. 5087, 5094, 6998, 7004, 7149. “Licensee is not
 entitled to decompile, alter, reverse assemble or otherwise
 reverse engineer the Products” and the “Licensee agrees
 not to re-market, assign, sublicense, transfer, pledge, lease,
 publish, rent or share Licensee’s rights with any third

     1    The Navy’s witness Alex Viana, Deputy Program
 Manager, explained that a “seat license,” also called a “PC
 license,” authorizes the purchaser of software to use the
 software on one computer. J.A. 10058–59; J.A.7153. He
 testified that “a seat is an individual computer” and “the
 sale of 10 seat licenses would permit the buyer to install
 the purchased software onto 10 computers.” J.A.1963. It
 is agreed that the Navy purchased a total of 119 seat li-
 censes during 2006 to 2012.
     2    Bitmanagement Software GmbH v. United States,
 144 Fed. Cl. 646 (Fed. Cl. 2019) (“Fed. Cl. Op.”).
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 BITMANAGEMENT SOFTWARE GMBH      v. UNITED STATES          3

 party without the prior written consent of the Licensor.”
 Id. As the majority opinion recognizes, the Navy assured
 Bitmanagement that the Navy’s Flexera system would
 keep track of usage. Maj. Op. at 19. This Flexera require-
 ment is memorialized in the May 21, 2012 Purchase Agree-
 ment between Navy Acquisitions and Planet 9 Systems for
 18 copies of the BS Contact Geo system “Enabled by
 NAVFAC using Flexera.” J.A.7083.
      The purchases of the 119 copies of the BS Contact Geo
 software, from 2006 to 2012, were implemented by Navy
 Purchase Orders, with Planet 9 Systems serving as domes-
 tic reseller, at the Navy’s request, for these purchases from
 a foreign supplier. See, e.g., Software License Agreement
 between Bitmanagement and Planet 9 (Mar. 27, 2008)
 (“Purpose of Use … Licensee is entitled to resell the li-
 censes to FISC San Diego (NAVY Purchasing) for their re-
 spective use as per this agreement.”) J.A. 7001.
     The Navy admitted in trial testimony that there was
 no understanding whereby Bitmanagement authorized or
 intended to authorize the Navy to conduct massive free
 copying of Bitmanagement’s copyrighted BS Contact Geo
 software system. J.A. 2022–23. The Court of Federal
 Claims erred in fact and in law, in ruling that there was
 such an understanding resulting in the Navy having an im-
 plied license to make hundreds of thousands of copies of the
 BS Contact Geo software. Fed. Cl. Op. at 659.
     An implied license “is one founded upon a meeting of
 the minds, which, although not embodied in an express
 contract, is inferred, as a fact, from conduct of the parties
 showing, in the light of the surrounding circumstances,
 their tacit understanding.” City of Cincinnati v. United
 States, 153 F.3d 1375, 1377 (Fed. Cir. 1998) (quotation
 marks and citation omitted). Further, “[t]he general re-
 quirements for a binding contract with the United States
 are identical for both express and implied contracts.”
 Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325
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 4         BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 (Fed. Cir. 1997). An implied license requires: “1) mutuality
 of intent to contract; 2) consideration; and 3) lack of ambi-
 guity in offer and acceptance.” City of El Centro v. United
 States, 922 F.2d 816, 820 (Fed. Cir. 1990). Failure of any
 of these conditions precludes the existence of a license,
 whether express or implied; the Court of Federal Claims
 erred in finding an implied license, for there plainly was no
 mutuality of intent, no consideration, and no lack of ambi-
 guity.
     The government offered no contrary evidence. Rather,
 the record shows that both the Navy and Bitmanagement
 expected that any arrangement for enlarged Navy use
 would be the subject of future purchase and license agree-
 ments, as was the consistent pattern.
     The cases cited by the government do not support the
 copying that the government now defends. The legal issues
 here are not resolved as the government argues in the cited
 cases. For example, the government cites Associated Press
 v. Meltwater U.S. Holdings, Inc., 931 F. Supp. 2d 537, 562
 (S.D.N.Y. 2013), as supporting the government’s argument
 that no meeting of the minds is required to create an im-
 plied contract. However, the court held that there was not
 an implied license, stating:
     The test for determining whether an implied li-
     cense exists in the copyright context has three ele-
     ments. The defendant must show that
     (1) the licensee requested the creation of a work;
     (2) the licensor made that particular work and de-
     livered it to the licensee who requested it; and
     (3) the licensor intended that the licensee copy and
     distribute his work.
 Id. The court further explained that a meeting of the minds
 is always required:
     Even those courts that do not require evidence of
     each of these three elements do require evidence of
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 BITMANAGEMENT SOFTWARE GMBH        v. UNITED STATES            5

     a meeting of the minds between the licensor and
     licensee such that it is fair to infer that the licensor
     intended to grant a nonexclusive license.
 Id. (citing Baisden v. I’m Ready Prods., Inc., 693 F.3d 491,
 501 (5th Cir. 2012)). The other purported authorities cited
 by the government are similarly inapposite.
     The BS Contact Geo software system is a commercial
 product of Bitmanagement. The government cites work-
 for-hire precedent as supporting its actions, but the Navy
 did not hire Bitmanagement to create this product. The
 extensive precedent on work-for-hire copyright issues is
 summarized in Corbello v. Devito, 777 F.3d 1058 (9th Cir.
 2015):
     While we may consider delivery of a copyrighted
     object as a relevant factor to determine the exist-
     ence of an implied license, … the copyright statute
     forbids courts from inferring a transfer of copyright
     or a license from mere delivery of the material ob-
     ject in which the work is embodied. 17 U.S.C. §
     202. Rather, courts should focus primarily on the
     licensor’s objective intent at the time of the crea-
     tion and delivery of the software as manifested by
     the parties’ conduct.
 Id. at 1067 (citing Asset Mktg. Sys., Inc. v. Gagnon, 542
 F.3d 748, 755-56 (9th Cir. 2008) (internal quotation marks
 omitted)).
     In Xtomic, LLC v. Active Release Techniques, LLC, 460
 F. Supp. 3d 1147, 1154 (D. Colo. 2020), the court summa-
 rized that “[a]n implied license protects the licensee only to
 the extent ‘the copyright owners intended that their copy-
 righted works be used in the manner in which they were
 eventually used.’” (citing Johnson v. Jones, 149 F.3d 494,
 502 (6th Cir. 1998)). Here, there plainly was no mutual
 intent that Bitmanagement would abandon its commercial
 purpose and grant the Navy unlimited free licenses to copy
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 6         BITMANAGEMENT SOFTWARE GMBH       v. UNITED STATES

 and use the BS Contact Geo system. The record is clear
 that all participants recognized that the Navy’s testing was
 a prelude to a possible commercial arrangement. Bitman-
 agement did indeed hope for wide Navy installation, but
 not as a gift to the United States.
     Determination of just compensation
     The panel majority properly remands for determina-
 tion of damages, but also offers rulings on the measure of
 damages, Maj. Op. at 23 n.5. Damages and the measure
 thereof were not reviewed by the Court of Federal Claims,
 and were not presented on this appeal. The parties have
 not here briefed nor argued the subject, although it must
 be determined on remand. “The premise of our adversarial
 system is that appellate courts do not sit as self-directed
 boards of legal inquiry and research, but essentially as ar-
 biters of legal questions presented and argued by the par-
 ties before them.” Carducci v. Regan, 714 F.2d 171, 177
 (D.C. Cir. 1983).
      Section 2106 of U.S. Code Title 28 governing Judiciary
 and Judicial Procedure provides that a court of appeals
 “may affirm, modify, vacate, set aside or reverse any judg-
 ment, decree, or order of a court lawfully brought before it
 for review, and may remand the cause and direct the entry
 of such appropriate judgment, decree, or order, or require
 such further proceedings to be had as may be just under
 the circumstances.” 28 U.S.C. § 2106. As stated in Hormel
 v. Helvering, 312 U.S. 552 (1941):
     Ordinarily an appellate court does not give consid-
     eration to issues not raised below. For our proce-
     dural scheme contemplates that parties shall come
     to issue in the trial forum vested with authority to
     determine questions of fact. This is essential in or-
     der that parties may have the opportunity to offer
     all the evidence they believe relevant to the issues
     which the trial tribunal is alone competent to de-
     cide; it is equally essential in order that litigants
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 BITMANAGEMENT SOFTWARE GMBH     v. UNITED STATES         7

     may not be surprised on appeal by final decision
     there of issues upon which they have had no oppor-
     tunity to introduce evidence.
 Id. at 556. The panel majority’s ruling on issues that have
 not been decided on trial, and not presented for appeal, is
 inappropriate.
                        CONCLUSION
    I share the conclusion that the Navy infringed Bitman-
 agement’s copyright, and I concur in the remand for deter-
 mination of just compensation.