Claiming total success in the litigation, Hewlett Packard Enterprise Company (“HPE”) is seeking an award of almost $18 million in attorneys’ fees against Oracle. Oracle sued HPE in 2016 alleging claims for indirect (vicarious and contributory) and direct copyright infringement, intentional interference with contract, intentional interference with prospective economic relations, and unfair competition. These claims stemmed from Oracle’s allegations that HPE offered illegal updates to customers of Oracle's Solaris operating system as part of a scheme concocted by another company, Terix Computer Co. Inc.
Judge Tigar of the Northern District of California granted HPE’s motion for summary judgment on all claims while denying Oracle’s motion. As the prevailing party in the copyright infringement case, HPE contends that it is entitled to an award of fees. HPE argues that “[g]iven HPE’s complete success in the case, Oracle’s unreasonable and aggressive approach in the litigation, and the need to compensate HPE and to deter Oracle, the Court should grant HPE’s motion and award HPE the reasonable fees it requests.” HPE claims that “Oracle’s litigation tactics also at times crossed the line from zealous to inappropriately hostile and aggressive” pointing to Judge Laporte’s admonishment of “Oracle for its failure to adhere to the Northern District of California’s ‘Guidelines for Professional Conduct’”. According to Judge Laporte:
"The Court is very disappointed by the extreme, unnecessary, overheated rhetoric employed primarily by Oracle, such as its opening salvo—“Time and time again, HPE and its counsel have shown that there is no game they will not play in the pursuit of misperceived litigation advantage ...”—which is followed by phrases such as “blatant gamesmanship,” “knowingly misrepresenting facts in an attempt to slander,” “empty accusations,” “supposed grievances,” “Nonsense” and the like."
HPE’s fee motion also accuses Oracle of being a “serial plaintiff” and an “aggressive litigant that consistently seeks to run its competitors out of the market.” HPE is also seeking attorneys’ fees on the defense of the state law claims arguing that Oracle’s copyright claims and state court claims were intertwined and arose out of a “common core of facts” or “out of the same course of conduct”. According to the motion, “HPE’s counsel spent 25,758.80 hours and incurred nearly $20 million in fees litigating this case to a complete victory, and here seeks $17,879,638.03. This amount reflects a self-imposed haircut, a reasonable number of hours for a case of this complexity, and reasonable hourly rates.”
We will continue to monitor the case, which is Oracle America, Inc. v. Hewlett Packard Enterprise Company, CASE NO. 3:16-cv-01393-JST in the Northern District of California. Check back here for updates. See below if you would like to download the motion.
Oracle has again suffered a legal setback, this time at the Ninth Circuit. In an unpublished opinion issued yesterday, a panel made up of Justices Schroeder, Rawlinson and Lasnik, affirmed a ruling by District Court Judge Laporte, which granted a former Oracle employee, Marcella Johnson’s motion to compel arbitration. Johnson sued Oracle in February 2017 in federal court on behalf of a proposed class of sales employees in a dispute about how Oracle pays its sales team commissions. Johnson claimed that Oracle changed its commission policies resulting in “clawbacks” of previously paid amounts, and that such clawbacks are illegal under California employment law.
Johnson eventually dropped her suit in federal court and filed a class arbitration in San Francisco before JAMS, after Oracle produced an employment agreement with an arbitration provision. However, although employers usually prefer arbitration, Oracle declined to pay its portion of the arbitration fees, instead contending that Johnson had petitioned for arbitration under a provision that had been superseded by a later agreement that explicitly blocked classwide treatment of claims in arbitration. Johnson then moved to compel arbitration, claiming that the arbitrator could decide which arbitration agreement governed. Oracle argued that the decision on which agreement governed was for the district court and not the arbitrator to decide.
The Ninth Circuit rejected Oracle’s argument finding that the agreements provided for either the applicability of the Federal Arbitration Act (“FAA”) or Judicial Arbitration and Mediation Services (“JAMS”) rules. The court reasoned that “[u]nder those rules, issues concerning arbitrability can be delegated to the arbitrator so long as the delegation is clear,” which it found to be so in the Oracle contracts.
Since the case will now be in private arbitration and not a public court of law, Tactical Law will be unable to monitor the case. That is regretful as it would be interesting to learn more about Oracle’s strong-arm tactics with its own sales people. Companies undergoing Oracle audits know how aggressive Oracle sales can be in pushing expensive audit resolution proposals. It is no wonder given the immense pressure that Oracle apparently imposes on its sales team to meet high Oracle sales goals. If you are a company undergoing an Oracle audit, seek experienced legal counsel knowledgeable about California law to assist you in successfully navigating the audit and defeating aggressive Oracle sales tactics.
Third party software services maintenance provider, Rimini Street, scored a victory today before the U.S. Supreme Court against its arch nemesis Oracle. A unanimous Supreme Court, in an opinion written by Justice Kavanaugh, has reversed the Ninth Circuit by ruling that the phrase “full costs” as used in the Copyright Act means only the 6 categories of costs authorized in the general federal costs statute, as codified at Sections 1821 and 1920 of Title 28. Oracle had argued that the word “full” before the word “costs” meant that a court in awarding litigation expenses in a copyright case could award expenses beyond the ones mentioned in Sections 1821 and 1920, such as the costs of electronic discovery, expert witnesses and jury consultants. In rejecting that argument, Justice Kavanaugh reasoned that “[t]he adjective “full” in §505 [of the Copyright Act] therefore does not alter the meaning of the word “costs.” Rather, “full costs” are all the “costs” otherwise available under law. The word “full” operates in the phrase “full costs” just as it operates in other common phrases: A “full moon” means the moon, not Mars. A “full breakfast” means breakfast, not lunch. A “full season ticket plan” means tickets, not hot dogs. So too, the term “full costs” means costs, not other expenses.”
The case is Rimini Street Inc. et al. v. Oracle USA Inc., case number 17-1625, at the Supreme Court of the United States. An interesting read is also Rimini's Third Amended Complaint against Oracle in the Rimini Street II litigation.
Pam Fulmer of Tactical Law