Teragram Corp. v. Marketwatch.com involved a contract dispute arising from a software licensing agreement that covered Teragram’s “Entity Extraction Software” and “Summarization Software.” Teragram sued Marketwatch.com, Inc., a.k.a. "ScreamingMedia," for breach of contract. It sought damages, representing the annual licensing and support fees for the first two years of the three-year contract; ScreamingMedia counterclaimed that Teragram misrepresented its products and was itself in breach of contract, thus excusing ScreamingMedia from its payment obligations.
The district court issued judgment in favor of Teragram anent the Summarization Software, but limited Teragram's damages award to the amount of one year's licensing and support fees for that product. The court also entered judgment in ScreamingMedia's favor with respect to the Entity Extraction Software, awarding nominal damages of $1.00. Both parties appealed.
ScreamingMedia faired no better with the First Circuit than it did with the trial court regarding the Summarization Software. That’s probably because ScreamingMedia admitted that it paid Teragram nothing at all for the software. Nor did it timely notify Teragram of any material failure of the Summation Software.
As for the other software, the First Circuit again affirmed the district court’s findings. It held that ScreamingMedia had properly notified Teragram of a material failure of the software, and that Teragram was entitled to no more damages than awarded by the district court.
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