Pierluigi Paganini November 30, 2013

The U.S. Government was sentenced for $50 Million because it has used of pirated copies of Military Software designed by Apptricity company.

The software piracy is not a prerogative of commercial software, illegal copies of military software have been used for years by U.S. Forces. The software used by U.S. military appears to be pirated copies of logistics software used for planning logistic activities in critical missions.

The Apptricity company, who has designed the software, accused the US Forces of willful copyright infringement and sued the Government for nearly a 250 Million dollars in unpaid licenses.

Apptricity signed a contract with the U.S. Army, in 2014 to provide an application that manages troop and supply movements, consenting its deployment on five servers and 150 standalone devices, .

Surprising, a recent settlement announced the US Government has agreed to pay $50 million for an early termination of the litigation.

“The Army has used Apptricity’s integrated transportation logistics and asset management software across the Middle East and other theaters of operation. The Army has also used the software to coordinate emergency management initiatives, including efforts following the January 2010 earthquake in Haiti,” states the company.

Let’s step back and try to analyze the context of avoiding false morality and evaluating the repercussions in terms of security of the illegal adoption of pirated copies.

The US Government, supported by major software companies has adopted an intransigent conduct against piracy as confirmed by the statements pronounced by the Vice President Joe Biden when he introduced the Joint Strategic Plan to combat intellectual property theft.

“Piracy is theft, clean and simple,” 

Apptricity accidently have discovered the installation of thousands of unlicensed copies of the software during Strategic Capabilities Planning. In 2009 when the U.S. The Army Program Director revealed that the application designed by Apptricity was used by thousands of devices by the US forces.

Violating the contract the US military had installed pirated copies on 93 servers and more than 9,000 standalone devices.  Considering a license fee of $1.35 million per server and $5,000 per device, damage derived by piracy was estimated by Apptricity at $224 million in unpaid fees.

Apptricity filed a lawsuit at the U.S. Court of Federal Claims, the judgment in favor of the company was peremptory the Government was accused of willful copyright infringement.

“The Government knew or should have known that it was required to obtain a license for copying Apptricity software onto each of the servers and devices,”

After long negotiations the parties reached an agreement for the payment of a reduced amount:

“After Alternative Dispute Resolution proceedings, the parties agreed to settle for $50 million. The figure represents a fraction of the software’s negotiated contract value that provides a material quantity of server and device licenses for ongoing and future Department of Defense usage,” stated Apptricity.

Now apart the legal implication of piracy in a military environment let’s consider that the illegal copies of the software within critical environments represent a serious threat. Illegal copies are out of maintenance an could be also excluded from update programs, this may have serious repercussions in term of security. In critical environments pirated copies could also be deliberately altered to introduce malicious agents representing a concerning hole within overall security context.

In the specific case a bug, but also an intentional hack, could cause the exposure of sensitive information in high risky context. The shared awareness about the adoption of illegal copies within an environment could also trigger a domino effect, in many cases in the offices it is easy to find other pirated software installations.

Another side effect it related to the disabling of system/network functionalities to allow the execution of pirated copies without being discovered, in some cases this could have an impact also on the security setting of the host platform.

Coming back to our case, it is opportune to note that despite the copyright dispute, Apptricity will continue its business partnership with the U.S. Forces.

Pierluigi Paganini

(Security Affairs –  Piracy, US Army)