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Oracle-Rimini ruling shows value of your software licensing agreement

Yes, the Oracle-Rimini Street lawsuit is about third-party support, but really it's about the nitty-gritty in your software licensing agreement.

The recent ruling in the ongoing lawsuit between Oracle and Rimini Street should remind all organizations that the details of software licensing agreements are well worth poring over.

Mark FontecchioMark Fontecchio

We've all been told the lawsuit Oracle filed against Rimini Street is about third-party software support. To some extent, that is true, but the legal battle isn't about whether third-party support itself is illegal. Oracle has already acknowledged third-party support is OK; rather, the lawsuit is a debate over what constitutes legal ways of providing that support.

The Feb. 13 ruling by a U.S. District Court judge was basically a split down the middle. The judge ruled Rimini Street was not allowed to copy Oracle software onto its own computers to provide third-party support to two customers. However, with two other customers, the software copying was just fine.

The difference? Wording in the software licensing agreements.

In particular, the agreements between Oracle and two customers running PeopleSoft prohibited Rimini Street from copying software onto its own computers. But according to agreements between Oracle and two other customers running J.D. Edwards and Siebel software, the copying was OK.

Shouldn't your organization strive to have more flexible software licensing agreements?

Let's delve into the details, first with the city of Flint, Mich. An excerpt from the ruling:

"Section 1.2(b) of the City of Flint's license states in pertinent part that '[the City of Flint] may [] make a reasonable number of copies of the Software solely for: (i) use in accordance with the terms set forth herein . . . ; (ii) archive or emergency back-up purposes; and/or (iii) disaster recovery testing purposes.'"

The ruling quoted another part of the agreement saying that the license was "solely for [the City of Flint's] internal data processing operations at its facilities in the [United States]."

The judge found that the above only allowed the city of Flint -- and not Rimini Street -- to copy Oracle software, and only for specific purposes, of which software support was not one. Additionally, according to the agreement, that software could only be used at its own facilities, not Rimini Street's.

Next, let's look at an excerpt from the licensing agreement between Novell and Oracle for Novell's use of Siebel software (I bolded certain parts):

"Under Section 2.1(iv), Oracle granted Novell the right '[t]o reproduce, exactly as provided by [Oracle], a reasonable number of copies of the [software] solely for archive or emergency backup purposes or disaster recovery and related testing."

The ruling also said that "Oracle granted Novell the right '[t]o have third parties install, integrate, and otherwise implement the [software].'"

That is quite different. Whereas Flint had an agreement that severely limited where it could copy its PeopleSoft software, and for what purposes, Novell had an agreement that allowed for a much broader set of uses. As a result, Novell was granted permission to do a lot more with its Oracle software than Flint could do.

Shouldn't your organization strive to have similarly flexible licensing agreements?

Frank Scavo, president of Irvine, Calif.-based IT management consulting firm Strativa, summed it up nicely.

"It goes to say that you should never just sign the vendor's software agreement," he said.

Hear, hear.

Mark Fontecchio may be reached at You can also follow SearchOracle on Twitter and Facebook.

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