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US Navy Accused of Tech Piracy

The US Navy is under fire for allegedly stealing hundreds of millions of dollars worth of intellectual property, including software and a high-speed ship design, but the sailing branch insisted that it respects intellectual property rights.

The Navy is entangled in two long-running federal court cases involving IP theft. In March, German software company Bitmanagement asked a federal court for a summary judgement after accusing the Navy of illegally installing $600 million in software on more than 500,000 computers.

In 2011, the company agreed to license to the Navy 38 copies of its virtual-reality software. The Navy was reportedly happy with the software and Bitmanagement began negotiating to sell additional copies. But then the company said it made a startling discovery.

“Even as it negotiated with Bitmanagement over the proposed large-scale licensing of its product, the Navy was simultaneously copying and installing that software, without Bitmanagement’s advance knowledge or authorization, on a massive scale,” the firm claimed in its lawsuit.

The Navy declined to comment on the ongoing lawsuit. Bitmanagement did not respond to an email inquiry.

Meanwhile, the Navy is appealing the April 2017 decision by a federal judge to award FastShip LLC $6.5 million in damages after the judge determined that the Navy used one of FastShip’s patented hull designs without paying for it.

“There appear to be no hard and fast rules it has to follow in matters of I.P.,” FastShip founder David Giles told me via email, referring to the Navy.

Danny Hernandez, public affairs officer for the U.S. Navy’s head of research, development and acquisition, objected to that characterization. “The Navy prides itself on having the most respected intellectual-property program in the US government.”

FastShip and Bitmanagement stand to lose millions of dollars as the cases play out. For its part, the Navy risks its reputation. “The Navy depends heavily on acquired technology,” Hernandez said. But inventors might be less willing to work with the Navy if they believe the sailing branch might steal their ideas.

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