Tech Company Wins $14M Reprieve in Fight With Oracle

SAN FRANCISCO (CN) – Software giant Oracle emerged from yet another copyright battle mostly victorious, with a federal appeals court upholding the central thrust of a lower court decision in its favor.

A Ninth Circuit panel found Rimini Street Inc. and its CEO Seth Ravin undertook a copyright infringement scheme to enhance its own profits while violating Oracle’s terms of service, but said charging the company with violating two separate state computer fraud statutes was a bridge too far.

“Rimini’s alleged copyright infringement included copying under the license of one customer for work for other existing customers or for unknown or future customers, rather than restricting such copying to work for that particular customer,” U.S. District Judge Jeremy Fogel, sitting by designation from the Northern District of California, wrote in the unanimous 34-page decision. Circuit Judges Susan Graber and Michelle Friedland also heard the case which dates back to 2010, when Oracle first filed its copyright claims.

The case centers around whether Rimini was allowed by the terms of service to copy and alters elements of Oracle’s software.

Rimini said the terms of service plainly allow it to take Oracle’s database software systems and adjust it to the needs of a given customer.

But Oracle argued Rimini was copying and altering software systems to sell to other companies, thereby cutting Oracle out of contracts to which it was entitled. Essentially, Oracle claimed, Rimini was copying Oracle’s software and selling it as its own in violation of copyright law.

The Ninth Circuit agreed Rimini did engage in such conduct and left the judgment, including awarded damages, in place.

However, Rimini earned a small victory when the panel ruled a jury erred in finding that Rimini violated California and Nevada’s computer fraud laws.

The California Comprehensive Data Access and Fraud Act (CDAFA), the Nevada Computer Crimes Law, (NCCL) and California’s unfair competition law all guide and regulate the use of software data and specifically prohibits copying or making use of such data without express permission.

But in the present instance, Rimini had permission to obtain and make use of Oracle’s software at the initial download. The company used an automated system prohibited by Oracle to obtain it, and the panel ruled state laws did not apply as a result.

“We hold that taking data using a method prohibited by the applicable terms of use, when the taking itself generally is permitted, does not violate the CDAFA,” Fogel says. “Because the same reasoning applies to the NCCL claim, we reverse the judgment as to both claims.”

The reversal means the $14.4 million awarded to Oracle as a result of the violation of the state claims will be subtracted from $50 million award. Nevertheless, Oracle prevailed on its central claim that Rimini Street illegally obtained, copied and altered its software for profits.

The Ninth Circuit also remanded the decision of attorney fees to federal court.

 

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