July 17, 2012, 3:20 PM — A large auto insurance provider has become embroiled in a court battle with Pitney Bowes, alleging that the software vendor claims a 20-year-old license agreement between the companies has been significantly misinterpreted and that a significant additional amount of money is owed.
Progressive Casualty Insurance Co. signed a site license in 1991 for some applications then sold by LPC, which was later acquired by Pitney Bowes, according to the lawsuit filed last week by Progressive in U.S. District Court for the Northern District of Ohio, Eastern Division.
The set of applications "assists in finalizing mailing addresses of existing and potential customers, among other functions," the suit states.
The companies later entered into a pair of supplemental agreements in 1991 and 2001. The first "expressly designated an installation site for the operation of the software," a building in Ohio, according to the suit.
Progressive was running a number of mainframe computers there, with two mainframes generally hosting the software, it adds. The 2001 supplemental agreement added a second installation site. The original site was subsequently retired, according to the suit.
According to the terms of Progressive's license agreement, the company can make copies of Pitney Bowes' software, Finalist and Mailstream, as required to support its use and for archiving and backup, the suit adds.
The companies' 2001 supplemental agreement allowed Internet access to Finalist, according to the suit. Remote access was always a consideration during Pitney Bowes' and Progressive's deliberations, despite the fact that the Internet "was not widespread in 1991," it adds. Instead, Finalist used IBM's CICS (customer information control system) to transmit data remotely, according to the suit.
Today, the Finalist software's CICS functionality uses a TCP/IP protocol with a graphical interface, allowing for data exchange, according to the suit. "Progressive permits remote computers to access a web server at the specific installation site that then communicates with the Finalist software. There is no direct remote access to, or operation of, the Finalist software."
In addition, "Progressive does not use the Internet" in connection with Mailstream, it adds.
Meanwhile, Pitney Bowes put a license key system in place in 2011 on each Progressive mainframe that runs Finalist and Mailstream, according to the suit.
The 1991 pact also set price terms and gave Progressive the option to renew maintenance each year, which would give it access to all updates and bug fixes, according to the suit.
Those terms were tweaked in 2001, enhancing the maintenance service and preserving Progressive's right to renew at agreed price terms, according to the suit.