Featured Article from Software Licensing

Software Licensing Comes into Question in Oracle Case

February 27, 2014

In a world where technology is rapidly moving toward the cloud, software developers are feeling a little left behind. Unless they focus on moving their solutions to hosted platforms and adjust their software licensing to reflect this new trend, opportunities may be missed. At the same time, partnerships are being formed to enable a new channel for revenue generation. When licensing isn’t respected, problems become legal.

When the owner of the original software license is Oracle (News - Alert), chances are the provider wanting to make copies in order to support customers will run into problems if the proper permissions are not in place. Such was the case in Oracle USA, Inc. vs. Rimini St., Inc. 

In this case, the U.S. District Court for the District of Nevada ruled Feb. 13 that the software licensing governing Oracle enterprise software did not allow for third-party providers to explicitly or implicitly make copies in order to support or serve Oracle licensees. The court did, however, allow the service provider to seek application of the terms of the software license between Oracle and its licensees.

The case made it to court simply because Oracle makes it a priority to protect its intellectual properties. Rimini Street Inc. competes with the giant in the software support market and serves a number of customers with licenses for Oracle software. Before Oracle licenses are updated, they have to be tested and verified in isolated environments. Both Oracle and Rimini offer this service for owners of Oracle licenses.

Oracle didn’t appear to like the setup.

The giant claimed that Rimini was making copies of its software without authorization and sued the smaller company for copyright infringement in 2010. Rimini’s defense suggested that Oracle had conveyed a license both explicitly and implicitly. While the court first rejected Oracle’s claim, the company still argued that Rimini had infringed as it couldn’t say for sure where their access to copies had originated. The court found Oracle’s argument in conflict with explicit permissions in its software licensing as governed by federal copyright law.

In the end, the decision from the court was split, causing confusion in the industry that could lead to additional cases and at best, increases in the sheer volume of questions related to what is protected and what is not. Oracle has a right to protect its intellectual assets and the revenue attached to them. Likewise, Rimini has a right to operate within the confines of the licensing guidelines as it serves the client base that already paid Oracle for access.

In this case, both parties failed to produce the necessary documentation to fully support their arguments as Oracle tried to exceed the law and Rimini had a hard time proving it had upheld copyright guidelines. In the future, both would do well to better learn software licensing from the bottom up to protect their market opportunities. 

Edited by Rory J. Thompson
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