National Credit Union Foundation Sued for Copyright Violations

A federal lawsuit accuses the National Credit Union Foundation of alleged copyright infringement and digital copyright law violations of a poverty simulation product owned by the Missouri Community Action Network, a Jefferson City-based non-profit organization that serves and advocates for low-income families.

Gigi Hyland, executive director of Madison, Wis.-based NCUF, declined comment, citing the foundation’s policy that prohibits her from publicly discussing pending litigation.

Filed in U.S. District Court in Kansas City in June, MCAN’s lawsuit said it purchased the copyright and all other rights to a welfare simulation kit product, Community Action Poverty Simulation, or CAPS. The program simulates the circumstances of different type of families who live in poverty, which enables participants to experience the harsh financial challenges the families face and what steps they may take to address these problems. MCAN said the kit has been used by corporations, customer service groups, educators, religious congregations, community organizations, elected officials, health care professionals and social service agencies.

In 2011, 2012 and 2013, NCUF inked license agreements with the Missouri group that allowed the foundation to use the CAPS kit for credit unions, according to the lawsuit.

In 2016, the foundation officially launched a “Life Simulation” kit to help credit union professionals experience the financial struggles of low-income members and to facilitate the development of products, services and resources to help these members, according to an April 26, 2016 CU Times article. An NCUF spokesperson said the foundation was previously using a Missouri organization’s simulation version, but that the foundation “customized the experience more for credit unions, made it bigger and better, which is the new kit.”

Earlier this year, MCAN said it became aware of NCUF’s Life Simulation kit and alleged that the foundation created, without permission, a derivative product that was copied from the CAPS kit, according to the lawsuit.

NCUF sells its Life Simulation kit on its website for $2,700, according to the lawsuit. MCAN sells its CAPS kit for $2,150.

The lawsuit claims NCUF produced and is currently reproducing all or some constituent elements of CAPS without authorization from MCAN. The organization also claimed it has been damaged, and it is entitled to NCUF’s profits as a result this alleged copyright infringement.

The Missouri nonprofit alleged that the foundation removed or altered MCAN’s copyright information on its simulation kit without authorization. The removal of this copyright information violates the Digital Millennium Copyright Act of 1998, according to MCAN’s lawsuit.

MCAN also claimed that the foundation breached its agreement by modifying the CAPS kit and creating a derivative product, Life Simulation, from it.