U.S. District Court rules 'massive theft' of Oracle property

The U.S. District Court in Las Vegas ruled that Oracle's claims of 'massive theft' of property by Rimini Street are true. Rimini Street customers are just waiting for this to blow over.

The latest chapter in the ongoing court case between Oracle and third-party support provider Rimini Street is here. On August 14, the U.S. District Court of Nevada in Las Vegas entered an order granting Oracle's motion for partial summary judgment against Rimini Street and its CEO Seth Ravin for theft of Oracle property.

In January 2010, Oracle sued Rimini Street for, according to documents filed in the U.S. District Court of Nevada, "massive theft of Oracle software and related materials." Rimini Street replied in March 2010 with a counterclaim for defamation and unfair competition, challenging Oracle's allegations of intellectual property theft. Four years later, the court dismissed Rimini Street's counterclaim and stated in Opinion 29 of the lawsuit that Oracle statements "that Rimini Street had engaged in 'massive theft' of Oracle's property are true."

Rimini Street responded with a statement saying, "The rulings relate to Oracle software no longer in use at Rimini Street." The court ruled in February that Rimini Street had infringed on Oracle's PeopleSoft copyright and prima facie copyright infringement for JD Edwards and Siebel copyrights. Most recently, the U.S. District Court of Nevada in Las Vegas extended the charges of copyright infringement to cover Oracle Database, which included downloading 25 copies of Oracle's Database software and possessing over 200 copies of the software.

Rimini Street added that the rulings would cause no interruptions for any client or product line and that they reserve the right to appeal the U.S. District Court of Nevada in Las Vegas' decision. The court has ordered Oracle and Rimini Street to submit a pre-trial order within 60 days.

What we really need is a blueprint for how to do third-party maintenance legally.
R Wangfounder, Constellation Research

Meanwhile, Rimini Street's customers have to decide what this could mean for them. The National FFA Organization has received third-party support from Rimini Street since 2009. Joel Gibbons, director of information technology and compliance, said, "It [the lawsuit] is not affecting our service. We continue to receive excellent service."

Gibbons explained that he knew that Rimini Street was involved in legal action when he decided to switch to Rimini Street's third-party support for PeopleSoft 8.9. Two years ago, the National FFA Organization has had one request for information from lawyers regarding the dispute between Oracle and Rimini Street. Gibbons had to pull all the documentation he had from Oracle and Rimini Street to hand over to the lawyers.

The National FFA Organization switched from Oracle to Rimini Street because of financial difficulties and it needed to cut back its budget. It is currently earning in savings about half the amount of money it previously paid for Oracle service. "It's big enough savings to be worth a little uncertainty," said Gibbons. He added, "The savings was enough for us to live with that [the lawsuit] -- whatever the outcome may be."

As a small organization -- described by Gibbons as a $25 million nonprofit -- the National FFA Organization has no interest in putting in the investment to upgrade past PeopleSoft 8.9. In fact, according to Gibbons, PeopleSoft is beginning to look like "overkill" for the size of his organization and he has a three- to five-year planned end of life for it. Consequently, whatever the results of Oracle and Rimini Street's litigation may be, they won't affect the National FFA Organization for very long. For as long as the National FFA Organization is still using PeopleSoft, Gibbons said, "We have kind of made our choice."

Another Rimini Street client who prefers to remain anonymous explained that his company is "laying low" until the litigation between Rimini Street and Oracle is over, though it remains a happy Rimini Street customer. "Oracle is sabre rattling," the anonymous client said. He explained that "maintenance is a cash cow" for Oracle and it wants to keep its maintenance business. In fact, his company gave Oracle representatives a chance to "meet them half way" regarding maintenance costs, but were turned down. By switching to Rimini Street support, according to the anonymous client, his company was able to go from $440,000 in maintenance expenses yearly to $200,000.

R Wang, founder of Constellation Research Inc., explained that the court case between Rimini Street and Oracle could become about more than just money. It could end up being about the fate of third-party maintenance. "Customers want third-party maintenance," he said. But, he added, "The laws are so murky at this moment. There is no set ruling on third-party maintenance."

The ruling in Rimini Street and the Oracle property case could set the precedent for how third-party maintenance can proceed. To start, according to Wang, we will need to see what the damages are from the case. If the damages are too high, then the existence of third-party maintenance comes into question. However, if the ruling includes not just damages but also a way for third-party maintenance companies to go forward, that changes everything. "What we really need," said Wang, "is a blueprint for how to do third-party maintenance legally. If there are rules, people will follow them."

Next Steps

Take extra care with your software licenses after this court case

Oregon sues Oracle over the failure of the Cover Oregon

Check out the judgment from the last Oracle vs. Rimini Street lawsuit

Dig deeper on Oracle support services

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