The 3rd U.S. Circuit Court of Appeals has ruled that the European Space Agency does not have immunity from a breach of contract lawsuit brought against them by a New Jersey-based software company. According to Law.com, the court said on Monday that the Germany-based coalition of 18 nations dedicated to peaceful space research was subject to a 1976 statute that limits the immunity of international organizations.
OSS Nokalva, a software vendor based in Somerset, New Jersey, had an agreement with the space agency to provide software and information and to help it develop its own software. The company had license agreements and software maintenance agreements with the European agency. The agreements, made between 1996 and 2004, said that the agency had "individual, non-transferable and non-exclusive" rights to use OSS Nokalva's programs.
OSS Nokalva filed a lawsuit against the agency in May 2008 in Somerset County Superior Court, claiming that the agency breached its licensing contracts by distributing software to third parties and failing in some instances to pay the New Jersey company.
According to Law.com, the space agency transferred the case to federal court in June 2008 and asked the court to dismiss the case on the basis of immunity under the International Organizations Immunities Act. A Trenton, New Jersey, district judge said that the organization had immunity, but waived it by signing the agreements with the software company.
The 3rd U.S. Circuit Court of Appeals agreed with the lower court's ruling, but for different reasons. They said that the European Space Agency did not have immunity because the International Organizations Immunities Act "should be understood to incorporate a subsequent law, the Foreign Sovereign Immunity Act of 1976." That subsequent law gives immunity to foreign governments from lawsuits in the U.S., except in the case of a foreign government doing business in the United States.