Judge Gives Oracle Partial Victory in Rimini Case

February 24, 2014 Alex Woodie

The four-year legal battle between enterprise software giant Oracle and third-party maintenance provider Rimini Street is not over. But it’s closer to finally going to a jury after a judge issued a partial ruling this month that granted Oracle summary judgment over Rimini’s handling of PeopleSoft customers. The court did not issue a ruling regarding Rimini’s handling of JD Edwards and Siebel clients.

Oracle sued Rimini in January 2010, alleging that Rimini’s third-party support business for JD Edwards, PeopleSoft, and Siebel software infringed on Oracle’s copyrights, among 12 other allegations. While the companies continue to prepare for a jury trial, the ruling by United States District Court in Las Vegas, Nevada, has resolved some lingering questions about how the case will proceed.

In this month’s ruling by U.S. District Court judge Larry Hicks, the court looked at the third-party support services that Rimini provided to four customers, including two PeopleSoft customers (the city of Flint, Michigan and Pittsburgh Public Schools); one Siebel customer (Novell); and one JD Edwards customer (Giant Cement).

The court was asked to analyze the legality of Rimini’s practice of creating, on its own servers, development environments used for creating and testing the changes and updates that Rimini makes to customers’ ERP and CRM systems before they are rolled into production.

The court ruled that Rimini did violate Oracle’s copyrights in its handling of PeopleSoft customers and granted Oracle summary judgment for that section of the case. For JD Edwards and Siebel environments, the judge denied Oracle’s summary judgment request.

While the support services that Rimini provided these four customers were more or less the same, the language of those particular PeopleSoft licenses were considerably stricter in terms of how and where the customers can use the software. The PeopleSoft license “expressly limits use of the software (1) to the city of Flint’s facilities and (2) for the city of Flint’s internal data processing operations,” the court says in its ruling. The Pittsburgh Public Schools ruling fell along similar lines.

The terms of the JD Edwards license were more lenient. The license stated that customers “shall not, or cause anyone else to â€¦ copy the Documentation or Software except to the extent necessary for [customer’s] archival needs and to support the Users.” While the court saw no problem in Rimini possessing the software, it said there were still questions of material fact as to whether the license enabled Rimini to access the source code.

The legal argument went along similar lines for the Siebel customer, Novell. The court found that Oracle’s license allowed Novell to “reproduce, exactly as provided by [Oracle], a reasonable number of copies of the [software] solely for archive or emergency backup purposes or disaster recovery and related testing.” Again, the license allowed Rimini to copy the software, but there are questions about whether Rimini is allowed to do anything with it.

In a statement, Rimini CEO Seth Ravin says that, while he disagrees with the court’s interpretation of the PeopleSoft licenses, the company will respect its decision and change its practices in response to the ruling. That means that Rimini will no longer host any development environments on its own servers, and instead will insist that all development work be done on a client’s own system.

Rimini, which filed to go public in November, says it stopped giving customers the option to host development and testing environments on its own servers in 2012, and in January 2013 began migrating all Rimini-hosted environments to client-hosted environments. “We are continuing this migration, which conforms to the Court’s recent ruling,” the company says.

While Rimini hailed the ruling as a partial validation of the third-party maintenance business model as a whole, Rimini’s main competitor, Spinnaker Support, made hay over the judgments against Rimini. Spinnaker claims that “the improper actions outlined in the February 13, 2014, summary judgment cannot be found in Spinnaker Support’s practices for delivering third-party maintenance,” the company says.

“Spinnaker Support’s management team has workedâ€¦to implement and preserve the integrity of our software maintenance delivery model that protects the intellectual property rights of our customers and third-party software publishers, including Oracle,” Spinnaker Support CEO and managing principal Matt Stava says in a statement. “Spinnaker Support faces no such litigation due to its commitment to protecting the intellectual property rights of all parties involved in a third-party maintenance relationship.”