Paysys International, Inc. v. Atos Se et al
Filing
411
OPINION & ORDER.....Atoss October 9, 2018 motion for summary judgment is granted with respect to PaySyss territorial restrictions breach of contract claim and denied with respect to PaySyss APS Agreement breach of contract claim. PaySys October 10, 2018 motion for partial summary judgment on its APS Agreement claim is granted. (Signed by Judge Denise L. Cote on 11/20/2018) (gr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
PAYSYS INTERNATIONAL, INC.,
:
:
Plaintiff,
:
:
-v:
ATOS SE, WORLDLINE SA, ATOS IT
:
SERVICES LTD.,
:
:
Defendants.
:
:
-------------------------------------- :
ATOS SE, WORLDLINE SA, ATOS IT
:
SERVICES LTD.,
:
:
Counterclaim
:
Plaintiffs,
:
:
-v:
PAYSYS INTERNATIONAL, INC. and FIRST
:
DATA CORPORATION,
:
Counterclaim
:
Defendants.
:
:
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APPEARANCES:
For the Plaintiff:
Robert D. Owen
Travis J. Mock
Eversheds Sutherland, LLP
The Grace Building, 40th Floor
1114 Avenue of the Americas
New York, NY 10036
Peter C. Quittmeyer
Anna C. Halsey
Eversheds Sutherland, LLP
999 Peachtree Street, Ne
Atlanta, GA 30309
Jack Massey
Mark Thibodeaux
14cv10105(DLC)
OPINION AND ORDER
Eversheds Sutherland, LLP
1001 Fannin, Suite 3700
Houston, TX 77002
James H. Neale
Winslett Studnicky McCormick & Bomser
6 East 39th Street, 8th Floor
New York, NY 10016
For the Defendants:
Leon Medzhibovsky
Francis W. Ryan
Airina L. Rodrigues
Melissa A. Reinckens
Marc E. Miller
Matthew N. Ganas
DLA Piper US LLP
1251 Avenue of the Americas
New York, NY 10020
DENISE COTE, District Judge:
This Opinion resolves dueling motions for summary judgment
in a longstanding litigation between plaintiff PaySys
International, Inc. (“PaySys”) and defendants Atos Se, Worldline
SA (“Worldline”) and Atos IT Services Ltd. (“Atos IT”)
(collectively, “Atos”) regarding the rights to CardPac, a
computer program owned by PaySys.
After a series of decisions
over the course of several years, all but one of PaySys’s causes
of action have been dismissed.
Remaining is PaySys’s breach of
contract claim, which encompasses two allegations of breach, one
relating to Atos’s alleged violation of contractual territorial
restrictions on software licensing and the second relating to
Atos’s alleged sale of software modules without following the
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contractually agreed upon procedures or paying PaySys the
required fees.
Atos filed a motion for summary judgment seeking
dismissal of both allegations and PaySys filed a motion for
partial summary judgment on one of its breach of contract
theories.
For the reasons explained below, PaySys’s motion is
granted and Atos’s motion is granted in part.
Background
The following facts are undisputed or taken in the light
most favorable to the non-moving party unless otherwise noted.
The parties’ dispute centers on licensing agreements for credit
card payment processing software, originally known as “CardPac,”
that was developed by PaySys. 1
CardPac was first released in
1983 and PaySys executives testified that CardPac has been
retired since at least 2001.
Through a series of agreements
beginning in 1988, Atos acquired the right, under the terms of
the agreements, to use and modify the CardPac software, as well
as to grant licenses to CardPac and modified versions of the
software.
For the purposes of this Opinion both the original
CardPac software as well as modifications will be referred to as
PaySys defines CardPac Software in its Second Amended Complaint
(“SAC”) as “the CardPac software created by PaySys, including
object code, source code and related documentation, any complete
or partial copy thereof contained in any other work or medium,
and the confidential information embodied in or associated with
that software.”
1
3
“CardPac Products.” 2
Pursuant to the parties’ agreements, PaySys
also provided Atos with certain rights to use and license a
software program, separate from CardPac, called an “APS Module.”
The Software Acquisition Agreement
In 1988, Paysys’s predecessor company, Credit Card
Software, Inc. (“CCSI”) and Atos’s predecessor, Sema Group SA
(“Sema”), entered into a Software Acquisition Agreement (“SAA”)
pursuant to which CCSI agreed to sell Sema rights to CardPac. 3
The SAA gave Sema certain rights in CardPac, including a tenyear “exclusive, royalty-free right to use, and to grant
Licenses to use” CardPac within a defined international
territory (the “Territory”).
The SAA defines “Use” as:
transferring any portion of any Product from storage
units or media into equipment for processing (whether
by electronic, mechanical or other means); utilizing
any portion of any Product in the course of the
operation of any equipment or programs; merging any
Product or portion thereof into another product; or
referring to any documentation included in the
definition of Product for the purpose of understanding
or operating the Product.
PaySys originally claimed that a series of products licensed by
Atos, including ASCCEND and CAS, contained partial or full
copies of the CardPac software and were therefore subject to the
terms of the parties’ agreements. Following software code
comparison on March 21-22, 2017, the parties agree that ASCCEND
and CAS do not contain software code licensed from PaySys. As
such, allegations arising for licensing agreements for ASCCEND
and CAS have been withdrawn.
2
This agreement was subsequently amended twice, once in December
1988 and again in March 1990.
3
4
Territory is defined in the SAA as listed countries in
Europe and Asia.
This agreement also gave Sema the right to alter the
CardPac source code and create new modules or derivative
products of CardPac and to license such modified products to
customers “solely within the Territory.”
A schedule attached
to the December 1988 amendment to the SAA set out mandatory
license provisions, including that the “License may convey to
the Licensee a non-transferable license to use the Products
solely in the Territory.”
The SAA also conferred the rights obtained by Sema through
the agreement on any “Affiliate” of Sema, defined as “any
corporation or other business entity which controls, is
controlled by or is under common control with a party to this
Agreement.”
An earlier Opinion in this case held that Worldline
-- one of the three defendants in this matter and the successor
to Atos Origin, an entity that acquired Sema Ltd. in 2004 -- is
an “Affiliate” of Sema for purposes of the SAA.
See PaySys
Int'l, Inc. v. Atos Se, Worldline SA, Atos IT Servs. Ltd., 226
F. Supp. 3d 206, 211 (S.D.N.Y. 2016).
The SAA is governed by
New York law.
The APS Agreement
In 1990, the parties entered into a related agreement (“the
APS Agreement”) which authorizes Sema to sell licenses for APS
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Modules to CardPac customers within the Territory and
establishes specific protocols for such sales, including the
fees to which CCSI is entitled for each APS license that was
issued.
The Agreement provides that Atos must pay PaySys
“$100,000 for each sale in Japan or Europe (excluding Greece and
Turkey)” and “$50,000 for each sale in Asia (excluding Japan)
but including Greece and Turkey.”
The APS Agreement states that
these fees are to be paid by Sema to CCSI “in line with payments
from the customer to Sema,” but are in “no event [to] be delayed
for more than six months after the signature of the customer
contract.”
Under the APS Agreement Sema must inform CCSI whenever it
sells an APS license.
Whenever a customer signs a contract with
Sema for an APS license, Sema is required to “formally notify
CCSI of the contract and . . . place with CCSI an order for one
license copy” and to “inform CCSI of the payment terms.”
The APS Agreement also contains a section entitled
“Cancellation,” which provides: “In the event that an APS
contract with a customer of Sema is cancelled, Sema will be
entitled to no refund but CCSI will allow Sema to license APS to
future customers to the equivalent value at no additional
charge.”
The agreement does not define the term “cancellation.”
The APS agreement includes a “Product Updates” provision,
which states that “CCSI will supply to Sema new releases of the
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APS product and documentation as these become available.”
It
also includes a “Product Maintenance” provision, which states
that “CCSI will supply to Sema a second line maintenance service
on the same basis as the remaining license products.”
The Confidential Settlement Agreement
In 2001, the parties entered into the Confidential
Settlement Agreement (“the CSA”), which settled a then-pending
arbitration between the parties.
In the CSA, the parties
clarified and amended the scope of their rights and obligations
under the SAA and the APS Agreement.
Specifically, the CSA
acknowledges Sema’s
perpetual, non-exclusive rights . . . to: (x) grant
licenses to Use all or a portion of the Products
(including for purposes of this subparagraph APS,
subject to the payment provisions of the memorandum
agreement dated October 24, 1990) or derivatives
thereof . . . within the Territory; and (y) itself Use
or operate all or a portion of the Products . . . or
derivatives therof . . . for any purpose whatsoever,
within the Territory.
The CSA also modified the price terms of the APS Agreement with
respect to sales of APS to licensees within countries added by
the CSA to the definition of Territory and redefined the
Territory as “the entire world other than North America . . .
South America, Central America and the Caribbean islands.”
The parties agreed in the CSA that “PaySys shall have no
further obligations to provide maintenance, support,
enhancements, development or other services or software to Sema
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or its licensees, distributors or third parties who use, sell,
license or distribute the Products or derivatives thereof.”
The
CSA also released the parties from then-existing claims arising
under the SAA and the APS Agreement.
The CSA addresses Sema’s rights to grant customers remote
access to the licensed products from outside the Territory.
Section 5(c) of the CSA states:
Notwithstanding any provision or prohibition of the
Software Agreement, the parties acknowledge and agree
that Sema or its Affiliates may at no charge grant,
but only to a customer to whom Sema or its Affiliates
on or before the date of this Agreement granted a
license or other written authorization to Use the
Products or derivatives thereof, the right to Use the
Products or derivatives thereof (including without
limitation CardLink) by remote access from terminals
or workstations located outside the Territory,
provided, however that the Products or their
derivatives must be hosted solely within the
territory.
(Emphasis supplied.)
The CSA also contains a damages provision whereby the
parties agreed that damages would be PaySys’s exclusive remedy
should Sema breach the agreement.
This section also provides
for liquidated damages for breach of the agreement’s territorial
restrictions:
In the event of a violation of the territorial
restrictions of this Agreement, for each such
violation Sema shall be liable for, and only for,
liquidated damages equal to seventy-five percent (75%)
of the revenue received by Sema or any of Sema’s
Affiliates for the grant of rights constituting the
territorial violation.
8
The same section also provides that “[i]n the event of
litigation between the parties with respect to any claim that
Sema or any of Sema’s Affiliates has committed a territorial
violation, the prevailing party shall be entitled to an award of
its reasonable attorneys’ fees.”
The CSA is also governed by
New York Law.
Third-Party Licensing Agreements
Between December 23, 2008, and December 23, 2014, 4 Atos and
its affiliates entered into a number of licensing agreements for
CardPac Products with new customers.
PaySys identifies eight
such agreements as the subjects of its claim that Atos breached
the territorial restrictions in their contract.
Between December 23, 2008, and December 23, 2014, Atos sold
three customer licenses for APS Modules.
One of these sales
arose from an April 2010 addendum to a 2001 agreement with a
third party based in Thailand and provided that the licensed
software was to be installed in Thailand, and the other two
arose from a May 2009 agreement with a third party based in
The parties agree for purposes of these motions that this is
the relevant time period for PaySys’s breach of contract claims
in light of New York’s statute of limitations for breach of
contract claims. See CPLR § 213(2). PaySys, however, reserves
the right to demonstrate at any trial that the statute was
tolled by Atos.
4
9
Europe and provided that the licensed software was to be
installed in Europe.
Atos did not notify PaySys of these two licensing
agreements.
The parties agree that Atos never placed orders
with PaySys for license copies of its APS module in connection
with the May 2009 and April 2010 third-party agreements.
The
parties also agree that Atos never made any payment to PaySys in
connection with these agreements.
According to Atos, since January 1999, seventeen licenses
it issued for APS Modules have been terminated.
Atos produced a
chart that purports to list each APS Module license it has sold
since 1991, the year the purchase occurred, and the year of
termination, but has not submitted any admissible evidence that
the information in the chart is accurate. 5
Procedural History
PaySys filed this case against Atos on December 23, 2014,
alleging violation of contractual rights and of other
intellectual and personal property rights.
The case was
initially assigned to the Honorable Shira Scheindlin.
On July
PaySys also argues that this document should not be considered
because it was produced on April 3, 2017, after the close of
document discovery.
5
10
24, 2015, Judge Scheindlin dismissed PaySys's domestic copyright
claims for failure to state a claim.
On December 10, 2015, PaySys filed its SAC, under which the
current motions arise, alleging ten claims: (1) breach of
contract, (2-3) trade secret misappropriation under New York and
Florida laws, (4-7) copyright infringement under French, Thai,
Belgian, and Chinese laws, and (8-10) conversion, unfair
competition, and replevin under New York law.
On February 26,
2016, Atos answered the SAC and asserted seven counterclaims for
declaratory judgment.
In April 2016, the case was reassigned to
the Honorable Katherine Forrest.
On July 14, 2016, Judge
Forrest granted Atos’s motion for partial summary judgment,
dismissing PaySys’s claims for unfair competition, conversion,
and replevin.
On December 5, 2016, Judge Forrest granted Atos’s
motion for summary judgment on trade secret misappropriation
claims, dismissing PaySys’s second and third causes of action.
On December 8, 2016, Judge Forrest granted Atos’s motion for
summary judgment regarding the scope of intellectual property at
issue, dismissing PaySys’s infringement claims under French,
Thai, Belgian and Chinese law.
On April 6, 2017, PaySys moved to voluntarily withdraw its
sole remaining claim for breach of contract pursuant to Rule
41(a)(2).
While this motion was pending, the parties filed
dueling summary judgment motions on the same claim.
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On July 7,
2017, Judge Forrest granted PaySys’s motion to voluntarily
withdraw on the condition that it pay Atos’s attorney’s fees,
denied PaySys the opportunity to avoid that condition by
withdrawing its motion, and denied as moot the pending summary
judgment motions.
PaySys appealed this order and on August 20,
2018, the Second Circuit vacated the district court’s July 7,
2017 judgment, concluding that the district court erred by
denying PaySys an opportunity to withdraw its motion rather than
comply with the attorneys’ fees condition.
The Second Circuit
remanded the case to give PaySys the opportunity to withdraw its
motion for voluntary dismissal.
On September 25, 2018, this case was reassigned to this
Court.
On October 3, PaySys moved to withdraw its motion for
voluntary dismissal.
Atos did not oppose this motion.
On
October 8, this Court granted PaySys’s motion to withdraw its
motion for voluntary dismissal and granted the parties leave to
renew their already briefed motions for summary judgment on
PaySys’s contract claim.
On October 9, Atos renewing its prior
motion for summary judgment and on October 10 PaySys renewed its
prior motion for summary judgment.
Discussion
Summary judgment may not be granted unless all of the
submissions taken together “show[ ] that there is no genuine
12
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”
Fed. R. Civ. P. 56(a).
“Summary
judgment is appropriate when the record taken as a whole could
not lead a rational trier of fact to find for the non-moving
party.”
Smith v. Cnty. of Suffolk, 776 F.3d 114, 121 (2d Cir.
2015) (citation omitted).
The moving party bears the burden of
demonstrating the absence of a material factual question, and in
making this determination, the court must view all facts in the
light most favorable to the non-moving party.
See Eastman Kodak
Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456 (1992);
Gemmink v. Jay Peak Inc., 807 F.3d. 46, 48 (2d Cir. 2015).
“[W]here the evidentiary matter in support of the motion does
not establish the absence of a genuine issue, summary judgment
must be denied even if no opposing evidentiary matter is
presented.”
Sec. Ins. Co. of Hartford v. Old Dominion Freight
Line Inc., 391 F.3d 77, 83 (2d Cir. 2004) (citation and emphasis
omitted).
Once the moving party has asserted facts showing that the
non-movant’s claims or affirmative defenses cannot be sustained,
“the party opposing summary judgment may not merely rest on the
allegations or denials of his pleading; rather his response, by
affidavits or otherwise as provided in the Rule, must set forth
specific facts demonstrating that there is a genuine issue for
trial.”
Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009)
13
(citation omitted).
“[C]onclusory statements, conjecture, and
inadmissible evidence are insufficient to defeat summary
judgment,” Ridinger v. Dow Jones & Co. Inc., 651 F.3d 309, 317
(2d Cir. 2011) (citation omitted), as is “mere speculation or
conjecture as to the true nature of the facts.”
Hicks v.
Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted).
Only disputes over material facts will properly preclude the
entry of summary judgment.
U.S. 242, 248 (1986).
Anderson v. Liberty Lobby, Inc., 477
“An issue of fact is genuine and material
if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.”
Cross Commerce Media, Inc. v.
Collective, Inc., 841 F.3d 155, 162 (2d Cir. 2016).
Both motions for summary judgment address PaySys’s first
cause of action for breach of contract.
This claim encompasses
two allegations: (1) that Atos has issued software license
agreements that violate provisions of the parties’ agreements
that prohibit Atos from granting licensees permission to
remotely access the products from terminals or workstations
located outside the prescribed Territory; and (2) that Atos sold
three APS Modules without following the procedures required by
the APS Agreement and without paying the contractually required
fees to PaySys.
The elements of a breach of contract claim under New York
law are well established.
They are “(1) the existence of an
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agreement, (2) adequate performance of the contract by the
plaintiff, (3) breach of contract by the defendant, and (4)
damages.”
Eternity Global Master Fund Ltd. v. Morgan Guar.
Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004) (citation
omitted).
Under New York law, “a fundamental objective of contract
interpretation is to give effect to the expressed intention of
the parties.”
2017).
In re MPM Silicones, 874 F.3d 787, 795 (2d Cir.
If the intent of the parties is clear from the four
corners of a contract, its interpretation is a matter of law
that the court may determine by summary judgment.
American Home
Assur. Co. v. Hapag Lloyd Container Linie, GmbH, 446 F.3d 313,
316 (2d Cir. 2006).
“The initial inquiry is whether the
contractual language, without reference to sources outside the
text of the contract, is ambiguous.”
In re MPM Silicones, 874
F.3d at 795.
An ambiguity exists where the terms of the contract
could suggest more than one meaning when viewed
objectively by a reasonably intelligent person who has
examined the context of the entire integrated
agreement and who is cognizant of the customs,
practices, usages, and terminology as generally
understood in the particular trade or business.
Law Debenture Trust Co. of New York v. Maverick Tube Corp., 595
F.3d 458, 466 (2d Cir. 2010) (citation omitted).
By contrast, a
contract is unambiguous if its “language has a definite and
precise meaning about which there is no reasonable basis for a
15
difference of opinion.”
Keiler v. Harlequin Enters. Ltd., 751
F.3d 64, 69 (2d Cir. 2014).
“If a contract is clear, courts must take care not to alter
or go beyond the express terms of the agreement, or to impose
obligations on the parties that are not mandated by the
unambiguous terms of the agreement itself.”
Torres v. Walker,
356 F.3d 238, 245 (2d Cir. 2004) (citation omitted).
In
interpreting contracts, “words should be given the meanings
ordinarily ascribed to them and absurd results should be
avoided.”
Mastrovincenzo v. City of New York, 435 F.3d 78, 104
(2d Cir. 2006) (citation omitted).
Additionally, “an
interpretation of a contract that has the effect of rendering at
least one clause superfluous or meaningless is not preferred and
will be avoided if possible.”
LaSalle Bank Nat. Ass'n v. Nomura
Asset Capital Corp., 424 F.3d 195, 206 (2d Cir. 2005) (citation
omitted).
Territorial Restriction Claim
PaySys identifies eight agreements entered into by Atos
with third parties between December 23, 2008, and December 23,
2014 that it alleges violated the parties’ agreements’
territorial restrictions.
PaySys argues that these agreements
violated the territorial restrictions because they permitted
remote access to the licensed CardPac software from outside the
Territory.
PaySys does not argue that these agreements
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explicitly permit licensees to access the software from outside
the Territory, but rather that the terms of these agreements do
not adequately restrict or forbid such access.
The SAA (executed in 1988) permits Atos to grant licenses
to “Use” the software “solely within the Territory” and defines
“Use” as “transferring any portion of any Product from storage
units or media into equipment for processing” and “utilizing any
portion of any Product in the course of the operation of any
equipment or programs.”
The parties agree that under the terms
of the CSA, Atos may not grant new customers as of April 27,
2001 -- the date of the CSA -- the right to use the CardPac
software by remote access from outside the Territory.
Similarly, because the CSA provides that Atos may grant remote
access to the software from outside the Territory “only to a
customer to whom [Atos] or its Affiliates on or before the date
of the [CSA] granted a license,” the CSA plainly does not permit
Atos to affirmatively grant remote access from outside the
Territory to post-CSA customers.
(Emphasis supplied.)
Nothing
in the SAA or the CSA, however, requires that Atos include
language in its licensing agreements that expressly prohibits
remote access from outside the Territory.
PaySys argues that the eight licenses could be read as
implicitly permitting remote access from outside the Territory
because they do not expressly prohibit such use.
17
This strains
the ordinary reading of the licenses.
A grant of territorial
rights is ordinarily understood to approve use of the product
only in the identified territory.
Paysys’s argument is
insufficient to create a genuine issue of material fact.
Atos
is granted summary judgment on PaySys’s remote access
territorial violation claim.
APS Agreement Claim
PaySys’s second breach of contract claim alleges that Atos
violated the APS Agreement with regard to the three APS licenses
that it sold during the statute of limitations period.
PaySys
alleges that Atos violated the APS agreement by failing to
notify PaySys of these sales, failing to obtain a copy of APS
from PaySys for each sale, and failing to pay PaySys the
contractually required fees for these sales.
The APS Agreement unambiguously requires Atos to notify
PaySys of APS contracts it enters into and to place orders with
PaySys for one license copy for each APS contract it enters
into.
PaySys has shown that Atos did neither.
These two
obligations serve to put PaySys on notice that it is entitled to
a payment of fees.
Where, as here, Atos also fails to make the
contractually required payments, the failures to give notice and
obtain a copy of APS also constitute material breaches of the
APS Agreement.
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Atos contends that the fact that it did not notify PaySys
of these contracts does not constitute a breach because after
the parties entered into the CSA, Atos “d[id] not know who to
talk to” at PaySys regarding the APS Agreement and, after one
attempt in 2001 or 2002 to determine to whom it should report
information regarding its APS sales, concluded that PaySys
“d[id] not seem to be interested in this part of the
arrangement.”
In opposing summary judgment, Atos has the burden
to present evidence of its attempts to provide notice.
It has
failed to point to any admissible evidence of any attempt to
inform PaySys about any of these three licenses, whether by
telephone, email, or letter.
Atos’s reliance on vague testimony
that it fruitlessly attempted to contact PaySys about APS
licensing at least seven years before the three licenses were
issued is insufficient to rebut PaySys’s showing that it
breached the APS Agreement’s notification and ordering
provisions.
With respect to the third prong of this breach of contract
claim, PaySys has shown as well that it is entitled to summary
judgment.
Atos admits that it never paid PaySys royalties for
these three APS licenses and presents no compelling arguments in
defense of this failure to pay.
Atos first argues that it was not obligated to make any
payments to PaySys for these three licenses because, under the
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APS Agreement’s Cancellation Provision, it was entitled to issue
these licenses at no additional cost in substitution for
seventeen terminated APS license agreements.
The Cancellation
Provision states: “In the event that an APS contract with a
customer of [Atos] is cancelled, [Atos] will be entitled to no
refund but [PaySys] will allow [Atos] to license APS to future
customers to the equivalent value at no additional charge.”
The APS Agreement’s Cancellation Provision is ambiguous.
It does not define “cancellation”, or provide any indication of
which terminated customer contracts are deemed “cancelled” and
would thus entitle Atos to issue a future license at no
additional charge.
While the Cancellation Provision cannot be
read to apply to every customer contract that ends for any
reason, its precise application cannot be discerned from the
four corners of the contract.
Regardless of the precise meaning of the Cancellation
Provision, Atos has presented no competent evidence of
“cancelled” contracts that would entitle it to withhold payment
from PaySys on the three licenses at issue in this claim.
The
evidence presented by Atos in support of its cancellation
argument consists primarily of a chart listing APS customer
contract terminations.
Although document discovery in this case
closed on July 22, 2016, this chart was first provided to PaySys
on April 3, 2017, as an attachment to Atos’s expert damages
20
report.
The one-page chart has three columns and lists nineteen
licenses that were “terminated” between the years 1994 and 2015.
Those licenses vary in length from two to fourteen years.
chart provides no definition of its label “termination.”
The
Nor
does Atos present any information regarding the sources of the
information presented in the chart.
For instance, Atos did not
produce any documents to support the information contained in
the chart.
The chart merely states that the information is
“based on data and information known to the company.”
The only
evidence Atos presents is deposition testimony from an Atos
executive that attests broadly to the fact that “many
cancellation[s]” occurred.
Atos has failed to present evidence
from which a factfinder could conclude that the licenses listed
on the chart existed, that they were terminated on the date
listed, and those terminations qualify as “cancellations”
contemplated by the APS Agreement.
Atos has failed to show
therefore that the Cancellation Provision relieves Atos of the
APS Agreement’s requirement that it pay PaySys for these three
licenses.
Atos’s failure to notify PaySys of the three licenses takes
on added significance in light of Atos’s assertion that the
Cancelation Provision allowed it to substitute these licenses
for terminated licenses identified on its chart.
If Atos had
given PaySys notice of the three licenses and explained why it
21
could substitute them for terminated license, the parties would
have had an opportunity to grapple with the ambiguities of the
Cancellation Provision and apply it to the facts as they existed
at that time.
Without such notice, and without any evidentiary
record that would permit a fact finder to conclude today that
such a substitution was within the contemplation of the parties
when they executed the APS Agreement, Atos cannot escape its
obligation to pay PaySys for those licenses.
Atos also argues that PaySys’s breach of contract claim
with regard to the APS licenses fails because PaySys failed to
perform its obligations under the APS Agreement.
Specifically,
Atos claims that PaySys failed to provide product updates and
maintenance as required by this agreement.
also unavailing.
This argument is
The CSA, executed after the APS Agreement,
releases PaySys of further obligations to provide Atos with
maintenance, support, enhancements, and developments related to
its products.
The three licenses that form the basis of
PaySys’s APS breach claim were sold after the CSA and, per the
terms of the CSA, PaySys had no obligation to provide
maintenance or support to Atos.
The APS Agreement requires Atos to notify, place an order
for a license copy, and pay PaySys for each APS license it
sells.
PaySys performed its obligations under the APS Agreement
as modified by the CSA.
It is undisputed that Atos never
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contacted or submitted payment to PaySys regarding the three APS
licenses it issued pursuant to the 2009 and 2010 third-party
agreements and Atos has not presented evidence sufficient to
show that there is a genuine issue of material fact requiring a
trial to determine whether this failure constitutes a breach of
the contract.
Finally, because of this breach, PaySys was
damaged in the amount of $250,000, which is the amount that it
was entitled to receive from Atos for the three APS licenses,
per the terms of the APS Agreement.
Accordingly, PaySys’s
motion for summary judgment on its APS Agreement breach of
contract claim is granted.
Conclusion
Atos’s October 9, 2018 motion for summary judgment is
granted with respect to PaySys’s territorial restrictions breach
of contract claim and denied with respect to PaySys’s APS
Agreement breach of contract claim.
PaySys’ October 10, 2018
motion for partial summary judgment on its APS Agreement claim
is granted.
Dated:
New York, New York
November 20, 2018
________________________________
DENISE COTE
United States District Judge
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