Royal Bank of Scotland ordered to stop using unlicensed software

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Royal Bank of Scotland ordered to stop using unlicensed software

Given one year to replace "core" system.

A US judge has ordered a unit of the Royal Bank of Scotland Group to stop using a key piece of software for its trade finance business after finding the bank liable for copyright infringement.

US District Judge Katherine Forrest in Manhattan entered a permanent injunction requiring RBS's ABN Amro unit to stop using the BankTrade software within a year, and not to use it to process new trade finance transactions received 60 days from now.

The software's creator, Complex Systems, sought the injuction in a Manhattan court six years ago.

"ABN may not continue benefiting from its blatant and ongoing infringement simply because stopping that infringement will be disruptive to its business," Forrest wrote in her decision.

The ruling could cause major headaches for RBS's trade finance business, which generated £295 million (A$531 million) last year, according to its annual report.

ABN, now called Royal Bank of Scotland NV, had in court characterised the BankTrade software as a "core" feature of its technical platform and said removing it would be like cutting out the system's heart.

An RBS spokeswoman did not immediately respond to a request for comment. Jeffrey Kaplan, a lawyer for Complex Systems, had no immediate comment.

The litigation stemmed from ABN Amro's US$21 billion sale in 2007 to Bank of America of LaSalle Bank and an information technology unit that had been licensing BankTrade from Complex Systems.

Forrest said the license went to Bank of America, but RBS kept using the software, and a now-outdated version had become a deeply embedded component of a platform used in 22 countries by more than 2600 clients, processing thousands of transactions a week.

The judge ruled back in March 2013 that ABN Amro was using BankTrade software improperly. In imposing an injunction, she said she was unable to calculate damages to Complex Systems, which earns about US$18 million to US$20 million in annual revenue.

RBS is expected to appeal the ruling. A hearing before Forrest is scheduled for June 5.

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