By Pam Fulmer
Recently Rimini filed its opposition to Oracle’s motion for an order to show cause why Rimini should not be held in contempt in the Rimini I litigation. Many of the legal arguments made by Rimini have already been previewed in the briefing on the various motions for summary judgment pending before the court in Rimini II. Below are some observations of some of the key arguments for those following the litigation and this blog.
Rimini claims that it does not host any Oracle software itself but instead accesses the software only from siloed, client hosted and client specific environments. Our readers may remember that the Nevada federal court and the Ninth Circuit took issue with Rimini’s legacy support model (Process 1.0), in which Rimini locally hosted its clients’ software environments on its own systems and used generic development environments to create updates. Rimini contends that under Process 2.0 no copying of Oracle code happens outside of the client’s siloed and specific environments and the client’s Oracle license allows such copying for that client. As a result, Rimini asserts that there is no violation of the injunction in its completely new and redesigned process. As for any objection that the code is copied into RAM, any RAM copies created are not copyright infringement as they are made in the client’s environment, which is fully licensed.
Rimini also asserts that the Process 2.0 was not actually litigated in Rimini I. Rimini argues that where a redesigned process is more than colorably different from that previously adjudicated process, adjudication of that new process in a summary contempt proceeding, which is what Oracle is trying to do, is not appropriate or constitutional. In fact, Rimini filed the Rimini II litigation for the purpose of getting a declaration from the court that its process is legitimate and does not constitute copyright infringement.
Another interesting Oracle argument is that Rimini can’t cross-use what it learns in one customer’s environment to solve a problem in another customer’s environment. Rimini argues that the conduct now accused by Oracle is the re-use of Rimini’s “know-how”, including Rimini work product not containing any Oracle code, gained by performing work for Client A to perform similar work for Client B. Rimini argues that this is not copyright infringement, but Rimini’s own knowledge that cannot be controlled by Oracle. In a heavily redacted Declaration, Rimini’s expert Professor Owen Astrachan has this to say:
Rimini also argues that Oracle’s copyrights have not been infringed as Rimini has not created a derivative work, which would require that Rimini “substantially incorporate protected material from the preexisting work.” That in turn requires that the new work be “substantially similar” to the protected work, requiring a substantial similarity analysis, including analytic dissection, which Rimini argues Oracle has not done. Rimini argues that it is irrelevant that the Rimini file, when later sent to and incorporated into a client’s PeopleSoft environment, causes that modified environment as a whole to become a derivative work (which is licensed and compliant with the injunction) because that does not make the stand-alone file (i.e., something 100% Rimini-created) a derivative work.
Another interesting issue in the litigation that Rimini argues was not litigated and decided in Rimini I involves the issue of cloud hosting. In Rimini I the injunction prohibited Rimini from reproducing, creating derivative works of, or using PeopleSoft software or documentation on, to or from “any computer systems other than a specific licensee’s own computer systems”. This requirement is a creature of the PeopleSoft license and not one of the exclusive rights granted by the Copyright Act. Rimini contends that the client’s cloud account where the software is hosted by Windstream is under the control of the client and thus is compliant with the requirements of the PeopleSoft license, which require the software to be hosted on the client’s “computer systems”. Rimini disputes that the physical hardware in the cloud environment needs to be owned by the client to be part of the client’s “computer systems”, and instead argues that the dispositive issue is control over the virtual environment and not ownership of the physical hardware.
Finally, Rimini argues that it has not violated the part of the injunction prohibiting distribution. For every single file that Oracle alleges Rimini “distributed,” Rimini argues that Oracle does not even contend, let alone prove, that the file contains Oracle code or is substantially similar to an Oracle copyrighted work. Rimini also argues that Oracle software has not been distributed as distribution under the Copyright Act requires proof of several elements, including that the work “changed hands” and that it was disseminated “to the public”, which Rimini claims is not the case here.
Tactical Law will continue to monitor the case. Check back here periodically for updates.
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