The revival of the long-running legal battle between Oracle and third-party software maintenance provider Rimini Street is a reminder of the high stakes for partners when it comes to adhering to software licensing terms, two attorneys unaffiliated with the case told CRN USA.
“The message that MSPs should take home is licensing agreements count,” said Bradley Gross, a US-based attorney. “They matter. The wording is important. The context is important.”
“If you’re selling and reselling from an upstream provider, understand the limits of what that upstream partner is providing,” said Gross, whose clients include software developers, MSPs, business process outsourcers, OEMs and VARs.
At the heart of the legal fight between Austin, Texas-based Oracle and Las Vegas-based Rimini Street is whether Rimini can provide third-party support services for Oracle products without violating Oracle’s intellectual property rights. Rimini promises customers support services for Oracle and SAP products at half the vendors’ prices. Rimini is also a Salesforce partner.
In August 2018, Oracle won a permanent injunction against Rimini Street. Oracle has been awarded $90 million from Rimini Street as a result of Rimini Street‘s violations. In April 2019, Oracle asked a federal court to allow re-examination of Rimini Street’s business to make sure it has followed the injunction — and Rimini Street is now pushing for a jury trial in the case.
Oracle and Rimini Street declined to comment to CRN USA.
Michael Goldstein, president of US reseller LAN Infotech, which is not an Oracle partner, told CRN that the major products his company works with are purchased and licensed by clients, meaning they handle the maintenance.
“We take software licensing seriously,” Goldstein said. “If the client doesn’t have the license, they need to buy it. Period. We spend a lot of time understanding our software licensing options and portray that to our clients.”
A March court order in the Oracle-Rimini Street case produced mixed results, with each company claiming victory in dueling press releases.
In the ruling, US District Judge Larry R. Hicks ordered a May 10 hearing for Rimini to argue why it shouldn’t be held in contempt for “clear and convincing evidence” of violating a permanent injunction related to Oracle’s PeopleSoft and J.D. Edwards products.
“Because the Court finds, by clear and convincing evidence, that Rimini is violating the permanent injunction, the Court issues an order to show cause why Rimini should not be held in contempt,” according to the court order.
Hicks also ordered Rimini Street and Oracle to submit a statement of the issues to be tried, a list of facts to be tried, stipulated exhibits, depositions to be offered, witnesses to be called and other pre-hearing material by 20 August.
Rimini still claimed victory in a 1 April press release because the court will allow a jury to decide if Rimini’s enterprise software support Process 2.0 or Automation Framework tools infringe on Oracle’s rights.
On 2 April, Rimini filed documents asking the court to reconsider where it ruled that Rimini did violate the injunction. As Rimini Street puts it, software updates for two of its customers, Campbell Soup Co. and the city of Eugene, Oregon, took place before the injunction went into effect in 2018, so they are not actual violations.
In Oracle’s own press release April 1 on the court’s March ruling, it said Rimini’s “recent statement is nothing more than a convoluted attempt at public relations damage control.”
“By Rimini Street’s reasoning, losing is winning, up is down, and ignorance is strength,” Oracle said in the press release. “Its statement is indeed another attempt at bamboozling its customers into believing its services are a viable, ethical business model. Trying to paint this resounding defeat as victory is the same approach to business and transparency that got them in legal trouble in the first place.”
Oracle and Rimini Street’s fight has gotten to the point where Oracle has dedicated a section of its website dedicated to reasons why customers shouldn’t do business with Rimini Street.
The Oracle and Rimini Street cases have led to important rulings for some third-party companies, said Robert Scott, an attorney at Southlake, Texas-based Scott & Scott LLP who represents mid-market and large enterprise companies in software license transactions and disputes with major software publishers.
The court cases have validated the market for third-party maintenance providers that can beat vendors on price, “provided you’re not treading on the intellectual property rights of the vendor,” Scott said. The cases have also better defined the rules for vendors and third parties, including prohibiting vendors from blocking certain contracts with third parties.
“Before this case went forward, the contours of what a third party could access weren’t clear,” he said.
Oracle and Rimini’s court fight dates back to 2010, when Oracle accused Rimini Street of cross-using licenses — using work it completed for one client for the benefit of another — violating Oracle’s copyrights and terms.
According to a note from investment bank Craig-Hallum Capital Group, Rimini Street spends about US$13 million in litigation expenses per year in non-trial years and about $20 million a year during trial years.
Rimini Street reports it had about 2,500 active clients as of 31 December, up 20.6 percent year-over-year, and generated US$87.8 million in fourth-quarter revenue, up 15.4 percent from the year before.