UPDATE 1-U.S. judge orders RBS unit stop using software in copyright case

Fri May 9, 2014 5:24pm EDT

(Adds quote from Complex Systems, later court filing, paragraphs 6-7)

By Nate Raymond

NEW YORK May 9 (Reuters) - A U.S. judge ordered a unit of Royal Bank of Scotland Group Plc on Friday to stop using a key piece of software used for its trade finance business after finding the bank liable for copyright infringement.

U.S. 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.

"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 a decision favoring Complex Systems Inc, which produces the software and had sought the injunction.

The ruling, which followed six years of copyright litigation, could cause major headaches for RBS's trade finance business, which generated $497 million (295 million pounds) of income last year, according to its annual report.

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

Gad Janay, chief executive of Jersey City, New Jersey-based Complex Systems, welcomed the ruling, saying "the most important thing is they should stop using the system."

An RBS spokeswoman did not immediately respond to a request for comment. In a court filing later Friday, Michael Swartz, a lawyer for ABN, asked the judge to stay the order pending appeal.

The litigation stemmed from ABN Amro's $21 billion sale in 2007 to Bank of America Corp 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Forrest said the license went to Bank of America, but RBS kept using the software, and a now-outdated version had become a deeply embedded component of a platform used in 22 countries by more than 2,600 clients, processing thousands of transactions a week.

The judge had ruled in March 2013 that ABN Amro was improperly using the BankTrade software of Complex Systems, which has about $18 million to $20 million of annual revenue.

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

The case is Complex Systems Inc v. ABN Amro Bank NV, U.S. District Court, Southern District of New York, No. 08-07497.

($1 = 0.5936 British pound) (Reporting by Nate Raymond in New York, editing by Tom Brown)

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