Rimini Street: Dispute with Oracle is contract law, not copyright

Ninth Circuit panel urged to throw out injunction on software support biz

The latest installment of the years-long legal battle between software support company Rimini Street and Oracle was acted out in the US Ninth Circuit court yesterday.

In a ruling issued last October, Rimini Street was fined £27.7m for infringing Oracle's copyright and slapped with an injunction banning Rimini from accessing non-public parts of Oracle's websites, downloading its software or providing any of Big Red's software to its customers.

The case hinges on Rimini Street's 2010 decision to host Oracle software on its own servers, as well as "cloning" that software and making it available to multiple customers.

In October 2015, the company was fined $50m for improperly downloading and using Oracle's copyrighted software, as well as a further $46.2m in attorney's fees.

The smaller company accepted some of the charges against it, saying it will pay $35.6m for "innocently infringing the software", but appealed against the rest following the October 2016 judgment.

Oral arguments in the case were heard by three judges in the Ninth Circuit yesterday, where Rimini's lawyer Mark Perry argued that the case should come under contractural – not copyright – laws.

Perry said that a "single fundamental error infected and pervaded the entire copyright case", arguing that Rimini should have been allowed to copy the software for its clients, as they had paid licence fees.

He said that those licensing agreements allow third parties to create a testing and development environment that help companies provide support, updates and fixes for their customers.

Without being able to do this, Rimini Street is prevented from carrying out its responsibilities to its own clients, Perry added.

He argued that Oracle had surrendered its exclusive rights to copying, and that Rimini had permission to copy the software – instead the issue was with the environment that it created and how that environment was used, and on which server it lived.

"Cross-use and hosting are contract law," Perry said. "Those are licence disputes... and ought to be resolved as matter of contract law and not copyright law."

The injunction, Perry said, "goes so far beyond the licence".

It restricts Rimini Street's access to the source code – which he described as a First Amendment violation – and prevents the company using any software learnings from one client for the benefit of another, which prohibits "the mental processes" of engineers, he said.

Paul Clement, representing Oracle, said that many of Perry's arguments were not made during earlier hearings.

Clement then focused on the large-scale nature of the downloads, saying that mass copying is a copyright infringement, and that nothing in the licences "remotely authorised" Rimini Street to have thousands of copies on their own servers.

"They can't make a testing environment on their own servers," he said.

However, judge Michelle Friedland asked Clement why the injunction was necessary as Rimini Street appeared to be taking steps towards complying.

Clement said "the history of the case" made it necessary because Rimini Street had made misrepresentations to Oracle and to the courts, and that it would allow Rimini to be held in contempt in the future.

The case was taken under submission. ®

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