Glencore defeats partner's software licence challenge

Glencore has successfully beaten a legal bid by IT partner and software vendor Ventyx to extract additional license fees out of the mining giant.

Ventyx (formerly Mincom) had accused Glencore of understating its employee headcount in its annual submission to Ventyx, which the firm used to determine its yearly enterprise licence payment for the Ellipse toolset.

Ventyx signed a deal with mining company Xstrata - which was bought out by Glencore in May 2013 - for the use of Ellipse across Xstrata's copper division and 39 of its affiliates in 2007.

Xstrata also made provisions for the software vendor to be notified and remunerated for any new additions to the business group.

Glencore took over management of Xstrata's Queensland copper operations following the 2013 acquisition, sacking executives and transferring staff elsewhere in the firm, before shifting day-to-day control over to its Swiss headquarters.

As a result, Ventyx went to the mining giant with a claim for expanded licence fees to cover employees of the Glencore copper division that took over Xstrata.

It argued that under the terms of the 2007 contract, Glencore was now an affiliate of Xstrata and thus was liable to add its copper division headcount to the licensing structure.

But Queensland judge Philip McMurdo yesterday sided with Glencore and ruled it would not have to pay the extra fees Ventyx was lobbying for.

He rejected Ventyx’s claim that Glencore’s copper division had merged with Xstrata as per the contract’s definition of an affiliate. Rather, he concluded, the Xstrata copper division had been effectively dismantled by the actions of Glencore’s Swiss management.

He acceded to Glencore’s demands for a formal statement confirming the company was not liable to pay for Ellipse licences for Glencore employees.

The ruling means Ventyx will still be paid by the Xstrata affiliates and remaining Xstrata users under the continuing deal, but will not be able to recoup fees from Glencore staff who, Judge McMurdo was at pains to point out, do not use the Ellipse product any way.