Supreme Court Weighs In On Oracle Vs. Rimini Street
March 13, 2019 Alex Woodie
The United States Supreme Court last week ruled against Oracle in its ongoing copyright infringement case against Rimini Street, handing the provider of third-party support services for JD Edwards, PeopleSoft, and Siebel ERP and CRM software a legal victory in the nation’s highest court.
It’s not often that lawsuits involving enterprise software and services make their way up to the Supreme Court. In this case, the nine justices were asked to rule on a relatively narrow disagreement between the two parties over what legal costs can be recovered. Oracle already prevailed in its copyright infringement case against Rimini Street, which it filed in United States District Court in Las Vegas, Nevada, way back in 2010.
Following the conclusion of a jury trial in October 2015, Rimini was ordered to pay Oracle nearly $52.8 million in damages for infringing upon Oracle’s copyrights. A year later, the court ordered Rimini to pay an addition $46.2 million to compensate Oracle’s attorney’s fees and costs associated with the protracted legal battle. All told, Rimini faced a legal bill in excess of $124 million at one point.
Rimini appealed the loss in federal court, and in early 2018, a three-judge panel of the Ninth Circuit Court of Appeals re-affirmed Rimini’s guilt in accessing Oracle’s copyrighted material. But the court tossed out the lower court’s ruling that Rimini had violated California and Nevada state laws by using “automatic downloaders” to access the copyrighted material. That lowered Rimini’s legal exposure by about $50 million.
Rimini continued its appeal to lower its legal bill, and in a unanimous 9-0 ruling, the Supreme Court sided with the Las Vegas-based company against Oracle and a previous ruling of the Ninth Circuit. Writing the majority opinion, Justice Bret Kavanagh explained that the Ninth Circuit had misinterpreted the meaning of a section of the Copyright Act that has to do with awarding “full costs” to the prevailing party in copyright litigation.
According to Justice Kavanaugh’s opinion, recuperation of costs in the Copyright Act is limited to the six categories of costs specified by Congress in the general federal costs statute, which include clerk and marshal fees; printing or transcribing costs; witness-related costs; costs related to copying materials; docket fees; and compensation for court-appointed experts, including interpreters and special interpretation services.
Oracle argued that the term “full costs” isn’t limited to those six categories, and that it refers to all costs associated with litigation, including expert witness fees, e-discovery expenses, and jury consultant fees. To back up its claim, Oracle argued that Congress borrowed the meaning of “full costs” from English copyright laws when it passed the Copyright Act of 1831, and that this meaning should override any cost schedules contained in the Fee Act of 1853.
“Courts need not, however, undertake extensive historical excavation to determine the meaning of costs statutes,” Kavanaugh writes, citing case law. “Congress may authorize awards of expenses beyond the six categories specified in the general costs statute but courts may not award litigation expenses that are not specified in §§1821 and 1920 absent explicit authority.”
As part of the decision, Kavanaugh took Oracle to task for its interpretation of the word “full.” “The word ‘full’ operates in the phrase ‘full costs’ just as it operates in other common phrases: A ‘full moon’ means the moon, not Mars. A ‘full breakfast’ means breakfast, not lunch. A ‘full season ticket plan’ means tickets, not hot dogs. So too, the term ‘full costs’ means costs, not other expenses.”
Rimini attorney Mark Perry applauded the decision. “The Supreme Court unanimously agreed with the structural, grammatical, and historical arguments that we advanced on behalf of Rimini Street, and rejected the contrary positions put forth by Oracle,” he stated in a press release. “The Court brought cost awards under the Copyright Act back into line with hundreds of other federal statutes.”
Oracle Vice President for Corporate Communications Deborah Hellinger brushed off the loss, saying the Supreme Court ruling on fees was “ancillary” to the core rulings in the case.
“The Supreme Court’s narrow decision today on recovery of a type of cost does not change the fundamental facts of the case: Rimini engaged in a massive theft of Oracle’s IP and tried to cover it up by destroying evidence and engaging in other litigation misconduct, but it got tagged for its illegal activities anyway by both judge and jury, as the opinion acknowledges,” Hellinger stated.
As a result of the ruling, Oracle must return $12.8 million that Rimini had paid Oracle. While the case made it to the Supreme Court, that doesn’t spell the end of Oracle vs. Rimini Street. Rimini is still appealing the Ninth Circuit’s judgments in the case, and currently is trying to recoup $28.5 million it paid Oracle.