It's astounding how both sides can claim victory in a bitterly contested, years-long copyright infringement lawsuit. But both Oracle and third-party licensee Rimini Street have managed to do just that.
Oracle claimed victory and a $50 million judgment against the third-party consulting firm over misuse of its licensed software. Rimini Street, the consulting firm, claimed victory for its customers and the free market because the court ruled that it is lawful for Oracle licensees to purchase third-party support if they choose to do so.
Following its Oct. 22 federal jury trial judgment against Rimini Street in Las Vegas, Oracle asked Judge Larry Hicks to issue a permanent injunction against the Las Vegas-based company that would restrain it from continuing to resell Oracle services as a third-party vendor.
Oracle claimed, and the Las Vegas jury held that Rimini and CEO Seth Ravin built a business through pervasive and unauthorized downloading and copying of Oracle software and support materials. The jury reached its verdict on Oct. 13 following a three-and-a-half-week trial and subsequently awarded Oracle $50 million in damages—down substantially from the $246 million Oracle originally had requested.
Rimini Street: Third-Party Support for Oracle Customers
Up until July 2014, Rimini Street previously offered its Oracle PeopleSoft, JD Edwards and Siebel customers the choice of providing Rimini Street with either remote access to development and test environments on client-hosted servers, or providing Rimini Street with copies of their Oracle software to build development and test environments on Rimini Street-hosted servers.
Judge Hicks first ruled in February 2014 that Rimini Street infringed copyrights on Oracle's PeopleSoft enterprise resource planning (ERP) software while it was providing third-party support to Oracle customers for less cost than what Oracle's service division charges. Judge Hicks also specified that when Rimini Street installed unlicensed copies of PeopleSoft on its systems so it could create software updates for customers, it violated Oracle copyrights.
In accordance with the ruling, which was backed up by another court ruling in August 2014, Rimini Street said it ceased the use of Oracle software on its servers and transitioned to a remote-access connection service model for all clients by July 2014.
What the Jury Found
In summary, the jury on Oct. 22 found for Oracle that:
--Rimini Street infringed Oracle's copyrights for every product line at issue in the case: PeopleSoft software and documentation, J.D. Edwards software and documentation, Siebel software and documentation, and Oracle Database software.
--Rimini Street owes damages for infringing every copyright registration put to the jury, totaling 93 different copyrights.
--Rimini Street is liable for more than $14 million in damages for violating both the California Computer Data Access and Fraud Act and the Nevada Computer Crimes Law.
On the other side of the case, Rimini Street claimed the following:
--Detailed testimony and evidence provided by Oracle executives and witnesses in the trial confirmed that third-party support is lawful for Oracle licensees to purchase.
--Third parties such as Rimini Street can legally offer third-party support options to Oracle licensees; support services can be provided to clients using a remote-access connection.
--Jury found Rimini Street infringed on Oracle's copyrighted products, but found the infringement "innocent." In determining "innocent infringement," the court instructed the jury that "an infringement is considered 'innocent' when the defendant has proved both of the following elements by a preponderance of the evidence: 1. The defendant was not aware that its acts constituted infringement of the copyright; and 2. The defendant had no reason to believe that its acts constituted an infringement of the copyright.
--The jury found that Oracle suffered no lost profits as a result of "innocent" infringement.
--The jury found violations of some computer access laws.
--The jury rejected Oracle's claims for punitive damages.
What the Permanent Injunction Would Entail
"Testimony at trial made clear—and the jury's verdict confirmed—that without copyright infringement and illegal conduct, Rimini Street never would have gotten off the ground and grown its business," an Oracle spokesman said. "Oracle's motion filed (Oct. 22) requesting a permanent injunction explains that a permanent injunction is warranted to address Rimini's many years of copyright violations and its attempts to cover up those violations."
Rimini's attempts to hide its misconduct from Oracle, customers, investors and the court were the subject of hours of trial testimony, Oracle said. For example, prior to trial, Rimini denied in court filings that it maintained its own unauthorized library of Oracle Software. In fact, the court found that Rimini had created and then improperly destroyed the library, and the court sanctioned Rimini for this unlawful destruction of evidence, Oracle said.
"Likewise, prior to trial, Rimini repeatedly denied creating updates and fixes in one customer's software environment and then delivered those updates and fixes to other customers," the Oracle spokesman said. "Under the court's rulings, those activities are a violation of Oracle's copyrights. On cross-examination at trial, Ravin was forced to admit these violations happened 'all the time.'"
"While Rimini has been attempting to spin this loss as a small matter involving a purportedly "innocent" misunderstanding between competitors, it has been conspicuously silent about the fact that the jury found that both Rimini and Ravin violated a California statute that bars computer fraud and a Nevada statute that punishes computer crimes. In doing so, the jury found that Rimini and Ravin engaged in intentional misconduct," Oracle said.
The ball is now in Rimini Street's court as to any further legal action.