Where the licensor of a copyright never terminated its license with a licensee, the licensee is not in breach of the license.
“When Home Depot Canada stopped using Edgenet’s services, The Home Depot, Inc. (the parent) lost the right to a no-cost license and thus could not pass that right to Home Depot U.S.A. The contract called for The Home Depot, Inc., to use Edgenet’s services in both the US and Canada, and the no-extra-cost license granted by §5 of the 2006 contract was contingent on both subsidiaries using Edgenet’s services. Yet Edgenet never asked The Home Depot, Inc., for additional payment after the Canadian subsidiary switched providers. Perhaps Edgenet could have treated the Canadian subsidiary’s defection as breach of contract and revoked the license. Had it done that (which it didn’t), then the $100,000 payment would have become due ‘immediately’ if Home Depot wanted a perpetual license. For the option to take a perpetual license is in §2B of the 2006 contract, not §5, and what the contract requires be done ‘immediately’ is to cease using the taxonomy if the license ends.”
10-1335 EdgeNet, Inc., v. Home Depot, U.S.A., Inc.
Appeal from the United States District Court for the Eastern District of Wisconsin, Stadtmueller, J., Easterbrook, J.