Case Briefs

NCR Corp. v. Korala Associates, Ltd.

Citation: NCR Corp. v. Korala Associates, Ltd. The case was decided in 2008 in the United States Court of Appeals, Sixth Circuit, 512 F.3d 807 (2008). The sixth circuit is located in Cincinnati, Ohio and covers Ohio, Michigan, Kentucky, and Tennessee.

Facts: NCR Corp. brought a suit claiming copyright infringement after Korala Associates, Ltd. (KAL) had developed an ATM security software extremely similar to NCR’s, who develops the ATM’s. After NCR had entered in an agreement with KAL to develop a software for the ATM machines, they loaned KAL a proprietary ATM that contained copyright software. However, after developing the security software, KAL was accused of making unauthorized use of and engaging in unauthorized copying of said software. NCR believed that KAL only created their version of the security software by partaking in this unauthorized activity. After bringing the suit on copyright infringement, KAL moved to force arbitration which were involved in the terms of the contract agreement of 1998. KAL won the trial, but NCR appealed the order of the compelling arbitration.

Issue: Should the dispute between NCR Corp. and Korala Associates, Ltd. be decided by form of arbitration? The essential issues are whether or not this case should be decided by arbitration based on the 1998 contract agreement. The other issue is whether or not KAL actually did infringe upon the copyrights held by NCR.

Decision: The U.S. Court of Appeals for the Sixth Circuit affirmed the district court’s decision compelling arbitration of NDR’s accusations of direct copyright infringement regarding the software.

Reason: The U.S. Court of Appeals affirmed the part of the district court’s decision based on the 1998 contract which consisted of a broad arbitration clause. When dealing with a broad arbitration clause, a court should follow the assumption of arbitration and resolve doubts in favor of arbitration. In such a case, only an express provision excluding a specific dispute, or the most forceful evidence of a purpose to exclude the claim from arbitration, will remove the dispute from consideration by the arbitrators.