Ncr Corporation V. Korala Associates Ltd

NCR Corporation. v. Korala Associates Ltd., 512 F.3d 807 (6th Cir. 2008)

NCR: Plaintiff and Appellant v. KAL Assoc., Defendant, LTD - Appellee

Background. NCR is a leading ATM and related equipment, hardware, and software producer. NCR developed software applications for Windows operated ATMs (i.e., APTRA XFS) and OS2 operated ATMs (S4i). In 1998, the U.S. based NCR and the Scottish KAL entered into a contractual agreement, which asked KAL to develop and license software components (i.e., Kalypso) to NCR. In order to perform (i.e., to develop the software), NCR NCR loaned one ATM to KAL. However, NCR realized that KAL developed its own new version of the security software for NCR ATMs, which was not part of the contractual agreement.

The Legal Issue. NCR sued KAL, and accused KAL of copyright infringement, common law unfair competition, breach of confidentiality, illegal importation, and tortious interference with contract. According to NCR, KAL illegally reengineered NCR’s ATM machine and accessed proprietary technology to develop the security software illegally. Though tortious counts were the primary reason for NCR to begin the litigation, the focus of the case moved away from the torts counts; hence, it focused on whether the claims would be covered under the arbitration clause of the agreement. Moreover, the court had to decide whether it had compelling subject matter to make a decision on the counts.

Procedural History. In 2004, NCR brought the case to the United States District Court for the Southern District of Ohio at Dayton to seek damages for the allegations against KAL. KAL filed motions to dismiss the case because of the court’s lack of subject matter, forum non-conveniens, and the agreement’s arbitration clause. The court granted the dismissal of the case because of the arbitration clause and NCR appealed the court’s decision. In 2008, the U.S. Court of Appeals (6thCir) affirmed the District