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.
Tactical Law Attorneys