One myth that pops up in our industry is whether third-party support is legal. But where did this myth come from? In this post, we cover the full story of Rimini Street vs Oracle (the lawsuit that led to the lie). We also discuss what the results of the court trials mean today.
Oracle vs Rimini Street
CEO Seth Ravin founded Rimini Street in 2005. It currently provides support services for Oracle, SAP, Microsoft, and other ERP applications.
Starting around 2006/2007, as part of its support model, Rimini Street was downloading software from Oracle’s website. It posed as the Oracle customer it was providing support for. This was its method of providing customers with configuration, maintenance, problem resolution, and other support services.
Naturally, Oracle wasn’t happy about this. Its 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 authorisation under its licence agreement.”Oracle’s formal complaint
Oracle’s further complaints
But this wasn’t its only complaint. Oracle accused Rimini Street of the following:
- Using ‘automated crawlers’ to download hundreds of software and support materials at a time.
- Mass downloading, causing its support databases to freeze up and disrupt its operations. This was inconvenient for Oracle’s other “lawful” customers.
- Using a customer’s software to develop fixes, updates, and patches for PeopleSoft, which it could then deliver to other customers.
- Using JD Edwards and Siebel software to support customers and create illegal copies of software, to then provide cheaper support.
- Creating an unlicensed ‘software library’ which, to make matters even worse, Rimini destroyed, adding a charge for destroying evidence.
Rimini Street was, in a manner of speaking, using Oracle’s software against it. The third-party support provider was using its downloads from Oracle’s website and bypassing the user terms. It did this in order to lure Oracle’s own customers away for a fraction of the cost.
Rimini Street’s practices 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 trial, the results were as follows:
- $35.6 million was awarded to Oracle for 93 cases of copyright infringement.
- An additional $14.4 million was awarded to Oracle for computer fraud.
- Attorneys’ fees, costs, and interest meant that Rimini Street had to pay a total of $124 million.
- A permanent injunction (more on this below) was issued to Rimini Street, prohibiting further illegal acts.
Rimini Street’s permanent injunction
At the end of the 2015 trial, Rimini Street was issued with a permanent injunction, prohibiting “further illegal acts of copyright infringement and computer fraud.” Oracle’s basis for this was that it had taken Rimini Street to court on the grounds of copyright infringement. Therefore, the injunction would stop Rimini from doing it again.
Terms of the injunction
Rimini cannot reproduce, distribute, or prepare derivative works from Oracle software, unless it meets specific conditions. These are as follows:
- Activities must be solely in connection with work for a specific customer who 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 PeopleSoft, JD Edwards, or Siebel software, and Oracle 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. (Source)
Rimini Street vs Oracle: Appealing the verdicts
The end of the trial was certainly not the end of the story. It wasn’t the end of the legal battle between Rimini Street and Oracle either.
Rimini Street appealed on all charges, though less so on the charge of computer fraud. Its main concern was appealing the charges for copyright infringement. It was also trying to dismiss the injunction set against it, and challenging Oracle’s legal costs.
This was another lengthy legal battle. Both sides appealed and counter-appealed verdicts in different courts. A summary of the major results are below:
- Oracle was awarded an additional $46.2 million, to “cover the legal bills” it had accumulated during its ongoing, years-long battle with Rimini. This was in addition to a $50 million 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 $50 million.
- 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 it didn’t need to spend resources on developing its own software.
- Seth Ravin admitted that Rimini had engaged in copyright infringement, but “it had done so innocently.” The trial judge wasn’t convinced, especially given that Rimini Street destroyed evidence prior to trial. Oracle was granted $28.5 million in attorneys’ fees.
- Rimini Street also stated that it had already done away with its infringement practices in July 2014. However, the judge ruled its claim was no basis to overcome the injunction. They added that if Rimini Street had indeed done away with its previous practices, then an injunction against these same practices wouldn’t affect it.
- As a result, Oracle won its appeal to maintain the injunction.
- Rimini Street was awarded back $12.8 million, as it was deemed ‘non-taxable costs’ by the appeal courts. Rimini, however, was still trying to win back the additional $28.5 million lost in August 2018.
- An appeals court judge ruled that Rimini Street could not recover the $28.5 million paid for Oracle’s court bills.
- Additionally, the appeals court ruled to uphold the permanent injunction against Rimini Street. Rimini Street stated that the injunction won’t stop it from providing Oracle product support. It has redefined the way in which it provides support.
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.”Rimini Street press release, August 2019
Oracle’s claims of copyright infringement had fallen flat, bar one marked down as “innocent infringement.” Rimini Street made sure to reiterate that it 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 appeared pleased with this latest ruling (despite it costing an estimated $90 million to get there).
Rimini Street’s press release also stated that it’s evaluating its options in reclaiming the $28.5 million Oracle won in legal fees in August 2018.
It’s possible the story still isn’t over yet.
The damage was 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.
After over ten years, and an ordeal that had ended badly for Rimini Street, organisations naturally drew their own conclusions about the validity of third-party support.
The story became, in its simplest terms, “there’s a third-party support provider that stole from Oracle and was sued.”
Rimini Street had familiarised the term and, unfortunately, damaged its reputation. It had demonstrated that third-party support can offer low-cost support services. It also “illustrated” that this was achieved through avoiding the costs of creating applications, and stealing them instead. Rimini had set an incorrect example.
Is third-party support legal?
The good news that came out of this whole process: third-party support has been officially deemed legal.
The way Rimini Street was delivering its service was ruled as illegal. 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:
- Oracle licensees can choose not to renew their Oracle annual support
- 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
- Third parties like Rimini Street can legally offer third-party support options to Oracle licensees
- Support services can be provided to clients on their site or utilising a remote access connection
Support Revolution’s take on the Rimini Street legal case
We do not condone Rimini Street’s illegal activities. However, we do agree on the above four points. Oracle licensees 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 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. Beginning as an Oracle and SAP consultancy in 1999 with our sister company, PDG Consulting, we have over 22 years of experience in the industry. We’re also the only third-party support provider in the world that can make this claim.
We actively encourage all Oracle and SAP customers to ensure they have the proper licences. When a customer joins Support Revolution, we check their licensing and their requirements. We let them know if they’re under or over-licensed.
And finally, we have been recognised by HMRC. Our customers include the National Audit Office, the Bank of England, and several other central government bodies. Each organisation has evaluated our services and agreed to our support.
Third-party support is legal.
To date, Rimini Street still has the permanent injunction set against it.
Here at Support Revolution, we have nothing in place against us.