Trial Date Set in Oracle vs. Rimini

July 15, 2015 Alex Woodie

Rimini Street and Oracle are prepping for a September trial that should help conclude the five-year legal battle over Rimini’s third-party ERP maintenance business. However, the clock is just starting on a fresh lawsuit Rimini filed against Oracle in which it hopes to clarify the legality of its new business model. Despite the legal murkiness, both Rimini and its top competitor, Spinnaker Support, report brisk sales.

The trial in Oracle vs. Rimini that’s slated to begin in about two months should decide whether Rimini stole Oracle’s copyrighted material relating to its JD Edwards and Siebel applications and, if so, what damages are appropriate.

Oracle has already won half its original case, which was filed in January 2010. In February 2014, a judge in the case (which is taking place in United States District Court in Las Vegas, Nevada) issued a partial ruling that found that Rimini had violated six Oracle copyrights for the PeopleSoft ERP system. The trial will decide whether Rimini also infringed on the copyrights with its JD Edwards and Siebel customers, and set damages. Oracle is seeking $200 million.

Oracle is looking forward to the September trial in this case, the company’s general counsel, Dorian Daley, said. “Oracle filed this lawsuit to stop Rimini’s unlawful conduct. Even though the Court has found that Rimini’s practices were infringing, Rimini and [CEO Seth] Ravin have not committed to stopping those practices. We look forward to presenting our case to the jury to protect Oracle’s intellectual property rights,” he said.

While Rimini continues to deny that it ever violated Oracle’s copyrights in the first place and maintains its right to appeal (pending the outcome of the trial in Oracle vs. Rimini), the Las Vegas company says it has changed its processes to make absolutely sure there are no copyrights being violated and that it adheres to Oracle’s software licensing policies. And so in October 2014, Rimini filed a new lawsuit against Oracle to get the court to declare that it’s no longer infringing on Oracle’s copyrights, and hasn’t since at least July 31, 2014.

That’s the date that Rimini claims it completed the switch to a new internal business process for creating and distributing fixes, patches, and updates for its various Oracle customers, including those running JD Edwards, PeopleSoft, Siebel, and Oracle database products. Since the court has refused to consider Rimini’s new business processes in Oracle vs. Rimini, and since Oracle’s lawyers left open the possibility of another lawsuit against Rimini to handle any possible damages occurring between February and July 2014, the company went forth with Rimini vs. Oracle as basically a preemptive strike against Oracle.

“[I]n light of Oracle’s . . . continuing claims that Rimini’s new processes are infringing, Rimini now brings this suit seeking a declaration that Rimini’s current processes do not infringe Oracle’s copyrights.”

As you may have guessed already, Oracle is not going quietly into the Las Vegas night. “Rimini’s ‘new’ process still involves intentional and systematic misuse of Oracle software,” the software giant’s counter complaint says. “Rimini is both lying to its customers and continuing to infringe Oracle’s copyrights.”

According to Oracle, Rimini is still selling old wine in new bottles. “Rimini’s ‘new’ copying, enabled by unlawful downloading from Oracle’s websites, violates the same laws as the old support process, as already adjudged by this Court,” Oracle’s lawyers write in the counter compliant.

Oracle says there’s no way Rimini can run its third-party support business without infringing on its copyrights by “scraping” its websites for patches, fixes, updates, and instruction manuals. “Rimini does not have the development capability to meet the support commitments it advertises at any price, much less the 50 percent discount it promotes,” the company writes in its counterclaim. “Rimini’s support model depends on infringing Oracle’s copyrights and other unlawful acts.”

Rimini insists that its business is legal, and hopes to prove it in Rimini vs. Oracle. “Unfortunately, Oracle’s counterclaim continues the same, tired narrative Oracle has tried unsuccessfully to spin against its fast-growing competitor for many years–one that mischaracterizes Rimini’s actions as ‘intentional theft’ and vilifies its founder and CEO, Seth Ravin, as an evil ‘mastermind,'” the company writes in its response to Oracle’s counterclaim.

“Rimini is simply trying to legally deliver a set of competitive services to Oracle software licensees in an open, competitive marketplace–services that Oracle has agreed are legal for third parties like Rimini to offer and legal for Oracle licensees to obtain,” Rimini’s lawyers write. “Rimini filed this action to seek a declaration by this Court that the particular processes now used by Rimini to deliver services for Oracle PeopleSoft licensees are not infringing.”

Despite all these lawsuits, the third-party maintenance business shows no signs of slowing down.

Rimini, which has more than 1,000 clients and is still hoping to go public, last week said it brought in “net revenues” of $27.8 million for the second quarter ended June 30, which was a 36 percent increase from the second quarter of 2014. It says it has more than $91 million in deferred revenues, up nearly 50 percent from a year ago, and billings growth of 55 percent over the past 12 months. It was the 38th straight quarter of growth since the company was founded 10 years ago. (Ravin, you will remember, was also the founder and CEO of TomorrowNow, which had its own legal problems with Oracle.)

Spinnaker Support, meanwhile, says its first half revenues for 2015 were 43 percent higher than for 2014. The company signed about 80 new clients during the first six months of 2015, bringing its total client count to 432, it said in an announcement last week. In addition to supporting JD Edwards World and EnterpriseOne, the Denver, Colorado, company also provides maintenance and support for Siebel, E-Business Suite, Oracle Database, and SAP Business Suite products.

“We predicted that 2015 could shape up as an inflection point year for third-party support, and we were right,” says Spinnaker Support CEO Matt Stava. “Organizations around the world are fast recognizing that third-party support is a smart option and that Spinnaker Support delivers it the right way. The Oracle versus Rimini Street trial should continue to drive organizations to the safe harbor of Spinnaker Support.”

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