User:Dmac127/Sandbox
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Microsoft Corp. v. DAK Indus., Inc. 66 F.3d 1091 (9th Cir 1995) is a court case in which Microsoft contends that in being licensed the rights to sell Microsoft Word (Word) software units, the then bankrupt DAK Industries had been granted permission to use this Intellectual Property and Microsoft was therefore entitled to continued payments post-bankruptcy in the form of royalties for its use. The court disagreed, believing that the 'economic realities' of the agreement in which payments for a certain number of copies of Word were made in the form of installments meant that the agreement should be considered as a 'lump sum sale of software units' even if the agreement was called a license that required 'royalties' instead of 'payments'. Microsoft was therefore unable to claim special interest over the bankruptcy claim as it was a transfer of goods in the form of a sale, making them an unsecured creditor.[1]
Microsoft Corp. v. DAK Indus., Inc. | |
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Court | United States Court of Appeals for the Ninth Circuit |
Full case name | Microsoft Corporation v. Dak Industries Incorporated |
Decided | October 2, 1995 |
Citation | 66 F.3d 1091 |
Case history | |
Prior action | 27 Bankr.Ct.Dec. 118 (Denied Microsoft's administrative expense claim) |
Court membership | |
Judges sitting | William A. Fletcher, Melvin T. Brunetti, and Thomas G. Nelson |
Case opinions | |
Buying a lump sum of software was found to be equivalent to buying a lump sum of physical goods when considering the 'economic realities' of the deal, even if it was sold under a license providing a 'permission-to-use' the information property. |