Royal Bank of Scotland Group Plc (RBS.L) Settles the BankTrade Copyright Issue with Complex Systems Inc (CSI)

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By Thomas Copeland on August 21, 2014 Financial, Intl News

A United States judge barred The Royal Bank of Scotland Group Plc (RBS.L) to use one of its key software programs for the finance operations of the Bank. This prohibition was made on the bank due to a copyright infringement issue. However, the bank, on August 20, 2014, announced that it has settled the issue with Complex Systems Inc (CSI).

The terms of the agreement have not been disclosed by either of the companies. Nonetheless, Royal Bank of Scotland Group Plc (RBS.L) announced that it will be able to use the BankTrade software program for its finance and trade operations all around the legal entities of the world.

The Royal Bank of Scotland Group Plc (RBS.L), while talking to the press, said that the clients of the Bank are its primary focus and the Bank will do every possible thing to ensure that the clients are happy.

A representative of Complex Systems Inc (CSI) was reached for the comment on this latest news; however, the spokesperson refused to comment on it.

Katherine Forrest, a United States District Judge of Manhattan, issued an injunction in May preventing the bank from using its BankTrade software in future. The injunction gave the bank a period of one year to stop the use of the respective software. Moreover, it ordered the bank to quit processing further finance and trade transactions that would use this very software.

The Royal Bank of Scotland Group Plc (RBS.L) said in court that the software was the heart of the organization; it was the most important feature of the bank’s technical structure. RBS further said that removing BankTrade from the structure of the Bank will hurt its operations.

The lawsuit was filed in 2008 when RBS purchased the LaSalle unit of Bank of America (NYSE:BAC) back in 2007 through a $21 billion deal. The LaSalle unit was using BankTrade system, licensing it from Complex Systems Inc (CSI).

Forrest said in her judgment that the software was to be used by Bank of America (NYSE:BAC) only as the license was extended to that respective bank. It has never been licensed to RBS.

RBS kept using an outdated version of the program to process thousands of transactions of around 2,600 customers in 22 different countries. She ruled that RBS was using the software improperly and thus it was barred from BankTrade’s use.

RBS appealed to the ruling of Forest, keeping the injunction on hold. However, on June 26, 2014, the New York’s second Circuit Court of Appeal denied RBS’s request.

Coming to the stock price of The Royal Bank of Scotland Group Plc (RBS.L), the Bank, on the last trading day, August 20, 2014, started its stocks at a price of £359.70 and closed at an increased price of £359.90. As far as the 52 week high and 52 week low of the Bank is concerned, the numbers are recorded to be around £291.60 and £387.50 respectively. The bank has a market capitalization of £40.81 billion with an EPS of -£0.73.