Oracle files $7m copyright claim against NEC's US limb over 'unreported royalties' from database distribution

Subsidiary kicked out of Big Red's friend OPN club following audit

Oracle is seeking more than $7m in damages from long-time software partner NEC Corporation of America (NECAM) – a subsidiary of tech Japan-based tech giant NEC Corp – over a complaint about copyright and breach of contract.

According to papers lodged yesterday with the US court in the Northern District of California, in December 2019 Oracle carried out an audit of NECAM's use and distribution of its database software.

Although NECAM has been a member of the Oracle Partner Network (OPN) since 2004, the audit found issues related to "unreported royalties."

A letter sent by Oracle in October 2020 called on NECAM to "resolve the compliance findings within 30 days."

This was followed up with a letter from Oracle dated 19 January 2021, telling NECAM that due to its failure to resolve the audit findings, Oracle considered "NECAM to be in material breach of its agreements with Oracle."

According to court documents, matters came to a head in March when Oracle sent another letter terminating NECAM's OPN membership and its 2018 Master Distribution Agreement (MDA).

Now the dispute has been brought before a judge as Oracle seeks redress.

"Oracle has repeatedly asked NECAM to resolve the audit compliance findings, but NECAM has not done so. To date, NECAM has not paid the full license and support fees NECAM owes for its distributions of Oracle software," Oracle alleged in its complaint [PDF].

It went on:

As a long-time member of the Oracle Partner Network and Oracle software licensee, NECAM has been, or should have been, aware of the existence of Oracle's copyrights in the Oracle Database and the Database Options and Packs.

On information and belief, NECAM also knew it did not have the appropriate license or authorization to distribute and use the Oracle Database or the Database Options beyond the uses for which it had a license.

When Oracle brought the unauthorized use to NECAM's attention, NECAM declined to procure the necessary licenses and continued to infringe Oracle's rights in its copyrighted software. NECAM is therefore a wilful infringer of Oracle's copyrights and exclusive rights and subject to treble damages.

Both Oracle and NECAM were contacted for comment but neither had responded at the time of writing. ®