Paysys Intl - Complaint Software Copyright Trade Secrets PDF
Paysys Intl - Complaint Software Copyright Trade Secrets PDF
Paysys Intl - Complaint Software Copyright Trade Secrets PDF
REV. 4/2014
The JS-44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of
pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the
JudicialConference of the United States in September 1974, is requiredfor use of the Clerkof Courtfor the purpose of
initiating the civil docket sheet.
PLAINTIFFS
JUDGE SfflBMMi
DEFENDANTS
ATOS SE
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line sT\ J
W/orlJlii
ATTORNEYS
(IF KNOWN)
ATTORnE'
Robert D. Owen
Sutherland Asbill & Brennan LLP
212-389-5000
CAUSE OF ACTION(CITE THE U.S.CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE A BRIEF STATEMENT OF CAUSE)
(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)
Has this action, case, or proceeding, or one essentially the same been previously filed in SDNY at any time? NcQesQjudge Previously Assigned
If yes, was this case Vol.Q Invol. [~J Dismissed. No [~J Yes [~J If yes, give date
IS THISANINTERNATIONAL ARBITRATION CASE?
No 0
Yes
NATURE OF SUIT
PERSONAL INJURY
CONTRACT
PERSONAL INJURY
FORFEITURE/PENALTY
[ ] 367 HEALTHCARE/
I 3110
11120
[]130
[]140
[]150
[1151
11152
INSURANCE
MARINE
MILLER ACT
NEGOTIABLE
INSTRUMENT
RECOVERY OF
OVERPAYMENT &
ENFORCEMENT
OF JUDGMENT
MEDICARE ACT
RECOVERY OF
DEFAULTED
STUDENT LOANS
(EXCL VETERANS)
[1153
RECOVERY OF
OVERPAYMENT
OF VETERAN'S
BENEFITS
[1160
[ 1190
[1195
STOCKHOLDERS
SUITS
OTHER
CONTRACT
CONTRACT
PRODUCT
[ ] 310 AIRPLANE
[ ] 315 AIRPLANE PRODUCT
LIABILITY
[ ] 330 FEDERAL
EMPLOYERS'
REAL PROPERTY
[ 1210
[ ]220
[ ]230
[ ]240
[1245
LAND
CONDEMNATION
FORECLOSURE
RENT LEASE &
EJECTMENT
TORTS TO LAND
TORT PRODUCT
LIABILITY
[ ]290
ALL OTHER
SEIZURE OF PROPERTY
21 USC 881
BANKRUPTCY
OTHER STATUTES
[ ] 422 APPEAL
n 400 STATE
REAPPORTIONMENT
28 USC 158
[ ] 423 WITHDRAWAL
28 USC 157
[ ] 690 OTHER
INJURY PRODUCT
LIABILITY
PROPERTY RIGHTS
[
[
[
[
[
I 410
I 430
I 450
I 460
I 470
LIABILITY
[ ] 340 MARINE
[ I 345 MARINE PRODUCT
LIABILITY
M 820 COPYRIGHTS
[ ] 830 PATENT
[ ] 840 TRADEMARK
PERSONAL PROPERTY
PRODUCT LIABILITY
SOCIAL SECURITY
LABOR
PROPERTY DAMAGE
PRODUCT LIABILITY
STANDARDS ACT
[ J 720 LABOR/MGMT
PRISONER PETITIONS
LIABILITY
[ J196 FRANCHISE
&Case No.
CIVIL RIGHTS
VACATE SENTENCE
28 USC 2255
(RICO)
[ I 480 CONSUMER CREDIT
[ ] 490 CABLE/SATELLITE TV
[ I 850 SECURITIES/
COMMODITIES/
EXCHANGE
RELATIONS
ACTIONS
LEAVEACT (FMLA)
[ ] 790 OTHER LABOR
LITIGATION
[ ] 462 NATURALIZATION
[ ] 550 CIVIL RIGHTS
[ I 555 PRISON CONDITION
[ ] 560 CIVIL DETAINEE
[
[
[
[
[
APPLICATION
ANTITRUST
BANKS & BANKING
COMMERCE
DEPORTATION
RACKETEER INFLU
[ ] 893 ENVIRONMENTAL
MATTERS
[ I 895 FREEDOM OF
26 USC 7609
INFORMATION ACT
[ J 896 ARBITRATION
[ I 899 ADMINISTRATIVE
PROCEDURE ACT/REVIEW OR
APPEAL OF AGENCY DECISION
[ ] 950 CONSTITUTIONALITYOF
STATE STATUTES
CONDITIONS OF CONFINEMENT
DISABILITIES -OTHER
[ ] 448 EDUCATION
REAL PROPERTY
Checkifdemanded in complaint:
DEMAND $>$75,000
OTHER.
DOCKET NUMBER
NOTE: You must also submit at thetime offiling theStatement ofRelatedness form (Form IH-32).
rf
(PLACEAN x INONEBOXONLY)
S 1 Original
Proceeding
ORIGIN
D 2 Removed from
state Court
Reopened
from
(Specify District)
I I 7 Appeal toDistrict
Litigation
Judge from
Appellate
Magistrate Judge
Court
Judgment
I | b. At leastone
party is pro se.
(PLACEANxINONEBOXONLY)
1 U.S. PLAINTIFF
BASIS OF JURISDICTION
IFDIVERSITY, INDICATE
CITIZENSHIP BELOW.
Q4 DIVERSITY
DEF
[]1
[]1
CITIZEN OR SUBJECT OF A
FOREIGN COUNTRY
[]3[]3
[ ]2
[ ]2
( ]4 [ ]4
PTF DEF
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[ ]6
WORLDLINE S.A.
80 quai Voltaire
80 quai Voltaire
REPRESENTATION ISHEREBY MADE THAT, AT THIS TIME, I HAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TOASCERTAIN
RESIBENCE ADDRESSES OF THE FOLLOWING DEFENDANTS:
Checkone:
WHITE PLAINS
(DO NOT check either box if this a PRISONER PETITION/PRISONER CIVIL RIGHTS
COMPLAINT.)
(/flvL
MANHATTAN
SIGNATURE OF
OF ATTORNEY
ATTORNEY OF
OF RECORD
RECORD
DATE 12/23/2014 SIGNATURE
RECEIPr
MOTGffilS
is so Designated.
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Plaintiff,
ERIFIED COMPLAINT
Defendants.
Plaintiff, PaySys International, Inc. ("PaySys"), by its attorneys Sutherland Asbill & r
i.
Brennan LLP, as and for its Verified Complaint in this action against defendant Atos SE o
Co
:--
1.
priation of trade secrets. It has been made necessary by Defendants' intentional and pervasive
non-compliance with agreed-upon, clear license restrictions. Defendants Atos and Worldline
and their respective affiliates have used and continue to use Plaintiffs software products in a
manner that exceeds the use authorized by a governing license once possessed by a predecessor
Defendants owing to their breach of restrictions on its transfer.) Defendants Atos and Worldline
and their respective affiliates have allowed others to have possession and use Plaintiffs software
on terms that the Defendants never had any right to promise or allow. Defendants Atos and
Worldline have granted sublicenses, and have allowed customers to grant sublicenses, that
Defendants and such customers were forbidden from granting under the express terms of the
now-lapsed license. Defendants have failed to pay amounts owed to Plaintiff in accordance with
the original agreement with the predecessor licensee (i.e., SEMA). Defendants have refused to
allow Plaintiff to audit compliance by them or their customers, despite the fact that the governing
license entitles Plaintiff to do so. Defendants have refused to cooperate with Plaintiff for the
enforcement of Plaintiff s rights against infringers, despite the fact that the governing license
requires the licensee to cooperate in such efforts. Defendants have provided only a small
fraction of the information requested by Plaintiff necessary to determine compliance, and even
the information reluctantly provided shows flagrant non-compliance and proves that Defendants'
professions of compliance are false, and further shows that Defendants' awareness and control
over their own compliance measures are grossly deficient.
2.
entered in 1988 between (i) Credit Card Software, Inc. ("CCSI") and (ii) SEMA Group SA
("SEMA"), SEMA was granted a strictly limited license to use, distribute and sublicense certain
CCSI credit card processing software products in 36 countries in Europe and Asia. (CCSI was
later renamed PaySys International, Inc., and in 2004, SEMA was acquired by Defendant Atos.
For ease of understanding this complaint will refer to CCSI and PaySys throughout as "PaySys,"
and references to "Atos" will refer to Atos, SEMA, and any intervening owner of SEMA unless a
distinction is being made between these entities.) In exchange SEMA was obligated to pay
certain fees to PaySys and comply with license restrictions. As alleged in more detail below, the
parties amended the Base Agreement once in 1988, twice in 1990, and a final time in 2001.
Pursuant to the final version of the parties' agreement (the "Final Agreement" or "Agreement"),
Atos is obligated to pay PaySys license fees as explicitly set forth in several contractual
categories. As an example of the flagrant non-compliance by Defendants with license
obligations, the unpaid fees for just one module (the Application Processing System, or APS) at
the time of the commencement of this action amounted to at least $450,000, plus interest (and
Defendants have licensed many such modules). Defendants have not paid PaySys thisamount in
the year since PaySys discovered the default and called itto Defendants' attention. This is only
one of many license violations. Plaintiffs lost profits for other unlicensed activities of Atos and
Worldline are far greater, and are believed to equal hundreds of millions of dollars.
3.
PaySys suspected possible violations of the Agreement only in 2013 and then
promptly initiated a compliance review with Atos and Worldline in order to ascertain the
existence and scope of actual violations, to determine the amount due and owing for the non
compliance, and to request that all payments that are due and owing be made immediately.
PaySys' requests were met with delay and objection from Defendants, but even the small amount
of information provided to PaySys by Defendants provides a convincing trail of major and
persistent violations that Defendants committed orallowed tooccur for over ten years. PaySys'
attempt to verify and quantify the full scope of those violations have proven fruitless. PaySys
therefore brings this action to recover substantial fees owed by Defendants Atos and Worldline,
an award of damages and equitable relief, and a declaration that Defendants possess no license at
all covering Plaintiffs software products.
JURISDICTION AND VENUE
4.
This action arises underthe Copyright Act, 17 U.S.C. 101 et seq. This Courthas
subject matter jurisdiction over the claims asserted herein under 28U.S.C. 1331 (federal
5.
Venue is appropriate in this judicial district because (a) Defendant Atos has
consented and the Parties have agreed that exclusive jurisdiction and venue is placed in this judicial
district in paragraph 6(d) of the 2001 amendment to the Agreement, and (b) Defendant Worldline as
a present and former "Affiliate" of Atos is subject to the same obligations as Atos as provided in
pages 24-25 of the Base Agreement.
PARTIES
6.
applications globally. PaySys was founded as Credit Card Software, Inc. in 1981 and changed its
name to PaySys International, Inc. in 1995. PaySys is organized and exists under the laws of
Florida and has its principal place of business in Maitland, Florida. Since 2001 PaySys has been
a wholly-owned subsidiary of First Data Corporation, a global payment processing company.
First Data Corporation and PaySys have executive offices in New York.
7.
services corporations headquartered in Bezons, France. In 2004, Atos publicly announced its
acquisition of SEMA (which was the original licensee named in the Agreement) from
Schlumberger; Schlumberger publicly announced its acquisition of SEMA in 2001. In both
cases, public information indicated that SEMA continued to exist and operate as a business,
which led Plaintiff to believe that no impermissible transfer of the license had occurred.
terms of the Agreement, that assignment to Atos is invalid. The Agreement, by its terms, permits
assignment of the license only to an "Affiliate of SEMA," and Atos, Worldline, and their
respective affiliates (as the counterparty to the purchase ofSEMA from Schlumberger in 2004)
are clearly not an "affiliate ofSEMA." In fact, it now appears that Atos' disregard ofthe clear
prohibition on assignment in the terms ofthe Agreement spelled the beginning ofthe
Defendants' disregard ofmany, many license limitations and other terms in the Agreement. Atos
therefore possesses no license to use the software at all or conduct other business under the
Agreement. While this complaint deals with Atos' particular violations of the license terms of
the Agreement, the first and most significant violation of all is that Atos itself is not even entitled
to claim the license, having neither acquired itin a proper way nor paid for the purchase ofits
own license.
8.
subsidiary of Atos. It is now apartly owned subsidiary of Atos as aresult of apublic offering of
Worldline stock conducted this year. Defendant Worldline SA, like Defendant Atos SE, did not
request or receive PaySys's approval for any assignment of the Agreement or grant of rights
involving the PaySys software. Worldline now claims and purports to hold and exercise most or
all ofthe rights in the software previously exercised by Atos. Worldline has falsely represented
to the public that it has the unlimited right to do so. Like Atos, Worldline is not licensed to use
the software at all or conduct other business under the Agreement. As a result of the 2014 spin
offofWorldline, Worldline is now independently managed and operated. No assurance has been
given to PaySys that Worldline is agreeing to be bound by the license restrictions contained in
the Agreement.
GENERAL ALLEGATIONS
9.
PaySys has invested millions of dollars and many years of work in the
development of its credit card payment processing software applications known originally as
CardPac. It is financial application software that is used by banks and transaction processing
companies to process payments and manage accounts made by way of credit, debit and stored
value cards. The CardPac software consists of at least eight modules, including numerous
applications within each module, which together comprise millions of lines ofcode. CardPac
was first released in 1983 and was enhanced by PaySys periodically during the next two
decades.
10.
PaySys has complied with the Copyright Act, 17 U.S.C. 101 et seq., and has
obtained from the Register of Copyrights Certificates of Registration for PaySys's software
programs and related materials. PaySys owns the following eight copyright registrations in the
software programs and related materials, each registered November 7, 2014:
a) CardPac - OLA 606: OAS100, Reg. No. TXu001913381
b) CardPac - SSC 140: SSU900, Reg. No. TXu001913382
c) CardPac - OLC 400: OCD200, Reg. No. TXu001913412
d) CardPac - CSM 700: KSD200, Reg. No. TXu001913410
e) CardPac - APS 400: APD200, Reg. No. TXu001913414
f) CardPac - IMP 420: CCSUT1, Reg. No. TXu001913415
11.
PaySys is currently and at all relevant times has been the sole ownerof all right,
title and interest in and to the copyrights in PaySys' CardPac software programs and related
materials, including applicable copyrights and trade secrets.
12.
The CardPac software and related source code and technical information are trade
secrets of PaySys which canbe used and disclosed by Atos and its licensees only to the extent
allowed by the Agreement. The Agreement contains extensive confidentiality requirements
intended to protect and maintain those trade secrets.
The Parties' Licensing Agreement
13.
The respective rights and responsibilities of Plaintiff PaySys and Atos were and
are set forth in the Agreement. Plaintiff has performed its obligations under the Agreement, but
the Defendants (including as putative successor(s) to SEMA) have not.
14.
Under a series of agreements dating between 1988 and 2001, SEMA acquired
from PaySys contractually limited rights (i) to use the CardPac software itself, and (ii) to sell to
others limited licenses to use the CardPac software. The series of agreements by which SEMA
acquired its limited rights are as follows:
a.
Acquisition Agreement (herein, the "Base Agreement"). PaySys licensed its software to
SEMA, and granted certain rights to SEMA to sublicense its software in 36 designated
countries in Europe and Asia.
b.
Amendment") signed by PaySys and SEMA and dated December 28, 1988 but to take
effect as of October 31, 1988, the date of the Base Agreement.
c.
On or about October 24, 1990, PaySys and Atos entered into a signed
writing (the "Oct. 1990 Amendment") inorder to "clarify" the terms related to payments
due from SEMA to PaySys on salesof copies of the APS module.
e.
On or about April 27, 2001, PaySys and SEMA entered into a Confidential
Settlement Agreement (the "Apr. 2001 Amendment") by executing a writing bearing that
date. The Apr. 2001 Amendment effected a further amendment of the Base Agreement,
expanded SEMA's territory tothe entire world other than North and South America, and
was the final amendment of the agreement sued on herein. The currently operative
agreement is referred to herein as the "Agreement."
15.
object code and source code form. Possession ofthe source code ofa software program gives
programmers an important advantage because itequips them, inter alia, (i) to customize the
software, (ii) to port itto a different platform oroperating system, and (iii) to add non-original
modules to the program. These activities cannot practically be accomplished without the source
code. Ifperformed by someone other than the owner ofthe software program without a license
from the owner, all of these activities violate the owner's copyright and trade secret rights in the
software program.
16.
Through the terms of the Agreement, SEMA acquired the right to use the CardPac
software itselfand to modify the CardPac source code as it saw fit. SEMA also acquired the
right to license the CardPac software to end users in countries outside North and South America.
Defendant SEMA did not, however, have the right under the terms of the Agreement to authorize
those end users (or any other person or entity besides SEMA itself) to modify the software. All
the license restrictions applicable to CardPac in the Agreement apply equally to such things as
associated program and system documentation, reference manuals, user manuals and flowcharts,
and to any work that derives from or contains any part of the software. Upon information and
belief, the software that the Defendants and their affiliates have licensed and used containing
CardPac software include software Defendants have named Cardlink, Cardlink II, ASCCEND,
SemaCard, and Cardlink APS. (For convenience, references to PaySys software in the complaint
include these other software packages, as the context may require, because the license
restrictions of the Agreement apply equally to software that includes or derives from any part of
the CardPac software.)
17.
a.
notgrant, and shall take reasonable measures to assure that no Distributor grants, any
rights or privileges thereunder which exceed the rights granted to [Atos] hereunder."
b.
software only to (i) Distributors, butthe right to appoint Distributors was limited to a
period often years, and (ii) User Licensees, whose rights were limited to "Use," as
defined in the Agreement. According to the Agreement, "A UserLicensee does not have
the further right to grant sublicenses."
c.
purported License which violates or contradicts the terms and conditions of this
Agreement shall not be a valid license."
d.
this Agreement without the prior written consent of the other" although an "Affiliate of
SEMA" is exempted from this prohibition. "Affiliate" is defined in section 1(a) of the
Base Agreement as "any corporation or other business entity which controls, iscontrolled
by or is under common control with a partyto this Agreement."
e.
In Section 14(a) of the Dec. 1988 Amendment SEMA agrees "to treat the
Products ... in the same fashion that it treats its own valuable confidential and
proprietary information and to refrain from using or disclosing the Products except as
permitted in this Agreement."
f.
each license it issues a term permitting termination of the license for any breach of the
licensee's confidentiality obligations.
g.
include in each license it issues a term permitting it to audit the licensee's adherence to
the confidentiality obligations imposed by the license.
Defendant's Breaches and Infringing Activities
18.
ways, as follows.
19.
First: Atos promised in the Agreement and clarified specifically in the Oct. 1990
Amendment that it was obligated to pay (i) $100,000 for each APS license sold in Japan and all
European countries other than Greece and Turkey, and (ii) $50,000 for each APS module sold in
Asia (ex Japan) and Greece and Turkey. Section 7 ofthe Final Agreement provides for the
amount instead to be $75,000 per APS license in certain cases. The Defendants have in fact
made numerous such sales of APS licenses, without payment to PaySys. Defendants claim the
number to be seven or eight. Defendants Atos and Worldline have refused to give PaySys
sufficient information to verify the correct number, even though PaySys has informed the
Defendants' senior management that the information regarding APS sublicensees is incomplete,
contains errors, and does not take account of events like transfers, reorganizations, and service
transactions that resulted in additional licensing of the APS module. Despite Defendants' legal
obligation to do so, and until PaySys initiated its compliance verification, Defendants never
acknowledged or reported making a single sale to PaySys. Even today, PaySys has not been paid
for any APS licenses. Defendants' failure to identify these relevant sales and pay PaySys the
agreed fees is in breach ofthe Agreement and represents an infringement ofPaySys's rights in
the APS module for the reason that a covenant directly connected to the APS license has been
materially violated.
20.
Atos and Worldline, PaySys has recently discovered that Atos, Worldline, and their affiliates and
predecessors give the customer the explicit right to modify the licensed software. The right to
11
modify software (i.e., in copyright terms, to make a "derivative work") is an exclusive right
retained by PaySys as owner of the applicable copyrights. The Agreement entitles SEMA to
exercise this right; it does not entitle SEMA to sublicense that right. The "Use" privileges as
defined in the Agreement and which SEMA is entitled to sublicense to end users do not include
the right to modify the software or make a derivative work. The rightto modify software is a
very important and valuable consideration in licensing and software practice generally - by
purporting to sublicense to customers the right to modify the software without the consent of
PaySys and due consideration, Defendants violated the Agreement, infringed PaySys's
intellectual property rights, and have caused customers and business partners to infringe
PaySys's intellectual property rights. Defendants' practice of awarding customers and business
partners license rights that Defendants have no right to confer also gives Defendants an unfair
cost advantage because Defendants avoid attendant charges for such a sublicense due PaySys.
21.
derivative works, the customer agreements of Atos, Worldline and their affiliates recently
disclosed to PaySys fail to include certain key the provisions that Schedule F of the Dec. 1998
Amendment requires SEMA to include in every customer agreement. Some of the customer
agreements also contain other deviations from the requirements of the Agreement not approved
by PaySys.
22.
The failure of Atos and Worldline to adhere to the sublicensing requirements and
conditions contained in the license the Agreement is botha breach of the parties' Agreement and
places customers in the position of infringing PaySys's copyright and trade secrets. According
to the 1988 Agreement (page 16), "Any purported License which violates or contradicts the
terms and conditions of this Agreement shall not be a valid License." This wrongful and
12
unlicensed conduct is continuing and is an ongoing violation of the Agreement, despite the
admonition in the Agreement that SEMA "may not convey any other right, title or interest" in
the software without PaySys's consent.
23.
During the compliance verification initiated by PaySys during the past year, an
Atos senior officer repeatedly assured PaySys that Atos was in full compliance with the
requirements of the Agreement. Atos also stated that itscustomer contracts were "in
compliance" with the requirements of the Agreement. In light of the facts known today, these
statements were false and intended to misrepresent and conceal the truth of systematic non
compliance with the requirements of the Agreement.
24.
Worldline, PaySys has recently found that both the Defendants and their customers are dealing
extensively with third-party service providers and application developers by improperly allowing
them, inter alia, to engage inapplication development and support, relicensing of modifications
and enhancements they create, hosting and outsourcing, and support activities, all of which
require unlicensed access to or use of the PaySys software. For example, on September 14,
2014, Worldline publicly announced that it had entered into a five-year agreement with a Thai
company called Accellence. According to Worldline's press release, Worldline's agreement
with Accellence provided Accellence the right to resell and support PaySys software. The
Accellence agreement has reportedly been in place since 2009, renewed each year. However, the
Agreement flatly prohibits appointment of new distributors by Atos after 1998. Atos gives no
explanation for why it appointed Accellence as a distributor, especially inthe middle of an audit
in which Atos's compliance with the terms of the Agreement was under review.
13
25.
Fourth: Publicly available information shows that other business operators acting
in concert with Defendants (through Defendants' "extensive partner ecosystem") and their
licensed end users have been given access to and use the PaySys software, including source
code, without the benefit of a valid license. PaySys has demanded that Defendants Atos and
Worldline investigate and explain publicly reported activities of numerous third-party service
organizations that appearto involve the software, including in some cases application
development. These service organizations appear to include Accellence, Attra, IBM,
Technological Information Consultants, iSphere Global, Apar Technologies Sdn Bhd, A-IT
Software Services Pte Ltd, iTAC MSC Outsourcing, SZ IT Center, ACI Worldwide, IAM, DL
Resources Pte. Ltd, and WiPro. Clause 10 of the 1988 Letter Agreement requires SEMA to
notify PaySys of any infringement of PaySys's rights that comes to the attention of its senior
management and to cooperate reasonably with PaySys to attempt to halt such infringement. Yet
Atos and Worldline have declined to provide information or assistance regarding the evidence of
access and use that PaySys has uncovered involving these third parties.
26.
Agreement, Atos caused SEMA to assign the Agreement to Atos SE without the consent of
PaySys. This violated Section 17(b) of the Base Agreement as well as the copyright laws. Such
an attempted assignment is invalid and ineffective - as if a license holder were to grant a license
to a stranger, and the assignee acquires no rights as a result of the invalid assignment.
Furthermore, Atos simultaneously caused SEMA to dissolve, resulting in the loss and
abandonment of SEMA's own license. Since the date of that impermissible assignment neither
Atos nor Worldline nor any other licensee or sublicensee or other entity claiming rights through
14
the license held by SEMA has had the right to use the PaySys software products and related
materials that are the subject of this complaint.
27.
present, to verify Atos's compliance with the requirements of the Agreement and to enforce
PaySys's rights. PaySys has exercised its right underthe Agreement and demanded that
Defendants cooperate with PaySys to ascertain whether the conduct of Defendants, their
customers, and service organizations acting in concert with them have violated the Agreement
and PaySys's intellectual property rights.
28.
Defendant the terms and amount of paymentthat was due and owing. Defendantrefused to pay
or provide PaySys with credible justification for not paying the sums that were due and owing.
29.
30.
under the license agreement, Defendants have refused to permit PaySys to audit all buta small
number of Defendants' agreements with their customers.
31.
Defendants have refusedto provide PaySys with a proper accounting of its sales
of APS licenses.
32.
to verify whether customers and third parties are using the CardPac software consistently with
the Agreement and PaySys' intellectual property rights.
15
33.
allow PaySys to investigate whether Defendants or their customers have granted sublicenses to
third-party service providers and application developers, such as Worldline did through its
agreement with Accellence as described in Worldline's press release of September 14, 2014.
FIRST CAUSE OF ACTION
(Breach of Contract)
34.
Plaintiff repeats and realleges, as if fully set forth herein, the allegations of
paragraphs 1 to 33.
35.
affiliate of SEMA, purport to operate underwritten contracts with PlaintiffPaySys, including the
Agreement, which require SEMA to pay Plaintiff for eachrelevant sale of a license to the APS
module.
36.
customers be made subjectto prescribed license limitations, but Defendants have not included
those limitations in the customeragreements and Defendants instead systematically authorize or
permit customers to exceed those limitations.
37.
Application development, resale or customization of software are all outside the definition of
"Use," which is limited to "transferring any portion of any Product from storage units or media
16
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 thereofinto another product; or referring to any documentation included in the
definition of product for the purpose of understanding or operating the Product." [Clause l(o),
1988 Agreement].
38.
The Agreement also prohibits SEMA from assigning the Agreement without the
PaySys' written consent to any other entity, except to an Affiliate of SEMA. The 2004
assignment by SEMA to Atos violates the Agreement and voids the Agreement. Since the date
of that impermissible assignment, all activities by Defendants and their licensees have violated
PaySys' rights in the software and breached the Agreement.
39.
Plaintiff PaySys has demanded payment from Defendants Atosand Worldline for
each of these breaches, and by the filing of this Complaint hereby demands payment of all
unpaid sums. Defendants has failed and refused, and it continues to fail and refuse to pay a
substantial amount of money that is due and owing for the violation of the Agreement.
SECOND CAUSE OF ACTION
(Copyright Infringement)
40.
Plaintiff repeats and realleges, as if fully set forth herein, the allegations of
paragraphs 1 to 39.
41.
42.
17
43.
Plaintiff is further entitled to their reasonable and necessary attorneys' fees and
full costs pursuant to Copyright Act, 17 U.S.C. 505 and otherwise according to law.
THIRD CAUSE OF ACTION
45.
Plaintiff repeats and realleges, as if fully set forth herein, the allegations of
paragraphs 1 to 44.
46.
user manuals and flow charts associated therewith ("PaySys Trade Secrets") constitute trade
secrets under New York law.
47.
At all times PaySys has taken appropriate measures to protect the PaySys Trade
Secrets from unauthorized disclosure or use, including by including specific provisions in the
Accellence, Defendants have (i) disclosed PaySys Trade Secrets to persons or entities other than
those permitted by the Agreement, (ii) allowed its licensees to use the PaySys Trade Secrets in
ways not authorized by the Agreement, and (iii) since the illegal assignment from SEMA to Atos
in 2004, have themselves and allowed others to use the PaySys Trade Secrets without
authorization.
18
50.
As a direct and proximate result of said disclosures, and said unauthorized uses,
51.
Plaintiff repeats and realleges, as if fully set forth herein, the allegations of
paragraphs 1 to 50
52.
53.
amounting to the actual loss caused by the misappropriation of the PaySys Trade Secrets and the
unjust enrichment to Defendants caused by the misappropriation that is nottaken into account in
computing the actual loss. Alternatively, at PaySys' option, PaySys is entitled to a reasonable
royalty for Atos' and Worldline's unauthorized disclosure or use of the PaySys Trade Secrets.
FIFTH CAUSE OF ACTION
(Declaratory Judgment)
54.
Plaintiff repeats and realleges, as if fully set forth herein, the allegations of
paragraphs 1 to 53.
55.
The governing license issued to SEMA and nowclaimed by Atos was improperly
assigned by SEMA to Atos in 2004without the consent of PaySys. At the time, Atos was not an
Affiliate as the Agreement defines that term, and thus was not entitled to take an assignment of
the governing license without PaySys' consent. This impermissible action violated an
unambiguous prohibition in the Agreement and copyright law, and voided the governing license
19
claimed by Atos and any sublicenses granted by SEMA or Atos by virtue of the governing
license.
56.
any distributor to a third party is invalid if as written or in practice the licensee is permitted to
engage in activities with respect to the CardPac software that exceed the limited use privileges
that SEMA is authorized by the Agreement to convey to its licensees.
57.
Worldline concerning (i) the current validity of the governing license and (ii) the validity of
licenses granted by Defendants to third parties to use the CardPac software.
58.
declaratory judgment.
59.
60.
Defendants Atos and Worldline or their affiliates or used in violation of the Agreement is void.
DEMAND FOR A JURY TRIAL
Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff PaySys
20
II.
III.
IV.
audit of their, their customers' and any other purported sublicensees' compliance with the
Agreement;
V.
VII.
their respective officers, agents, servants, employees, attorneys, and affiliated companies,
their assigns and successors in interest, and those persons in active concert or participation
with it, from continued acts in breach of the Agreement;
VIII.
their respective officers, agents, servants, employees, attorneys, and affiliated companies,
their assigns and successors in interest, and those persons in active concert or
participation with it, from the continued violation of the Florida Uniform Trade Secrets
Act;
IX.
Prejudgment interest at the statutory rate from the time payments came
due;
X.
21
XI.
Such other and further relief as to this Court shall seem just and proper.
Robert D. Owen
(212)389-5000
Attorneysfor Plaintiff
22
VERIFICATION
STATE OF NEBRASKA
)
ss.:
COUNTY OF DOUGLAS
1.
2.
I have read the foregoing Complaint and know the contents thereof. The contents
thereof are known to me to be true or have been supplied to me by others on whom I customarily
rely in the conduct of my business affairs and are true to the best of my knowledge, information
or belief. As to matters therein stated to be alleged on information and belief, I believe them to
be true.
Notary Public
23
Certificate of Registration
This Certificate issued under the seal of the Copyright
,-*IiL*.
A-'hfo.
c vCaJl
TXu 1-913-381
Effective date of
registration:
November 7. 2014
Title
Title of Work: CardPac - OLA 606: OAS100
Completion/Publication
Year of Completion:
1996
Author
Author:
Author Created:
Yes
United States
Copyright claimant
Copyright Claimant:
Name:
Llisabeth A. Langvvorthy
Email:
eteas<}sutherland.com
Address:
Telephone:
202-383-0100
Certification
Name:
Daniel C. Neustadt
Date:
November 7, 2014
34250-1622
Page 1 of I
Registration #:
Service Request #:
TXUOO1913381
1-1882689121
KlisabethA. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
This Certificate issued under the sealof the Copyright
Office in accordance with title 17, United States Code,
LA^^JtE
J870-
TXu 1-913-382
CXMc*~
Effective date of
registration:
November 7. 2014
Title
Title of Work: CardPac - SSC 140: SSU900
Completion/Publication
Year of Completion:
1989
Author
Author:
Author Created:
Work made for hire:
Citizen of:
United States
Copyright claimant
Copyright Claimant:
Name:
Llisabeth A. Langworthy
Email:
eteasi/sutherland.com
Address:
Telephone:
202-383-0100
Certification
Name:
Daniel C. Neustadt
Date:
November 7. 2014
34250-1622
Page 1 of
Registration #:
Service Request #:
TXUOO19133 82
1-1882689226
Llisabeth A. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
ThisCertificate issued underthe seal ofthe Copyright
.v> *!"**.
TXu 1-913-412
Effective date of
registration:
November 7,2014
Title
Completion/Publication
Year of Completion:
1992
Author
Author:
Yes
United States
Copyright claimant
Copyright Claimant:
Telephone:
202-383-0100
Certification
Name:
Daniel C. Neustadt
Date: November7,2014
Applicant's Tracking Number:
34250-1622
Page 1 of 1
Registration #:
TXUOO1913412
Elisabeth A. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
;This Certificate issued under the seal ofthe Copyright
.**
**^ TTL^.JL'&I
Register of Copyrights,United Statesof America
Registration Number
TXu 1-913-410
Effective date of
registration:
November 7,2014
Title
Title of Work: CardPac - CSM 700: KSD200
Completion/Publication -
Year of Completion:
1995
Author
Author:
Author Created:
Work made for hire:
Citizen of:
computer program
Yes
United States
Copyright claimant
Copyright Claimant:
Name:
Elisabeth A. Langworthy
Email:
Address:
Telephone:
202-383-0100
Certification
Name:
Daniel C. Neustadt
Date:
November 7,2014
34250-1622
Page 1 of 1
Registration* TXU001913410
Service Requests
1-1882688996
ElisabethA. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
,lVv!liL*.s.
"7?UL A rtkUS
Register of Copyrights, UnitedStates of America
TXu 1-913-414
Effective date of
registration:
November 7,2014
Title
Title of Work: CardPac - APS 400: APD200
Completion/Publication
Year of Completion:
1992
Author
Author:
Author Created:
Work made for hire:
Citizen of:
computer program
Yes
United States
Copyright claimant
Copyright Claimant: PaySys International, Inc.
495 N. Keller Road, Suite 400, Maitland, FL, 32751, United States
Email: [email protected]
Address:
Telephone:
202-383-0100
Suite 700
Certification
Name:
Daniel C. Neustadt
Date:
November 7,2014
34250-1622
Page 1 of 1
Registration #: TXU001913414
Elisabeth A. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
This Certificate issued under(the seal ofthe Copyright
.STAVjfj
TXu 1-913-415
Effective date of
registration:
November 7,2014
Title
Title of Work: CardPac - IMP 420: CCSUT1
Completion/Publication
Year of Completion:
1992
Author
Author:
Author Created:
Work made for hire:
Citizen of:
computer program
Yes
United States
Copyright claimant
Copyright Claimant:
Name:
Elisabeth A. Langworthy
Email:
Address:
Telephone:
202-383-0100
Suite 700
Certification
Name:
Daniel C. Neustadt
Date:
November 7,2014
34250-1622
Page 1 of 1
Registration #: TXU001913415
Elisabeth A. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
This Certificate issuedunder the seal of the Copyright
Office in accordance with title 17, United States Code,
lA hdu?~JbL
TXu 1-913-416
OUUC+-
Effective date of
registration:
November 7, 2014
Title
Title of Work: CardPac - ITS 700: ITD120
Completion/Publication
Year of Completion:
1997
Author
Author:
Author Created:
Work made for hire:
Citizen of:
Copyright claimant
Copyright Claimant:
Name:
Elisabeth A. Langworthy
Email: [email protected]
Address:
Telephone:
202-383-0100
Suite 700
Certification
Name:
Daniel C. Neustadt
Date:
November 7,2014
34250-1622
Page 1 of 1
Registration #: TXU001913416
Elisabeth A. Langworthy
700 Sixth Street
Suite 700
Certificate of Registration
This Certificateissued under the seal of the Copyright
Office in accordance with title 17, United States Code,
'TT'UL A rl&.
/870
TXu 1-913-417
o ^^Ajl
Effective date of
registration:
November 7, 2014
Title
Title ofWork: CardPac - CPS 612: CPD110
Completion/Publication
Year of Completion:
1997
Author
Author:
Author Created:
Work made for hire:
Citizen of:
computer program
Yes
United States
Copyright claimant
Copyright Claimant:
Name:
Elisabeth A. Langworthy
Email:
Address:
Telephone:
202-383-0100
Certification
Name:
Date:
Applicant's Tracking Number:
Daniel C. Neustadt
November 7, 2014
34250-1622
Page 1 of 1
Registration #: TXU001913417
Service Request #: 1-1882688925
Elisabeth A. Langworthy
700 Sixth Street
Suite 700