The Inslaw PROMIS software case was a long-running dispute in which a small Washington software company accused the U.S. Department of Justice of stealing an enhanced version of its prosecutor case-management program, PROMIS, and in some accounts sharing it with foreign intelligence services. Inslaw won early in bankruptcy court, lost on appeal, and in 1997 lost again at the Court of Federal Claims, which rejected its claims outright.
What PROMIS Was and Who Owned It
Inslaw began in 1973 as the Institute for Law and Social Research, founded by William A. Hamilton. Its product, the Prosecutor’s Management Information System (PROMIS), was a case-tracking system built for prosecutors and law enforcement handling heavy caseloads.1Justia. United States v. INSLAW, INC., 932 F.2d 1467
The original version of PROMIS was built with public funding, and both Inslaw and the government agreed that this public-domain version belonged to the public. Inslaw later built a second version using its own money, adding proprietary code. The question of who owned that enhanced version sits at the center of everything that followed.1Justia. United States v. INSLAW, INC., 932 F.2d 1467
The 1982 Contract and the Breakdown
In 1982, the DOJ awarded Inslaw a contract worth roughly $9.6 million to install the public version of PROMIS in 20 large U.S. Attorneys’ offices. The dispute began when the DOJ started using the privately funded enhanced version, and the two sides could not agree on whether the government was entitled to those improvements without paying more.1Justia. United States v. INSLAW, INC., 932 F.2d 1467
The DOJ stopped making payments during the dispute. Inslaw, cut off from the contract money, filed for Chapter 11 reorganization in February 1985.1Justia. United States v. INSLAW, INC., 932 F.2d 1467
The Theft and Espionage Allegations
After the bankruptcy filing, William and Nancy Hamilton accused DOJ officials of conspiring to steal the enhanced software, alleging the department used dishonest means to obtain it and then copied and modified the code.
The accusations went further. Inslaw claimed the government inserted a “trap door” into the software that would let unauthorized users reach the data inside, and that this altered version of PROMIS was passed to foreign governments and intelligence agencies for surveillance purposes without the company’s permission.
What Investigators Concluded
The claims drew separate inquiries from Congress and the executive branch, and they reached opposite conclusions. A 1992 House Judiciary Committee investigation found evidence supporting the allegation that the DOJ “took, converted, and stole” the software through trickery and fraud.2GovInfo. Congressional Record – Extension of Remarks – July 29, 1994
The DOJ’s internal reviews, including an independent investigation led by former federal judge Nicholas Bua, found no merit to the conspiracy or misconduct claims.3U.S. Department of Justice. Court of Federal Claims Rejects Inslaw’s Claims
How the Courts Ruled
Inslaw won the first round. In 1987, a bankruptcy court ruled that the DOJ had violated the automatic stay by continuing to use the enhanced software during the Chapter 11 proceeding.1Justia. United States v. INSLAW, INC., 932 F.2d 1467
That ruling did not hold. In 1991, the U.S. Court of Appeals for the D.C. Circuit reversed it, holding that the automatic stay did not reach the government’s continued use of the software in this situation.1Justia. United States v. INSLAW, INC., 932 F.2d 1467
The case moved to the Court of Federal Claims, which in 1997 ruled against Inslaw. The court found that the company had not proven it held ownership rights to the disputed version or that the DOJ had acted improperly, closing out the central legal fight.3U.S. Department of Justice. Court of Federal Claims Rejects Inslaw’s Claims