Rimini Street Countersuit Claims Oracle Waging Anti-competitive Campaign

 
 
By John Pallatto  |  Posted 2010-03-31
 
 
 

Seth Ravin, Rimini Street's president and CEO, says his company's countersuit against Oracle claiming among other things "defamation, disparagement, trade libel and unfair competition" is a sign that Rimini Street is not going to "allow a larger company to simply intimidate us" out of a lucrative market for third-party enterprise application maintenance and support.

Rimini Street announced on March 29 that it has filed a suit at U.S. District Court in Nevada with counter claims that Oracle's own suit filed Jan. 25 was a "misuse" of copyright laws and part of a five-year campaign of escalating tactics to try to "disrupt and halt" Rimini Street's third-party application maintenance business.

Oracle's suit against Rimini Street is virtually a carbon copy of a suit it is pursuing against SAP concerning a now defunct subsidiary named TomorrowNow that provided third-party application maintenance and support for Oracle enterprise applications, including PeopleSoft, Siebel and J.D. Edwards. These software products were originally developed by companies that Oracle has acquired in the past six years.

In both cases, Oracle is claiming the "massive theft" of copyrighted Oracle intellectual property through the illegal downloading of software and support materials. SAP shut down the TomorrowNow's operations after Oracle filed suit. The SAP-Oracle suit is scheduled to go to trial in November 2010, but the trial date has already been pushed back several times. A pretrial settlement conference is scheduled for June 22. Two other earlier settlement conferences have been unsuccessful.

Furthermore, SAP in its response to the Oracle lawsuit admitted that TomorrowNow employees made "inappropriate" downloads of product support information from Oracle's Website, but denied that the information provided SAP with any financial gain or business advantage.

However, Ravin claims that there are major differences between Rimini's situation and the SAP-TomorrowNow case. Ravin, who was also a founder of TomorrowNow as well as a former PeopleSoft executive, said the "reality is we are completely different companies with different processes and procedures," 

The main difference between the procedures of Rimini Street and TomorrowNow is that Rimini says it uses separate data "silos" for each of its clients so that proprietary information or application data isn't shared between customers. Rimini also claims that it is only doing work that its clients authorize it to perform on their behalf. Furthermore, Rimini says it only "delivers Oracle software and support materials to each client who is entitled to receive such materials."

TomorrowNow made some of the same claims, But Ravin said that SAP was in a much more "defensive posture" when Oracle filed suit against it. TomorrowNow "was a small part of SAP's business that they really didn't know it well and they really weren't in a good position to articulate well a defense and they really suffered for that," Ravin said.

SAP, Ravin claimed, "just didn't understand the business that much" and "has a whole host" of other market and competitive issues to deal with, which are much "bigger in terms of their core business."

However, in Rimini Street's case "this is our core business. We know this business very well. We have been in it for years," and that gives the company the resources and the determination to see the case through the courts to its legal conclusion, Ravin said.

"We have grown 270 percent last year with unbelievable pressure from Oracle in the market as well as SAP," Ravin said. "We are very used to swimming upstream, and I think we have done that very well because our customers are very pleased with the service they are getting and the materials we deliver to them." Numerous enterprises, including companies even larger than Oracle, have switched their support business to Rimini Street, Ravin said.

As a result, "there should be no surprise that [Oracle is] going to fight tooth and nail to hold onto this market," Ravin said. Rimini Street is determined to fight for a larger share of that market, and Oracle is "not going to be allowed to use anti-competitive tactics to that are illegal against" his company, he said.

Ravin said the company is working with three law firms in the case, including Wilson Sonsini, which Ravin said has one of the top practices in the nation in technology law, and Greenberg Traurig, which is a top-rated firm in the field of antitrust and intellectual property law.

In its lawsuit, Rimini Street claims that for the past five years Oracle has engaged in "escalating tactics" in an attempt to block the company from providing application support services to its customers. These efforts ranged from "numerous hostile letters" to "intentionally blocking Rimini Street's IP addresses" from accessing Oracle servers. Rimini Street also claimed that Oracle interfered with the company "performing authorized work on behalf of a large client switching to Rimini Street support."


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