Augusta Software Design Inc. v. Shepard's/McGraw-Hill Inc.
Published: Nov. 2, 2000 | Result Date: May 30, 2000 |Case number: 96CV6977 Verdict – $0
Judge
Court
Denver District
Attorneys
Plaintiff
Defendant
Facts
ShepardÆs, formerly a subsidiary of McGraw-Hill, Inc., is a publisher of business and legal materials, including
software products concerning tax issues. Augusta Software Design Inc. is a small business formed by Denver
CPA Bob Fowler for the purpose of developing software for publication by ShepardÆs.
During 1995, Augusta and ShepardÆs entered into four contracts through which Augusta agreed to develop
four software products for ShepardÆs in exchange for the payment of royalties on ShepardÆs sales of these
products. During that same year, ShepardÆs allegedly asked Augusta to begin work on a fifth product, the
Windows EPS Conversion product, which Augusta did. However, before the parties entered into a written
contract, ShepardÆs decided not to go forward with this fifth product.
Each of the four contracts between the parties contained the following provision, with only minor differences in
royalty rates: As full payment to the author, ShepardÆs shall pay to the author the following royalties: . . . Sale
of Rights . . . (3) Except as otherwise provided in Section 6.a (1-2), inclusive, 10% of ShepardÆs receipts from
the sale, assignment, or licensing to others, including any affiliate of ShepardÆs, of any rights to the Program or
any part of the Program.
In late 1995, McGraw-Hill Inc. sold a division of ShepardÆs, including all of that divisionÆs assets, to Thomson
Legal Publishing, Inc. As part of this sale, all rights were sold to Thomson.
Augusta claimed that under the language of the Sale of Rights provision of the contracts between the parties,
Augusta was entitled to a royalty on ShepardÆs sale.
Other Information
As a result of Shepard's appeal, Augusta's judgment was reduced by $88,880.
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