By Pamela K. Fulmer
As discussed in our previous blogpost, in Rimini I Oracle sued Rimini Street (“Rimini”) in the District Court of Nevada asserting a number of claims including copyright infringement. The court found on summary judgment that the process to provide maintenance services that Rimini used prior to 2014 exceeded the scope of Rimini’s customers’ licenses. The case then went to trial and Rimini lost to Oracle, although the jury did not find that Rimini was a willful copyright infringer. The district court issued an injunction, which was largely affirmed by the Ninth Circuit. Here’s how Rimini described the Rimini I litigation in a recent legal filing.
Rimini sued Oracle in a separate lawsuit in the District of Nevada seeking a declaration from the court that the new Process 2.0 Rimini instituted to provide support & maintenance did not violate Oracle’s licenses. Recently Oracle has attempted to claim in the Rimini I case that Process 2.0 also constitutes copyright infringement and is seeking to hold Rimini in contempt by claiming that Process 2.0 also violates the injunction. Rimini has filed a motion to preclude Oracle from litigating issues involving Process 2.0 in the Rimini I litigation. Instead, Rimini claims that such issues are rightfully decided only in the Rimini II litigation and were not actually litigated in Rimini I. According to a recent Rimini filing:
On May 2, 2017 Rimini filed its Third Amended Complaint in the Rimini II litigation seeking declaratory relief of non-infringement, non-hacking and copyright misuse by Oracle and asserting additional claims against Oracle for intentional interference with contract and prospective economic advantage, violation of the Nevada Deceptive Practices Act and California Business & Professions Code Section 17200 and Lanham Act unfair competition. Presently both parties have brought motions for summary judgment or partial summary judgement, which are pending before the Court.
Existing Rimini customers or Oracle customers thinking of moving to Rimini will find some of the allegations of the Third Amended Complaint quite interesting. For example, Rimini contends that:
In addition to using its audit powers to allegedly harass Rimini customers, Rimini also claims that Oracle seeks to create FUD (fear, uncertainty and doubt) in Oracle customers and to disrupt those customer relationships with Rimini. According to the Third Amended Complaint:
Rimini claims that Oracle’s intentional interference with Rimini’s customers has actually disrupted those relationships, even causing some clients to terminate their maintenance & support agreements or at least decide not to expand their relationships with Rimini:
Oracle customers considering moving their maintenance & support to Rimini should consider strategies for mitigating the risk of support disruptions when negotiating any new maintenance & support agreement. If Rimini’s pleading is correct about Oracle’s tactics and we assume that it is, Oracle customers should also be prepared to receive nasty grams or other communications from Oracle, which seek to create fear, uncertainty and doubt in the heart of the Oracle customer.
For its part, Rimini disagrees with Oracle’s assertions, claiming that its customers have authorized Rimini to access the site and no Oracle authorization is needed. According to a recent Rimini filing:
If Oracle wins this argument, Oracle customers who use Rimini for support may face significant risk and could be forced to return to Oracle for support. That of course could be a nightmare scenario as clients returning to Oracle may encounter steep price increases for annual maintenance & support under Oracle’s existing policies.
Pamela K. Fulmer
Tactical Law will continue to monitor the litigation. Please check back for periodic updates.
By Pamela K. Fulmer
On April 8, 2020 Tuscany Suites, LLC (“Tuscany”) sued Oracle America, Inc. and its subsidiary Micros Fidelio Worldwide LLC (collectively “Oracle”), in San Francisco Superior Court alleging a single claim for breach of contract. Tuscany runs the Tuscany Hotel and Casino in Las Vegas, Nevada. The lawsuit alleges that Oracle made promises about the capabilities of its hardware and software including that it had a leading integrated management program for hospitality users such as Tuscany but that it failed to deliver on these promises. According to the Complaint:
This is yet another example of a dissatisfied customer suing Oracle for over promising and under delivering. Another unhappy customer, Barrett Business Services is also currently suing Oracle for breach of contract and related torts in San Francisco Superior Court. Oracle had demurred to Barrett’s initial complaint, arguing in part that the plaintiff had failed to plead what specific provisions of the contract Oracle had allegedly violated, and relying on its disclaimer of warranties and the contract’s integration clause to attack Barrett’s contract claim. We would not be surprised to see Oracle attack Tuscany’s complaint via demurrer on the same grounds. In the Barrett case, the Plaintiff filed an amended Complaint, which added claims for intentional misrepresentation and other detailed factual allegations, which made its pleading less susceptible to a successful demurrer. Perhaps Tuscany will do so here as well.
Tuscany alleges that:
Tuscany claims that Oracle’s various breaches have caused it damages of at least $3,000,000. Tuscany contends that Oracle’s breaches have resulted in chaos for Tuscany, which has lost substantial business and good will as a result of Oracle’s alleged failure to perform. According to the Complaint:
Tactical Law will continue to monitor the case and bring you any updates. The case is Tuscany Suites, LLC v. Oracle America, Inc., San Francisco Superior Court Case Number CGC-20-584091.
By Pamela K. Fulmer
Many Oracle customers are aware that Oracle makes huge profits off the maintenance & support fees that Oracle charges its customers each year. In fact, it is one of Oracle’s biggest profit centers. Many Oracle customers also complain that the support is not really worth the price, and they look for alternatives that may be more cost effective. One alternative is third party maintenance & support provider Rimini Street. For 10 years Oracle and Rimini Street have been battling it out in the courts, and the litigation is still ongoing. In fact, Rimini and Oracle continue to spar in the federal district court in Nevada in two separate actions, which are both hotly contested. Many Oracle customers have heard vaguely about the litigation and some think that the litigation is over. That is not the case.
In Oracle USA., Inc. v. Rimini Street, Inc., case no. 2:10-cv-0106-LRH-PAL ("Rimini I"), Oracle brought several claims against Rimini Street and its founder Seth Ravin for copyright infringement and other business torts based on (1) the process Rimini Street used to provide software maintenance and support services to customers who had licensed Oracle software, and (2) the manner in which Rimini Street accessed and preserved copies of Oracle's copyrighted software source code. Ultimately Oracle won that case and the court awarded Oracle damages and issued an injunction against Rimini, which was largely affirmed by the Ninth Circuit. Now Oracle and Rimini are back in the district court, litigating over whether Rimini has violated the injunction. Rimini denies that it has violated the injunction and contends instead that Oracle is attempting to actually broaden the injunction to include issues that were not actually litigated and resolved in the Rimini I case. For months the parties have been engaged in discovery and the court recently extended the schedule due to the impact of the Coronavirus. Currently the court has set May 27, 2020 as the due date for any motion by Oracle to show cause why Rimini Street should not be held in contempt for its alleged violation of the injunction.
Although Rimini Street denies that it is violating the injunction, here is what Rimini Street has to say in a recent public securities filing about the risk to its business that could potentially be caused should Oracle pursue the order to show cause:
“Oracle may file contempt proceedings against us at any time to attempt to enforce its interpretation of the injunction or if it has reason to believe we are not in compliance with express terms of the injunction. Such contempt proceeding or any judicial finding of contempt could result in a material adverse effect on our business and financial condition, the pendency of the injunction alone could dissuade clients from purchasing or continuing to purchase our services.” Rimini Street, Form 10K, March 16, 2020
In addition to the weapon of litigation, Oracle continues to attack Rimini Street and has devoted part of its website to convincing Oracle customers that Rimini Street cannot offer the level of maintenance & support and security that Oracle offers and that Rimini cannot be trusted. Other industry commentators have analyzed Oracle’s assertions concerning the alleged inadequacy of Rimini support and have come to a different conclusion.
Regardless, Oracle customers considering a move to Rimini Street may want to consider hiring experienced outside counsel to advise on potential risk mitigation strategies in the event that Rimini is held in contempt or found to have violated the injunction.
In an upcoming blog post we will focus on the Rimini II litigation, and Rimini’s assertions that Oracle has sought to disrupt its business relationship with its customers and has audited customers who have dropped Oracle maintenance & support and moved to Rimini Street.
By Tactical Law Attorneys and From Time to Time Their Guests