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Oracle, Rimini fight on over copyright-infringement ruling

A jury found support vendor Rimini Street guilty of copyright infringement and awarded Oracle $50 million. But officials from the two companies see the decision in a very different light.

Seth Ravin, CEO of Rimini Street Inc., and Jim Maroulis, managing counsel for Oracle, stood in the same courtroom...

in Las Vegas on Oct. 13 when a federal jury announced its verdict in the latest installment of the five-year-old copyright-infringement battle between Oracle and the third-party support company. But to hear them talk about it, they could have been on different planets.

The U.S. District Court jury found that Rimini Street had infringed copyrights for Oracle Database, PeopleSoft, JD Edwards and Siebel. The Oracle-Rimini Street jury also found the support vendor guilty of violating Nevada Computer Damages and Crimes law and the California Comprehensive Computer Data Access and Fraud Act. It awarded Oracle $50 million in damages, ordering that Ravin be held personally responsible for paying $14 million of the money.

Nonetheless, "we came out of it really well," Ravin insisted. He said that the amount he was going to have to pay Oracle, with insurance, was small. Ravin added that the $35 million owed by Rimini Street was "compensation, not a penalty," because it represented what the jury decreed was the fair market value of the Oracle products the Las Vegas company used outside of its legal rights. Only the $14 million Ravin was required to pay was actually a penalty for violating Oracle's terms of use, he said.

The damages total was also substantially less than the $254.9 million that Oracle was seeking, and the jury ruled that Rimini Street committed innocent infringement, meaning the support vendor wasn't aware that its actions violated copyright laws. A ruling of innocent infringement frequently results in lighter monetary penalties than a finding of willful infringement.

On the other hand, the assessed damages amount was higher than the $10 million that Rimini Street proposed to the jury. "It's not a matter of giving back to Oracle," he said. The $50 million, according to Maroulis, represents "what it would have cost them if they had operated in a lawful manner."

Two ways to go to add up the damages

His company is almost entirely based on infringing on our copyright.
Jim Maroulismanaging counsel for Oracle

Maroulis explained that during the trial, the jury was presented with two methods by which the damages could be calculated. Oracle's expert suggested the "lost-profit" model, where the damages would be calculated based on the amount of money Oracle claimed it lost because of Rimini Street's copyright violations. Rimini Street presented the case for a calculation based on "value of use." The jury chose to use the latter model to calculate the damages, but it came to the conclusion that the value of the software used illegally by Rimini Street was more than the amount calculated by the company. Looking back at the trial, Ravin contended that "most people [in the courtroom] thought Oracle was trying to eliminate Rimini Street as competition." He also said that Oracle tried to establish a narrative around Rimini Street as an "evil company." But the jury rejected that narrative, Ravin asserted. "They found against the Dr. Evil concept," he said.

"It's not cute or funny," Maroulis said in response. "This has to do with protecting intellectual property and jobs." Furthermore, he said, "Oracle has never tried to eliminate competition" -- a claim that Oracle co-CEO Safra Catz testified about at the trial.

Trial ruling five years in the making

The Oracle-Rimini Street legal battle began in 2010, when Oracle claimed that the support vendor had engaged in "massive theft of Oracle's software and related support materials." According to court documents, Oracle alleged that Rimini Street routinely logged in to Oracle's technical support websites using customer credentials, then downloaded software and support materials "in excess of the customer's authorization under its license agreement."

In addition to copyright infringement, Oracle's suit accused Rimini Street of fraud, breach of contract and unfair competition. Over the course of the past five years, Oracle and Rimini Street have traded lawsuits and additional allegations. In a pair of partial summary judgments last year, the federal judge overseeing the case dismissed counterclaims made by Rimini Street, and ruled that it had infringed on Oracle's copyrights for PeopleSoft and Oracle Database. The jury added the JD Edwards and Siebel product lines to the infringement list in its ruling last month.

Oracle calls the $50 million a win. But with the results, I don't think Oracle got what it wanted.
Seth RavinCEO of Rimini Street

Ravin said previously that as of July 2014, Rimini Street had ceased all of its business practices that infringed on Oracle's intellectual property. But after the trial, that didn't stop Oracle from filing a request for an injunction against Rimini Street, with the stated attempt of preventing further instances of copyright violation. Oracle's Oct. 21 court filing asked the judge to order Rimini Street not to reproduce or distribute any PeopleSoft, JD Edwards or Siebel software and related documentation "unless solely in connection with work for a specific customer that has affirmed in writing that the customer holds a valid written license agreement" for the particular product Rimini Street is supporting. Written documentation from the customer authorizing Rimini Street's "specific conduct" would also be required under the requested injunction.

Maroulis said Oracle is pursuing the injunction despite Ravin's earlier claim that Rimini Street had stopped all of its infringing practices, because Oracle executives don't believe him. When the Oracle-Rimini Street case began in 2010, "the way they were characterizing their business was untrue in every way," Maroulis said. "His company is almost entirely based on infringing on our copyright."

Ravin said he doesn't think the injunction could go through according to the rules of the 9th Circuit federal courts, because Rimini Street's intellectual-property violations were ruled an innocent infringement. Even if it did, though, he maintained that the injunction wouldn't force him to change the company's business operations at all. Despite the jury's ruling, he added, Rimini Street is expanding all three of its Oracle support product offerings. "Oracle calls the $50 million a win," Ravin said. "But with the results, I don't think Oracle got what it wanted."

Next Steps

Manufacturer Lydall became a Rimini Street customer to avoid Oracle's forced software updates

Oracle and SAP last year settled a similar lawsuit over third-party support

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