Recent Oracle vs Rimini Street Ruling Is About Customer Software License Rights Not Third Party Maintenance
On February 13th, 2014, the United States District Court , District of Nevada Judge Larry Hicks issued a partial summary judgment in the Oracle vs Rimini Street Case. Here’s the executive summary to key questions about the ruling*:
Is Third Party Maintenance still valid for Oracle products or anyone else? Yes. Users should make sure this right is explicit in all future software deals.
Can a customer give a copy to a third party? Yes if you have this in your license agreement. Users should negotiate this in contracts to ensure this right exists and remains as part of the ownership experience.
Do you have to read every contract detail before a third party maintenance provider can host the software? Yes. If there are site restrictions and if you want to host it in a vendor’s own data center. Make sure you have the right to a site change or site license change.
Can copies of software from customers that are loaded onto the server that are identical to what another customer’s rights be used or reloaded. Yes, the software license goes to intellectual property not to the media. Third party maintenance vendors can use the same instance in setting up their clients and this will drive down the cost.
Does this ruling impact other businesses? Yes. If you have no site specific rights, you can’t have a third party outsource or host. This could have major legal ramifications for Oracle and other vendor’s existing hosting and outsourcing businesses.
Four Customer Cases End In A Draw For Oracle and Rimini Street Based On Contract Law Technicalities
The ruling includes cases from four customers each with unique contract language:
- City of Flint – US District Court rules In Oracle’s favor. “Based on the court’s ruling s above, none of Rimini’s asserted license provisions (Sections 1.2(b), 1.2( c), or 14.2) expressly authorize Rimini ’s copying of Oracle’ s copy righted PeopleSoft branded software a s a matter of law. Therefore, the court finds that Oracle is entitled to summary judgment on Rimini’s express license affirmative defense as it relates to the City of Flint, and the court shall grant Oracle ’s motion accordingly“.
Point of View (POV): The City of Flint’s PeopleSoft contracts were pre-Internet and did not allow for third parties to copy licenses onto other servers on their behalf. In fact, the licenses only allowed for the City of Flint to provide “access to and use of the Software” to a third party. The ruling makes sense and is based on how the license contract is written.
- Pittsburgh Public Schools – US District Court rules In Oracle’s favor. “Based on the rulings above, the court finds that none of Rimini’s asserted license provisions (Sections 1.1, 1.2, or 10.2) expressly authorize Rimini’s copying of Oracle’s copy righted PeopleSoft branded software as a matter of law. Therefore, the court finds that Oracle is entitled to summary judgment on Rimini’s express license affirmative defense as it relates to the Pittsburgh Public Schools, and the court shall grant Oracle’s motion accordingly”.
(POV): Despite Oracle granting the Pittsburgh Public Schools “a nonexclusive, nontransferable license to make and run copies of the Software, “the right to access and use the Software is a separate right from the right to copy or reproduce software”. The ruling makes sense as with City of Flint based on the language in the original PeopleSoft contract.