Compliance Source, Inc. v. Greenpoint Mortgage Funding, Inc.

624 F.3d 252, 98 U.S.P.Q. 2d (BNA) 1354, 2010 U.S. App. LEXIS 21445, 2010 WL 4056112
CourtCourt of Appeals for the Fifth Circuit
DecidedOctober 18, 2010
Docket09-10726
StatusPublished
Cited by14 cases

This text of 624 F.3d 252 (Compliance Source, Inc. v. Greenpoint Mortgage Funding, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Compliance Source, Inc. v. Greenpoint Mortgage Funding, Inc., 624 F.3d 252, 98 U.S.P.Q. 2d (BNA) 1354, 2010 U.S. App. LEXIS 21445, 2010 WL 4056112 (5th Cir. 2010).

Opinion

PRADO, Circuit Judge:

The Compliance Source, Inc. and Digital Docs, Inc. (collectively, “Plaintiffs”) appeal the district court’s grant of summary judgment in favor of GreenPoint Mortgage Funding, Inc. (“GreenPoint”) on Plaintiffs’ claim that GreenPoint breached a licensing agreement between the parties. Plaintiffs licensed form-database technology to GreenPoint, and GreenPoint allowed its attorneys, McGlinchey Stafford and Youngblood & Bendalin LLP (“MSYB”), to access and use the technology to prepare loans for GreenPoint. Plaintiffs argue that the district court erred when it found that GreenPoint’s provision of the technology to MSYB did not violate the licensing agreement because MSYB’s use of the technology was “on behalf of and for the benefit of’ GreenPoint.

In addition, GreenPoint cross-appeals the district court’s grant of summary judgment in favor of Plaintiffs on GreenPoint’s counterclaim that Plaintiffs breached a settlement agreement between the parties by pursuing claims other than the sole sublicensing claim left open by the settlement agreement.

Because the licensing agreement expressly prohibited any use of the licensed technology not explicitly permitted by the agreement itself, and because the agreement did not explicitly permit the type of input access that GreenPoint provided to MSYB, the district court erred by granting summary judgment to GreenPoint on Plaintiffs’ claim for breach of the licensing agreement. Accordingly, we reverse and remand to the district court for consideration of GreenPoint’s waiver and statute-of-limitations defenses. On GreenPoint’s counterclaim, however, we affirm the district court’s grant of summary judgment to Plaintiffs, because all of the claims Plaintiffs pursued after the settlement agreement were related to GreenPoint’s provision of the licensed technology to MSYB.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

Compliance Source develops, licenses, and sells mortgage-financing forms to residential lenders. Digital Docs develops, licenses, and supports computer software that prepares residential-mortgage loan documents. Plaintiffs jointly developed form-database technology that allows mortgagees to merge their own transaction-specific information with Plaintiffs’ proprietary forms and prepare customized disclosures, mortgage-loan calculations, and loan documents. 1

*255 In 2002, GreenPoint, a mortgage-financing company, signed a licensing agreement with Plaintiffs to use the form-database technology to streamline its loan-packaging process. Article III of the agreement granted the following licenses to Green-Point:

Section A. Grant of License for Use of Forms. In consideration for [Green-Point]’s payment of the fees referred to herein, Compliance Source hereby grants to [GreenPoint], and [Green-Point] accepts, a non-exclusive, annually renewable license to use Compliance Source’s proprietary electronic files containing computer coded images of the Standard Forms, Modified Standard Forms and Custom Forms developed by Compliance Source and access to the Form Database described herein in strict accordance with the various terms and conditions of this Agreement. Compliance Source understands and agrees that [GreenPoint]’s Originating Lenders will have access to use the Closing Documents for loans which [GreenPoint] is purchasing and to Disclosure Documents and Closing Documents for loans closing in the name of [GreenPoint] through a customized link on [GreenPoint]’s website and hereby consents to this arrangement between [GreenPoint] and its Originating Lenders. Except as specifically provided in this Agreement, [Plaintiffs] have not granted, and [GreenPoint] has not received, a license or any other right to copy, make, use, have made, sell, support, or sub-license the Form Database, or any part thereof.
Section B. Grant of License for Use of Software. Digital Docs hereby grants to [GreenPoint] and [GreenPoint] hereby accepts from Digital Docs a nontransferable, non-exclusive license (the “Software License”) to use the Software Products in a Production Environment at the Customer Site Locations, all in strict accordance with the various terms and conditions of this Agreement. Except as specifically provided in this Agreement, Digital Docs has not granted, and [GreenPoint] has not received, a license or any other right to copy, make, use, have made, sell, support, or sub-license the Software Products, or any part thereof. [GreenPoint] may only use the Software Products for itself. [GreenPoint] may not sub-license the Software Products to third parties.

In exchange, GreenPoint agreed to pay a transaction-based fee for each mortgage it financed using the technology. Article III of the agreement also expressly provided that the agreement did not convey or transfer any ownership interest in the technology to GreenPoint:

Section E. No Ownership or Proprietary Interest Conveyed. [GREEN-POINT] HEREBY SPECIFICALLY ACKNOWLEDGES AND THE PARTIES AGREE: (i) THAT NO PROVISIONS OF THIS AGREEMENT SHALL BE CONSTRUED TO CONVEY OR TRANSFER ANY OWNERSHIP OR PROPRIETARY INTEREST IN ANY STANDARD FORMS, COMPUTER SOFTWARE OR RELATED INTELLECTUAL PROPERTY WHICH IS OR MAY BE SUBJECT TO THIS AGREEMENT, (ii) THAT ALL SUCH OWNERSHIP AND PROPRIETARY INTEREST IS AND SHALL REMAIN THE SOLE PROPERTY OF [PLAINTIFFS]; (iii) THAT [GREENPOINT] WILL NOT ATTEMPT TO REVERSE COMPILE OR REVERSE ENGINEER THE SOFTWARE PRODUCTS, FORM DATABASE OR DOCUMENT ENGINE; AND THAT [GREENPOINT] WILL TAKE ALL STEPS NECESSARY TO PREVENT ANY THIRD PARTY WITH WHICH IT MAY DO BUSI *256 NESS FROM TIME TO TIME FROM DOING THE ACTS PREVIOUSLY MENTIONED IN THIS PARAGRAPH OR FROM OTHERWISE ACTING IN ANY WAY THAT IS INCONSISTENT WITH [GREENPOINT]’S OBLIGATIONS UNDER THIS AGREEMENT.

The agreement restricted third-party access to and use of the licensed technology in four other provisions outside of Article III:

1. Article IV, Section A(3): “The use of the Standard Forms does not imply or grant permission to reproduce or alter them in any manner not expressly stated in this Agreement.”
2. Article IV, Section A(4): “Except as permitted hereunder with respect to Originating Lenders, [GreenPoint] will not use the Standard Forms in competition with Compliance Source.”
3. Article XIII, Section A: “Neither party may resign, assign or pledge its rights or delegate its duties under this Agreement without the other party’s prior written consent. ...”
4. Article XIII, Section J: “Except as expressly provided herein, nothing in this Agreement is intended to confer any right, remedy, obligation or liability upon any person or entity other than the parties hereto and their respective successors and permitted assigns.”

The agreement contained two provisions that expressly granted access to the licensed technology to a party other than GreenPoint. First, Article III, Section A granted “Originating Lenders” limited access to certain closing documents and disclosures through a customized link on GreenPoint’s Web site for loans purchased by GreenPoint or for loans closing in GreenPoint’s name.

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Bluebook (online)
624 F.3d 252, 98 U.S.P.Q. 2d (BNA) 1354, 2010 U.S. App. LEXIS 21445, 2010 WL 4056112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/compliance-source-inc-v-greenpoint-mortgage-funding-inc-ca5-2010.