Monopoly Claims Against Oracle Get Green Light

SAN JOSE (CN) - An antitrust action can proceed against Oracle America on the charge that the computer maker tied updates to support service contracts.

The antitrust lawsuit stems from the days when Sun Microsystems, "(i)n its heyday as a provider of the large computer servers ... made the Internet what it is," U.S. Magistrate Judge Paul Grewal wrote in his summary of the case.

Sun released its UNIX-based Solaris operating system in 1992. Sun provided end users free updates of its copyrighted, proprietary Solaris system, bug fixes and firmware for free.

But that ended in 2011, when Oracle purchased Sun Microsystems, and required customers to sign exclusive contracts tying them to Oracle support services.

That changed the landscape, U.S. Magistrate Judge Paul Grewal wrote in his Nov. 7 ruling.

No longer was there "a robust, competitive aftermarket in Solaris support services that included not only Sun but a range of third parties, including defendants Terix Computer Company, Inc., Maintech, Inc. and Volt Delta Resources, LLC."

Grewal's order continues: "(O)nce plaintiffs Oracle America, Inc. and Oracle International Corporation were in charge, customers had to make a choice - either buy their Solaris support services from Oracle, or find themselves cut off from any updates or firmware they might need to keep their servers up and running."

Oracle then issued its customers a customer support identification number, through which they could log into Oracle's secure support website for updates and fixes.

When the defendants offered their own Solaris support services, Oracle sued them for copyright infringement, fraud and other torts.

Grewal in January preserved all but the key code "trafficking" claim.

The defendants countersued, alleging federal and California antitrust violations, interference with contract, unfair competition and other charges.

In the Nov. 7 ruling, citing Eastman Kodak Co. v. Image Technical Services Inc., Grewal granted Oracle's motion for dismissal on all but the "tying-related" and interference claims.

"Defendants' counterclaims clearly meet the Ninth Circuit standard," Grewal found. "Oracle's operative complaint is targeted at ensuring that hardware owners only can obtain access to Solaris updates if they also purchase support services from Oracle. Defendants' counterclaims allege that this same policy constitutes copyright misuse and a violation of the antitrust laws."

He added: "Because defendants have successfully pleaded their Section 1 claim - at least as to those customers who purchased hardware before Oracle's change in policy - their Section 2 monopolization claims may proceed as well."

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