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Court issues split judgment in Oracle-Rimini Street copyright case

Third-party support isn't necessarily illegal, a judge says. But with some customers, Rimini Street copying Oracle software to its own computers was.

A U.S. District Court judge in Nevada has issued a split judgment in the copyright infringement lawsuit between Oracle and Rimini Street Inc., a third-party software support provider.

The judge ruled that wording in the software licensing agreements between Oracle and two of its customers -- the City of Flint, Mich., and Pittsburgh Public Schools -- prohibited Rimini Street from copying Oracle software onto its own computers for development and support. However, wording in the licensing agreements between Oracle and two other customers -- manufacturer Giant Cement and technology vendor Novell -- did allow the copying of Oracle software by Rimini Street, according to the judge.

The ruling didn't say that third-party software support is illegal; in fact, Oracle has already acknowledged that it's legal for third-party vendors to offer support services. What the ruling did say was that Rimini Street illegally copied Oracle software -- PeopleSoft applications, in particular -- in providing support to Flint and the Pittsburgh school system.

Oracle sued Las Vegas-based Rimini Street in 2010 on charges of copyright infringement, fraud, breach of contract and unfair competition. Rimini Street countersued for anticompetitive practices, and the two have filed court motions back and forth since then. The new ruling, issued last Thursday, involves a small part of the overall case. In addition, Rimini Street is working to migrate all of its customers from an environment it hosts to one hosted by the customers themselves in order to avoid any of the copyright infringement issues addressed in the ruling.

Rimini Street has grown its business largely by providing support to customers running enterprise software from Oracle and SAP that is no longer supported by those vendors. Rimini's support costs are cheaper than Oracle's, and it claims the quality of support is better as well.

Frank Scavo, president of Irvine, Calif.-based IT management consulting firm Strativa, said he hopes the case will help establish rules for how companies like Rimini Street can offer third-party support legally. "Otherwise, the large enterprise software vendors have a monopoly on pricing," he said.

Duncan Jones, an analyst at Forrester Research Inc. in Cambridge, Mass., said his sympathies lie with the customers doing business with vendors such as Oracle and SAP.

"They're paying money for support to a software company at a 1,000% markup when they can get better service from an independent provider for half the price," he said. "It's not in the customer's best interest if the court rules against third-party support."

Oracle issued a press release about the ruling on Monday, with company attorney David Boies calling the decision "an important vindication of Oracle's intellectual property rights."

Rimini Street was drafting a formal response but had not yet released a statement. However, it did send a letter to clients on Monday outlining the lawsuit and Rimini's future plans.

"[In] January 2013, Rimini Street began a project to migrate all existing PeopleSoft, JD Edwards and Siebel Rimini-Hosted Environments to Client-Hosted Environments and discontinue the use of all Rimini-Hosted Environments," the letter reads. "We are continuing this migration, which conforms to the Court's recent ruling."

Mark Fontecchio may be reached at Follow SearchOracle on Twitter and Facebook.

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Do you use third-party software support?
Where I am at currently, we do not use third-party support services, but I have been in an environment where I offered something similar (well, our company did, in any event). we solved these issues by making sure that any infrastructure that was licensed to the customer resided at the customer site, and that we had access to those devices, typically via WebEx connections. If we could not get those agreements to connect (always with the organization's representatives on the call and on the connection with us) we couldn't pledge to offer them the support as the product stipulated. It sometimes made for some interesting games of telephone, in which, typically, they'd agree to give us the access. Duplicating environments for support purposes without securing the additional licensing just seems like a recipe for litigation, so best not go there.