Commercial Arbitration Award
January 26, 2016
David Wisz obtained a favorable arbitration award in defense of a claim for alleged breach of a software licensing agreement. David represented a large financial institution who has been using software products licensed from the claimant's predecessor-in-interest for more than 10 years as part of its member account statement and check imaging operations. The claimant, a large, publicly-traded company, initiated a demand for arbitration in July 2014 after it purportedly learned for the first time that the financial institution was using the software on a number of servers greater than was allegedly authorized by the original licensing agreement. Based on this alleged breach, the claimant sought damages for past licensing fees and maintenance charges in excess of $4,000,000. The claimant later amended its arbitration demand to include a cause of action for unjust enrichment - based on analysis and testimony of an intellectual property valuation expert, the claimant contended that the financial institution should further disgorge "profits" in the range of $21,000,000 to 26,000,000.
David and his client mounted a vigorous defense primarily based on contract law. Arbitration was held in Boston, Massachusetts in August 2015 pursuant to the JAMS Comprehensive Arbitration Rules and Procedures, followed by extensive post-hearing briefing.
In a lengthy Arbitration Award, the JAMS Arbitrator ruled in favor of David's client, finding that, with one minor exception, there was no breach of the licensing agreement based on the manner in which the financial institution was using the software, rejecting the claimant's attempt to invoke unjust enrichment remedy on a contract-based claim, and agreeing with the defense's statute of limitation argument. The result? The arbitrator awarded the claimant a mere five one hundredths of a percent (0.05%) of its claimed damages. That small award, however, was more than offset by the arbitrator's decision to award David's client tens of thousands of dollars in attorneys' fees and arbitration expenses. Congratulations to David on the resounding victory