Oracle Wins $58M Judgment From Terix

Oracle won a $57.7 million judgment against Terix, a maintenance-support provider, for illegally distributing Solaris software and support.

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A federal judge this week entered a judgment against Terix, an IT maintenance and support provider, stipulating that the company must pay Oracle $57.7 million for unlawfully distributing Solaris software and related firmware.

The judgment comes just about a month after Oracle settled with Maintech, another support services company and co-defendant to Terix, for $14 million. Oracle sued Terix and Maintech in 2013 for illegally distributing copyrighted Oracle software in supporting Solaris users. Oracle obtained ownership of Solaris when it acquired Sun Microsystems in 2010.

In April 2014, Terix filed antitrust and other claims against Oracle that the company attempted to have dismissed. Terix claimed that Oracle was trying to maintain a monopoly on Solaris support. On November 7, 2014, the court ruled that Sherman Act, Unfair Competition and Cartwright Act violations by Oracle would survive the motion to dismiss and remain in the case.

The judgment calls for Terix, along with affiliated companies Sevanna Financial and West Coast Computer Exchange (WEX) to stop distributing Solaris software. Oracle said it has obtained judgments against all defendants totaling more than $71 million.

"Oracle filed this lawsuit to stop the illegal use of its proprietary and copyrighted Solaris software and related firmware, and that is exactly what the judgments entered against Terix, Maintech and their related companies achieved," said Dorian Daley, Oracle's general counsel, in a statement. "Oracle makes enormous investments in Solaris and other Oracle products, so it is essential that we take all appropriate action to protect Oracle's intellectual property. These judgments confirm what Oracle has been telling customers for years—that third-party maintenance firms have no rights to Solaris patches, and that Oracle will take action to prevent the use of its IP and obtain adequate compensation for such unlawful conduct."

Oracle sued the group of third-party maintenance providers for infringing its copyrights in the Solaris operating system by obtaining Solaris patches from Oracle's customer support Website and using the patches to service their own support customers. In the stipulated judgment, Terix, Sevanna Financial and WEX agreed that they will no longer distribute Solaris patches, bug fixes and updates, and that they will no longer tell customers that they have license rights to obtain Solaris patches when they were not on Oracle support.

Indeed, U.S. Magistrate Judge Paul S. Grewal ruled that "Terix shall not give, sell, or otherwise provide to anyone any Oracle/Sun software and/or software support materials, including any updates, bug fixes, patches, media kits, or other proprietary software support materials, and including any patches, bug fixes, or updates to the Solaris Operating System or for firmware on Oracle/Sun hardware, but not including any materials made publicly available by Oracle at the time of such provision by Terix (collectively 'Software and Support Materials')."

In addition, the judge ruled that Terix must allow Oracle to perform an annual audit of its work relating to Oracle/Sun hardware for the next five years. And Terix must maintain complete and detailed records regarding its performance of any and all support services on Oracle/Sun hardware in its customer support record system. Terix also must retain all emails sent to or from its support personnel concerning Oracle/Sun products, and must disclose such records and emails in any audit conducted by Oracle to enable Oracle to determine whether Terix has complied with the terms of the judgment.

In a statement following the judgment, Terix said: "Terix does not sell or resell Oracle support agreements. Terix is not an Oracle partner and is not authorized to resell or provide in any manner Oracle products or services. Any pricing provided by Terix for support services is for third-party support provided by Terix with no affiliation or involvement with Oracle of any kind. Terix has no legal right to provide any Oracle software, bug fixes, patches, updates, upgrades, or licenses for any such software or other product, or any Oracle support materials. Terix is not authorized to provide, distribute or make available any such Oracle software, licensing, or support materials."

The judgment follows a contentious legal battle in which Terix in March filed a motion for sanctions against Oracle for destroying crucial defense evidence and refusing to allow Terix to inspect potential evidence in My Oracle Support (MOS).

In 2011, Oracle took down the SunSolve Website, a database and archive of license documents, click-through agreements, and terms and conditions of use as they existed over time. Terix claimed that in addition to license and agreement terms, statements and data on public Solaris and firmware patch access, information and materials that document Sun practices associated with Solaris prior to Oracle's purchase of Sun in January of 2010 were also destroyed by Oracle.