(CN) — The Ninth Circuit on Thursday affirmed a lower court’s ruling on four of five contempt findings against Rimini Street Inc. in the 13-year software copyright infringement litigation battle against Oracle.
Oracle is the world’s third-largest software company headquartered in Austin, Texas, and was co-founded by Larry Ellison in 1977 with Bob Miner and Ed Oates under the name Software Development Laboratories.
Rimini, based in Las Vegas, is Oracle’s largest competitor for its software support services. Rimini, with thousands of clients, offers third-party support for companies who purchase Oracle software. Rimini’s clients are located worldwide and include Fortune 500 companies, education and health care institutions as well as governments.
The panel affirmed the Nevada federal judge's order holding Rimini Street in civil contempt and imposing sanctions for violations of a permanent injunction.
In previous proceedings, the lower court’s permanent injunction identified 10 potential violations by Rimini which prohibited it from “reproducing, preparing derivative works from, or distributing certain Oracle software.”
In an opinion by U.S. Circuit Judge Patrick Bumatay, a Donald Trump appointee, the Ninth Circuit panel found the lower court did not abuse its discretion in holding Rimini in contempt for unlawfully helping its customers who were using Oracle-made software, which includes PeopleSoft, J.D. Edwards, Seibel and Oracle Database.
Bumatay found the contempt finding was bolstered by three instances in which Rimini possessed copyrighted PeopleSoft files on its local systems, which is prohibited. In each case, Rimini’s clients emailed the PeopleSoft files to Rimini employees. In two instances, the Rimini client sent the copyrighted files unsolicited; in the third case, the client did not follow instructions to place files in a shared folder. Rimini employees did not immediately quarantine or report the files to Rimini’s security or compliance departments, as required by Rimini’s internal policies, wrote Bumatay.
The panel also upheld contempt finding over a Rimini employee's use of the Oregon city of Eugene's environment to modify software and sending the update to another client, Matheson Trucking, with no evidence showing that it was developed or tested in Matheson’s specific environment.
In another instance, Rimini tried to fix a glitch in its PeopleSoft W-2 tax software reported by its client, Johnson Controls. Rather than using Johnson Controls’ development environment, Rimini again used the city of Eugene’s environment to find a solution to the bug, which violated the permanent injunction.
But the panel found the lower court abused its power by holding Rimini in contempt for creating copies of the Oracle Database file known as “prvtsidx.pbl” on its systems. Bumatay concluded that Rimini could not have helped an authorized user of the software without making a copy, and therefore did not violate the Oracle licensing agreement.
As for sanctions, Bumatay wrote: “Having affirmed four of five contempt findings, we now turn to the district court’s award of $630,000 in sanctions to Oracle. Recall the district court imposed the sanction of $100,000 for each of the six willful contempt findings and $30,000 for the one non-willful finding. Rimini argues that the sanctions award was impermissibly punitive and asks for it to be vacated. Under controlling case law, the district court didn’t abuse its discretion.”
But the panel vacated the award and remanded given its reversal of one of the contempt findings, and said it was premature to address questions about attorney fees and costs.
"The ruling by the Ninth Circuit Court of Appeals shows, once again, that Rimini repeatedly and willfully violated a federal permanent injunction and infringed Oracle’s copyrights. It is time for Rimini Street to respect the court orders,” said Stuart Levey, chief legal officer of Oracle, in a statement.
A call to attorney Mark Perry from Weil Gotshal, representing Rimini, was not immediately returned.
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