Background

• MJL developed iSTAR, a software platform for automotive financing and insurance.
• In 2013, MJL granted exclusive distribution rights to SMI under a Distribution Agreement.
• Disputes led to termination in 2014 and subsequent litigation.

Key Legal Issue

• MJL alleged SMI breached Article 4.6, which prohibited reverse engineering or adapting the software to create a derivative work.
• MJL claimed SMI copied iSTAR’s features and functionalities, integrating them into:
  1. CustomConnect/SimpliFI (Birchwood).
  2. UniFI 2.0 (iA Financial Services, SMI’s parent).
• MJL sought disgorgement of profits under Article 4.7.

Trial Decision

• The judge found no evidence of copying and ruled iSTAR’s features and functionalities were not protected under Article 4.6.
• Software functionality is not copyrightable, and no patent claim was made.
• SMI’s developers denied copying, and MJL’s circumstantial evidence was insufficient.

Appeal Decision

• Appeal dismissed; trial judge’s findings were upheld.
• MJL failed to prove SMI copied iSTAR’s features.
• $50,000 in costs awarded to SMI.