## Facts

- Kepner-Tregoe, Inc. (K-T) marketed management training programs and held exclusive worldwide rights under a 1972 license to copyrighted training materials co-authored by Victor H. Vroom (the Vroom-Yetton model).
- The license paid royalties to the authors and reserved to Vroom non-assignable rights to use the licensed materials for his “own teaching and private consultation work.”
- In the mid-1980s, Vroom developed a software-based program, “Managing Participation in Organizations” (MPO), that partially overlapped with the licensed materials.
- Vroom used MPO and related Vroom-Yetton content in executive education seminars for paying groups at Yale and other institutions.
- Vroom assigned rights in MPO to Leadership Software Inc., a company he helped found to market the program.
- K-T previously sued Leadership Software and a co-founder in Texas; that court found infringement based on MPO sales.
- In a later Connecticut bench trial against Vroom, the district court found Vroom exceeded the scope of the “teaching” reservation, breached the license by both use and assignment, and willfully infringed after learning of the Texas infringement ruling.
- The district court enjoined further violations and awarded $219,855.21, including maximum statutory damages for willful infringement and contract damages reflecting K-T’s Texas-litigation costs, plus attorney’s fees.

## Issues

1. Whether the license’s “teaching and private consultation” clause permitted use of the licensed materials in executive education seminars conducted in university settings.
2. Whether Vroom’s conduct supported findings of breach of contract and willful copyright infringement.
3. Whether defenses such as acquiescence by K-T or public-domain status defeated liability.
4. Whether awarding both statutory copyright damages and contract damages for Texas-litigation costs constituted impermissible double recovery.

## Decision

- The Second Circuit affirmed the judgment for K-T.
- The court upheld the interpretation of the “teaching” clause as limited to traditional academic instruction of enrolled students, not fee-based executive seminars.
- The court affirmed findings that Vroom breached the agreement by using the materials beyond the reserved scope and by assigning rights despite the reservation being non-assignable.
- The court affirmed willfulness based on Vroom’s continued use after a related judicial infringement determination.
- The court held the damages award proper and non-duplicative: statutory damages addressed infringement, while contract damages addressed separate losses caused by breach (Texas-litigation expenses).

## Legal Principles

- When a contract term is ambiguous, courts may consider extrinsic evidence, including negotiations and course of dealing, to determine the parties’ intent.
- A reserved “teaching” right in an exclusive training-materials license may be construed to cover bona fide academic teaching of enrolled students, while excluding commercial executive training even if conducted at a university.
- A licensor may recover for both breach of contract and copyright infringement arising from the same relationship where the claims address different wrongful acts or distinct injuries.
- Continued exploitation of copyrighted materials after notice of an adverse infringement ruling in closely related conduct can support a finding of willful infringement and justify enhanced statutory damages.
- An award combining statutory copyright damages and contract damages is not an impermissible double recovery when each component compensates a different harm.

## Conclusion

The court held that Vroom’s executive seminar use and assignment of overlapping materials exceeded a narrow, non-assignable “teaching” reservation, supporting findings of breach and willful infringement and permitting separate statutory and contract damages without double recovery.


Kepner-Tregoe, Inc. v. Vroom, 186 F.3d 283 (2d Cir. 1999)