One myth that perpetuates in our industry is whether third-party support is legal. But where did this myth originate? We cover the full story of Rimini Street vs. Oracle that first spawned this myth and discuss what the results of the various court trials mean today.
Oracle vs Rimini Street
Rimini Street was founded in 2005, by CEO Seth Ravin, and currently provides support services for Oracle, SAP, Microsoft, and other ERP applications.
Starting around 2006/2007, as part of their support model, Rimini Street were downloading the software they needed from Oracle’s website (posing as the Oracle customer they were providing support for). This was their method of providing their customers with configuration, maintenance, problem resolution, and other support services.
Naturally, Oracle weren’t happy about this. Their complaint was:
“[Rimini Street] typically logs on to Oracle’s password-protected Technical Support websites using a customer credential, then downloads Software and Support Materials in excess of the customer’s authorization under its license agreement.”
But this wasn’t their only complaint. Oracle accused Rimini Street of the following:
- Using “automated crawlers” to download hundreds, sometimes thousands of software and support materials at a time.
- Mass downloading, causing their support databases to freeze up, disrupt their operations, and inconvenience Oracle’s other, ‘lawful’ customers.
- Using a customer’s software to develop fixes, updates and patches for PeopleSoft, which they could then deliver to other customers.
- Using JD Edwards and Siebel software to support customers and create additional, illegal copies of software, to then provide their cheaper support.
- Creating an unlicensed “Software Library,” which, to make matters even worse, Rimini destroyed; adding an additional charge for destroying evidence.
Rimini Street were, in a manner of speaking, using Oracle’s software against them. They were utilising what they had downloaded from Oracle’s website, and bypassing the established user terms, in order to lure Oracle’s own customers away for a fraction of the cost.
Rimini Street’s practices ultimately led to Oracle filing suit against Rimini Street in January 2010.
Initial trial results
The trial between Rimini Street and Oracle ran from September to October 2015. At the end of the proceedings, the results were these:
- Oracle were awarded $35.6 million, for 93 cases of copyright infringement
- Oracle were awarded an additional $14.4million, for computer fraud
- Additional attorneys’ fees, costs and interest made a total $124 million to be paid by Rimini Street
- Rimini Street were issued a permanent injunction (more on this below), prohibiting further illegal acts of copyright infringement and computer fraud
Rimini Street’s permanent injunction
At the end of the 2015 trial, Rimini Street were issued with a permanent injunction, prohibiting them from “further illegal acts of copyright infringement and computer fraud.” Oracle’s basis for this was quite straightforward: they’d taken Rimini Street to court on grounds of copyright infringement, and the injunction would stop them from doing it again.
Terms of the injunction
Rimini cannot reproduce, prepare derivative works from, or distribute various Oracle software, unless it meets specific conditions:
- Activities must be solely in connection with work for a specific customer that holds a valid, written licence for that software and documentation authorising Rimini Street’s specific conduct.
- Rimini’s conduct must meet specific terms set out for each of PeopleSoft, J.D. Edwards or Siebel software, and for Oracle’s database software. For instance, it cannot distribute the software or any derivatives to others; and can’t access or copy source code for development and testing of software updates. (https://www.theregister.co.uk/2018/08/16/oracle_rimini_street_injunction_attorneys_fees)
Rimini Street vs Oracle: Appealing the verdicts
The end of the trial was certainly not the end of the story, nor the legal battles between Rimini Street and Oracle.
Rimini Street appealed on all charges, though less so on the charge of computer fraud. Their main concerns were appealing the charges for copyright infringement, trying to dismiss the injunction set against them, and challenge Oracle’s legal costs.
This was another lengthy legal battle with both sides appealing and counter-appealing verdicts in different courts. A summary of the major results are below:
- Oracle were awarded an additional $46.2m, to “cover the legal bills” they had accumulated, during their ongoing, years-long battle with Rimini. This was in addition to a $50m damages pay-out which Oracle had already won.
- The court dismissed findings that Rimini Street had violated a pair of laws in California and Nevada, on the grounds of a false ruling, reducing Rimini Street’s charge by $50million.
- An appeals court judge ruled that Rimini Street had “irreparably injured Oracle’s business reputation and goodwill” and that the main reason Rimini could offer discount prices was because they didn’t need to spend resources on developing their own software.
- Seth Ravin admitted that Rimini had engaged in copyright infringement, but “they had done so innocently.” The trial judge wasn’t convinced – especially given that Rimini Street had “destroyed evidence prior to trial” (the archive mentioned already) – so $28.5m in attorneys’ fees were granted to Oracle.
- Rimini Street also stated that they had already done away with their infringement practices, in July 2014. However, the judge ruled their claim was no basis to overcome the injunction, and added that if Rimini Street had indeed done away with their previous practices, then an injunction against these same practices wouldn’t affect them.
- As a result, Oracle won their appeal to maintain the injunction.
- $12.8million were awarded back to Rimini Street, as it was deemed ‘non-taxable costs’ by the appeal courts. Rimini, however, were still trying to win back the additional $28.5 million lost in August 2018.
- A year later, an appeals court judge ruled that Rimini Street could not recover the $28.5m paid for Oracle’s court bills.
- Additionally, the appeals court ruled to uphold the permanent injunction against Rimini Street.
- Rimini Street themselves stated that the injunction won’t stop their providing Oracle product support; but it has redefined the way in which they provide their support, at least.
- Rimini Street appeared pleased with this ruling, though had paid an estimated $90m over to Oracle in order to get there.
On 19 August 2019, Rimini Street released a press release: “Oracle lost 23 of 24 claims it originally pursued against Rimini Street in this case, with the jury finding that Rimini Street engaged in “innocent infringement” on the remaining claim”.
Oracle’s claims of copyright infringement had fallen flat, bar one marked down as ‘innocent infringement’. Rimini Street made sure to mention that they had already dropped the infringing conducts, which had led to the whole lawsuit in the first place, in July 2014 – before the 2015 trial had even happened.
Rimini Street’s press release also stated that they’re evaluating their options in reclaiming the $28.5million Oracle won in legal fees, in August 2018.
It’s possible the story still isn’t over yet.
The damage had been done
Five years of lawsuits, legal battles and court cases leading to a 2015 trial; then four years of appeals cases – a secondary phase of Rimini Street and Oracle basically chasing their own losses.
At least ten years in the making, and an ordeal that had ended badly for Rimini Street, during which organisations naturally drew their own conclusions about the validity of third-party support.
The story became, in its simplest terms: “there was a third-party support provider who stole from Oracle and got sued”.
Rimini Street had familiarised the term; and, unfortunately, damaged its reputation. They had ‘demonstrated’ that third-party support can offer low-cost support services, simply by avoiding costs of creating enterprise applications, and stealing them instead. An incorrect example had been set.
Summary: Third-party support is legal
The good news is that ‘third-party support’ was never ruled as illegal; thus, there’s nothing wrong with the services provided by Support Revolution, Rimini Street and Spinnaker Support.
What was ruled as illegal was the way Rimini Street were delivering their service. According to Rimini Street’s own website: Detailed testimony and evidence provided by Oracle executives and witnesses in the 2015 trial confirmed that third-party support is lawful for Oracle licensees to purchase and use. The evidence presented at trial supported several important principles:
- (a) Oracle licensees can choose not to renew their Oracle annual support;
- (b) Oracle licensees can select, switch to, and use a third-party support provider or self-support instead of renewing and paying Oracle for annual support services;
- (c) Third parties like Rimini Street can legally offer third-party support options to Oracle licensees; and
- (d) Support services can be provided to clients on their site or utilizing a remote access connection.
Support Revolution’s take on the Rimini Street legal case:
We do not condone Rimini Street’s illegal activities; but, we do agree with them on the above four points. Oracle licenses can switch to third-party support, rather than renewing and paying Oracle’s prices.
The difference with the Support Revolution approach is that we have examined all the evidence in the court case between Rimini Street and Oracle, and accordingly have designed our services to be completely legal and above board.Mark Smith, CEO of Support Revolution
We have an additional advantage: a background as both an Oracle and SAP partner. We began as an Oracle and SAP consultancy in 1999 with our sister company, PDG Consulting, giving us over 20 years’ experience in the industry. (We’re also the only third-party support provider who can make this claim.)
We actively encourage all Oracle and SAP customers to be properly licensed. When a customer joins Support Revolution, provided they are appropriately licensed for their estate, they can buy more Oracle and SAP licenses and purchase any other Oracle or SAP products they desire.
And finally, we have been recognised by the HRMC (https://www.tax.service.gov.uk/making-tax-digital-software) and our customers include the Home Office, the National Audit Office, and the Bank of England. Each organisation has evaluated our services and agreed to our support and maintenance.
Because third-party support is legal.