Atlantis Services, Inc. v. Asigra, Inc. (16-cv-10864).

  • October 25, 2017

Asigra hired Atlantis to develop and provide software to Asigra, a project that was initially expected to take about a year. After agreeing to the terms for this work, Asigra sought to accelerate the completion of the project. Asigra indicated that it could only do so by incorporating code from Atlantis 2019 own appliance product. The parties orally agreed to Asigra receiving a limited right to use this code, with the parties disputing the consideration due Atlantis for this right. After completion of the project, when a dispute arose over payment, Atlantis 201cunilaterally revoked the nonexclusive license 201d and sued Asigra for breach of contract, trade secret misappropriation, and copyright infringement, among other things. Asigra moved for judgment on the pleadings on all counts. Judge Hennessy granted Asigra 2019s motion with respect to the copyright claims, while denying it with respect to the other claims. He determined that Atlantis had granted a nonexclusive license to the code by the parties 2019 oral agreement, which became irrevocable upon the payment of consideration by Asigra. The reasoning is that, upon payment of consideration (regardless of whether it was complete consideration under the agreement) a contract has been formed, and the remedy for the aggrieved party is through contract law, not copyright.

Also of interest, Judge Hennessy determined that Asigra waived its argument that the allegedly misappropriated trade secrets were not adequately identified by raising it only in a footnote; First Circuit case law holds that arguments raised perfunctorily or solely by footnote are waived. He also denied judgment on the pleadings with respect to Asigra 2019s Ch. 93A claim, finding that one party 2019s breach of contract for the purpose of gaining leverage over the non-breaching party has been deemed an unfair business practice in Massachusetts.

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