IP Law Daily, COPYRIGHT—N.D. Cal.: Software company appears to meet Cox test in fact, if not by name, (Aug 13, 2026)

By Matthew Hersh, J.D.

The company alleges that a competitor induced its customers to infringe by distributing copyrighted software after its license to do so expired.

A software company adequately alleged that a competitor contributed to its users’ infringement of software code because it embedded that code without a license into software that it then distributed to those customers, the District Court for the Northern District of California has held. The court, in rejecting the competitor’s motion to dismiss, applied a now-superseded legal test for contributory infringement—but its findings would likely have led to the same conclusion under the current test (Actian Corp. v. Leica Geosystems, Inc., No. 26-cv-00977-NC (N.D. Cal. Aug. 10, 2026)).

The lawsuit involves software for use in commercial laser scanners. Actian Corporation, a division of HCL Software, develops and licenses data management software used in various business applications. Leica Geosystems has long used that software as an embedded component in its own software products, among them software used for the Cyclone line of 3D laser scanners. For many years, Leica distributed that product under a license with Actian. After earlier disputes over Leica’s use of the software, the companies entered into a March 2024 settlement agreement that replaced their prior licensing arrangement with a subscription set to expire in September 2025.

Actian brought this lawsuit against Leica in early 2026, alleging that Leica continued to distribute Actian’s software even after the license had expired. The complaint brought a number of claims against Leica, including breach of contract, unfair competition, and direct and secondary copyright infringement. Leica moved to dismiss the secondary infringement claims, leading to this opinion.

Contributory infringement. The court found that Actian stated a claim for contributory infringement. The court evaluated the claim under the test that has long prevailed in the Ninth Circuit, which asks whether a plaintiff has plausibly alleged that the defendant had knowledge of a third party’s infringement and “either induces, causes, or materially contributes to the infringing conduct.” The complaint passed that test, the court found. Actian adequately alleged that Leica materially contributed to its customers’ infringement, the court found, by distributing Actian software beyond the expiration date of the license. Moreover, Actian adequately alleged that Leica had knowledge of its customers’ infringement, the court found, by alleging that Leica “knew it was selling products, without authorization, which contained [Actian’s] copyrighted software.”

The court’s analysis was perhaps striking because it did not take into account recent Supreme Court precedent—although the outcome would likely have been the same either way. In Cox Communications, Inc. v. Sony Music Entertainment, which the Court issued in March of this year, contributory infringement requires either that a defendant “affirmatively induced” the infringement or “sold a service tailored to infringement.” The court’s reading of the complaint nevertheless appears consistent with liability under Cox. For one thing, in finding that Actian adequately alleged knowledge of its customers’ infringement, the court noted that Leica “[had] not argued, and the Court is not convinced, that third parties can utilize [Actian’s] copyrighted software for substantial non-infringing uses.” Moreover, in addressing the material contribution prong, the court found that Actian adequately alleged that Leica “took active steps to encourage direct infringement.” Thus, the Cox test appears likely to have been satisfied under the pleadings, even if not by name.

Vicarious infringement. The court also found that Actian adequately alleged vicarious infringement. To succeed in imposing vicarious liability, the court noted, a plaintiff must establish that the defendant exercises the requisite control over the direct infringer and derives a direct financial benefit from the infringement. Actian’s complaint met both thresholds. Actian alleged that Leica’s software license agreement provides that it has “the right to supervise customer usage and licenses” and that Leica can “control the content and materials available on its own website,” the court observed—allegations that “sufficiently state that [Leica] has a legal and practical ability to stop its users from either purchasing its products with the infringing software or continuing to use the infringing software.” Moreover, Actian alleged that Leica marketed its product as “an integral part of many users’ workflow due to its unparalleled ability to handle massive datasets and complex registrations”—sufficient, the court found, to allege that the infringing material is “a draw for customers.”

The Case is No. 5:26-cv-00977-NC.

Judge: Cousins, N.

Attorneys: Ryan Ephraim Hatch (Hatch Law PC) for Actian Corp. David W. Ammons (LTL Attorneys, LLP) for Leica Geosystems, Inc.

Companies: Actian Corp.; Leica Geosystems, Inc.

Cases: Copyright CaliforniaNews