Contract analysis

I. Executive Summary This memorandum addresses a dispute between our client, Vantage Mobility Systems Corp. ("VMS"), and Meridian Code Technologies, Inc. ("MeridianCode"), concerning the ownership and exploitation rights in three derivative work software modules — designated DW-001, DW-002, and DW-003 — comprising approximately 47,000 lines of code. These modules were created by VMS software engineers during the inte

1. VMS has colorable but not dispositive arguments for sole ownership of the derivative works, particularly with respect to modules DW-002 and DW-003, which exhibit varying degrees of separability from the ATLAS-RT source code.

2. MeridianCode has the stronger textual argument under Section 7.2 as applied to DW-001, which is deeply intertwined with the ATLAS-RT kernel and most naturally characterized as a "modification" of ATLAS-RT source code.

3. The dispute is not well-suited to an all-or-nothing resolution, and VMS's interests are best served by pursuing a negotiated, module-by-module carve-out as part of the broader dormancy extension and fee restructuring discussions currently underway with MeridianCode.

4. We recommend that VMS adopt a differentiated negotiating posture — conceding joint ownership with limitations on DW-001, asserting sole ownership with a limited license-back on DW-002, and asserting sole ownership with no license-back on DW-003 — while preserving a credible arbitration threat to maintain leverage. The sections below set forth the detailed factual background, contractual analysis, legal analysis, t

II. Factual Background A. The MESLSA and Project Argonaut On June 21, 2022, VMS and MeridianCode executed the Master Embedded Software License and Services Agreement (the "MESLSA"), a comprehensive agreement governing MeridianCode's licensing of its ATLAS-RT™ embedded real-time operating system to VMS for integration into VMS's next-generation adaptive vehicle platforms. The total deal value of the MESLSA is approxim

III. Contractual Analysis — Section 7.2 of the MESLSA A. Text of Section 7.2 The operative language of Section 7.2 of the MESLSA, titled "Derivative Works; Ownership and License-Back," provides in relevant part: "7.2 Derivative Works. Any modifications, adaptations, or extensions to ATLAS-RT source code created by Licensee's engineers during the Integration Period (as defined in Exhibit B) shall be deemed jointly own

Section 7.2 provides that qualifying derivative works "shall be deemed jointly owned by Licensor and Licensee." The MESLSA does not, however, define the specific rights and obligations of the parties as joint owners beyond the specification of MeridianCode's license-back right. Exhibit C elaborates on the license-back but does not address the broader framework of joint-ownership rights, including: (a) Whether either

IV. Applicable Law — Michigan intellectual Property and Federal Copyright A. Choice of Law — Michigan

Section 13.1 of the MESLSA contains a governing law provision selecting Michigan law as the law governing the interpretation and enforcement of the agreement. The provision reads: "13.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to any choice-of-law or conflict-of-law provisions or rules that would cause the application

V. Technical Assessment — Hargrove Technical Consulting Report A. Scope of Engagement Hargrove Technical Consulting, LLC, based in McLean, Virginia, was retained by Calderwood & Harkness LLP in July 2023 to perform an independent technical assessment of the ATLAS-RT integration work performed under Project Argonaut and the nature of the three derivative work modules (DW-001, DW-002, and DW-003). The engagement was st