Oracle, Redwood Shores, Calif. (Jason Doiy)
Boies, Schiller & Flexner and Bingham McCutchen scored a partial win late last week for Oracle Corp. in its copyright battle with Rimini Street Inc., a smaller rival that offers low-cost support to Oracle customers. While Rimini is admitting defeat on some points, it said that ruling doesn’t fundamentally undermine its growing business model of third-party software support and maintenance.
In a 29-page ruling issued on Thursday, U.S. District Judge Larry Hicks in Las Vegas ruled that Rimini Street infringed Oracle’s copyrights in the course of offering support to users of Oracle’s PeopleSoft business management software. Hicks refused to grant Oracle summary judgment on some of its other copyright infringement claims, however, ruling that a jury ought to hear Rimini Street’s defenses.
While Oracle is best known for its business software, it derives substantial revenue by selling software updates to existing customers. Since its founding in 2007, Rimini has offered software updates to Oracle customers for less than what Oracle charges. Rimini’s CEO, Seth Ravin, previously helmed a similar vendor called TomorrowNow, which SAP AG acquired in 2005. Oracle sued TomorrowNow and SAP for copyright infringement in 2007. A jury awarded Oracle $1.3 billion, but the trial judge threw out the verdict. SAP settled the case in 2012 for $306 million plus attorney fees, but the parties reached an unusual agreement that allowed Oracle to appeal the trial judge’s ruling. That appeal is pending.
Oracle’s lawyers, including Boies Schiller’s David Boies, sued Rimini Street and Ravin in 2010, alleging that they had unlawfully copied Oracle’s software in order to formulate software updates. The compliant accused Rimini Street of duplicating TomorrowNow’s “massive theft” and “illegal business model.”
Rimini Street admitted that it copied Oracle software, but the company argued that it could avail itself of its customers’ licenses and therefore escape any liability for infringement. In 2012, before Hicks ruled on the merits of Oracle’s claims, Rimini Street phased in a new approach to offering third-party support that it says avoids the alleged infringement. Rimini Street and Ravin are represented by a trio of firms—Shook Hardy & Bacon; Greenberg Traurig: and Lewis & Roca.
In Thursday’s ruling, Hicks analyzed representative licenses and concluded that Rimini Street’s copying of PeopleSoft constituted infringement. The judge told Oracle that it will need to convince a jury that Rimini Street infringed copyrights on two other Oracle software products, J.D. Edwards and Siebel.
Oracle has also alleged unfair competition and unjust enrichment, among other claims. Rimini Street has counterclaimed for causes of action including copyright misuse. None of those claims are affected by Thursday’s ruling.
The ruling is “an important vindication of Oracle’s intellectual property rights,” Boies said in a statement. He added that Oracle “look[s] forward to holding Rimini Street and Seth Ravin accountable at trial for the damages caused by their misconduct.”
In a letter to customers obtained by ZDNet, Ravin said that the ruling will have a minimal impact on the company’s clientele. “This case is NOT about the legality of independent enterprise software support,” Ravin wrote. “Competitive motivations aside, this case is primarily about the specific processes Rimini Street used to support a portion of its clients.”