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Monday, March 29, 2010

Rimini Street sues Oracle for unfair competition and other abuses

This just in: Rimini Street is fighting back against Oracle's lawsuit by filing its own lawsuit against Oracle for copyright misuse, defamation, disparagement, trade libel, and unfair competition.

Note: this post has been updated with further information gathered today along with extended excerpts of the Rimini Street court filings.

Background: Rimini Street offers third-party maintenance services in competition with Oracle's own applications maintenance and support services. Oracle sued Rimini Street in January for copyright infringement in a case similar to its suit against SAP's now discontinued TomorrowNow unit.

Rimini Street's press release
I am waiting for a copy of the actual filing and a briefing by Rimini Street. In the meantime, here is the text of the press release on this matter from Rimini Street (lightly edited)
Rimini Street Sues Oracle
Rimini Street, Inc., ... today announced that it filed suit against Oracle in U.S. District Court for the District of Nevada by presenting counterclaims alleging copyright misuse, defamation, disparagement, trade libel, and unfair competition under the California Business and Professions Code. With its filing, Rimini Street aims to end Oracle’s five year campaign of anticompetitive tactics against Rimini Street that most recently includes a baseless lawsuit. Additionally, Rimini Street announced today that it filed its response to Oracle’s complaint, showing Rimini Street’s business processes and procedures are entirely legal and vehemently denying Oracle’s false and malicious allegations.

Rimini Street is Oracle’s Primary Competition for Annual Support Services
Rimini Street is Oracle’s fastest-growing and leading competitor for the annual support of Oracle’s Siebel, PeopleSoft, and JD Edwards software products. In 2009, Rimini Street saw growth of more than 270 percent in year-over-year revenue, doubled its global workforce to 160 professionals, and accumulated nearly $150 million in sales backlog serving hundreds of Global, Fortune 500, mid-market, and public sector organizations around the world.

Oracle has a Long History of Trying to Stifle Rimini Street Competition
Oracle and its predecessors began a systematic campaign to disrupt and halt Rimini Street’s business since the inception of the company in 2005. As Rimini Street’s success grew, so did Oracle’s apparent determination and efforts to disrupt Rimini Street’s growth. Rimini Street’s response to Oracle’s complaint details examples of Oracle’s business interference over many years including:
  • Initially, beginning in September 2005, Oracle’s efforts consisted of numerous hostile letters. Over the years, Rimini Street responded to each letter, explained the appropriateness of Rimini Street’s practices and procedures, and repeatedly offered to meet and discuss any questions or concerns Oracle might have about Rimini Street processes and procedures.

  • In June 2007, Oracle interfered with authorized work on behalf of Rimini Street clients by changing its website usage terms. Rimini Street wrote Oracle about the anticompetitive tactic against Rimini Street and informed Oracle that the change was likely a breach of Oracle’s client license agreements, which expressly prevent service rights degradation. As such, the changes were not enforceable.

  • In December 2008, Oracle escalated its tactics by intentionally blocking Rimini Street’s IP addresses and interfering with Rimini Street’s authorized work on behalf of a large client switching from Oracle to Rimini Street support. After correspondence from both the client and Rimini Street demanding Oracle cease and desist, Oracle stopped the interference.

  • Most recently, in January 2010, Oracle once again escalated its anticompetitive tactics, this time through litigation. Oracle filed a baseless lawsuit against Rimini Street, choosing to ignore Rimini Street’s numerous invitations for dialogue, offer to view internal Rimini Street information, and even the opportunity to engage a third party auditor.
Oracle Chooses Competition in the Courtroom Rather than the Marketplace

In February 2009, Rimini Street sought to stop Oracle’s campaign of anticompetitive actions once and for all by again requesting and finally being granted a call with Oracle representatives. On the call, Rimini Street offered to share Rimini Street internal information and/or work out an agreement that would utilize an independent third party auditor reporting back to both parties to confirm Rimini Street’s compliance with its standard processes and procedures. Oracle never responded to any of Rimini Street’s proposals.

Instead, Oracle filed a baseless lawsuit against Rimini Street in an apparent effort to try and protect its 95% dominant market share and monopoly-like 92% gross margins on the annual support of its products.

Rimini Street Vehemently Denies Oracle’s False Accusations

Rimini Street’s business processes and procedures are entirely legal, and Rimini Street vehemently denies Oracle’s accusations. Rimini Street has implemented extraordinary processes and procedures to assure the proper use of Oracle’s intellectual property as detailed more fully in Rimini Street’s response to Oracle’s complaint. For example:
  • Each client authorizes Rimini Street to perform work on its behalf

  • Rimini Street only delivers Oracle software and support materials to each client who is entitled to receive such materials

  • Rimini Street uses separate data “silos” for each client and has policies against co-mingling data

  • Rimini Street is authorized by its clients to possess and use copies of their Oracle licensed products to provide services to them, just like IBM, AT&T, Accenture, CedarCrestone and virtually every other hosting service provider working with copies of their client’s licensed products
Rimini Street's answer and counter-claims against Oracle
In their motion to dismiss Oracle's suit, Rimini Street lawyers argue, generally, that Oracle has not been specific in detailing how Oracle has been harmed by Rimini Street's, or what specific actions Rimini Street committed that caused harm to Oracle.
Again and again, the response argues that "Oracle’s allegations do not even attempt to identify which facts might support Oracle’s otherwise conclusory regurgitation of statutory language."

In addition, Rimini Street filed a motion to dismiss claims against Seth Ravin,
CEO and founder of Rimini Street, claiming that Oracle had failed to point to any specific acts that Ravin committed that would hold him personally liable.

But the real punch comes in Rimini Street's counterclaims against Oracle. I have reproduced most of Rimini Street's "Answer and Counter-Claims" at the end of this post. Please read through this, as it outlines the Rimini Street's case much more clearly than I can summarize.

My Take

Many of us have been hoping for a vigorous response by Rimini Street and it appears this is what Rimini Street is doing. As I've pointed out in the past, this case is going to bring increased legal scrutiny of Oracle and other major software providers in terms of how they lock in customers to their maintenance and support programs. Oracle runs a risk in filing this lawsuit. If Oracle does not prevail against Rimini Street, the case will strongly establish the legal basis for the third-party support industry.

Update: Dennis Howlett weighs in, and includes a terse statement he received in response to his request for comment from Oracle. Though the response is minimal, it does appear to go beyond Oracle's policy of not commenting on litigation.

Update, 3:00 p.m.: In a call with Seth Ravin this afternoon, he expressed confidence in his firm's prospects both in refuting Oracle's allegations and odds for prevailing against Oracle in Rimini Street's counter-claims. If Oracle had been betting on a response from Rimini Street along the lines of the mea culpa response it got from SAP/TomorrowNow, it bet wrong.

Update, 3:30 p.m.: I have no idea if this is related to Rimini's counter-claim against Oracle, but the U.S. stock markets are up today about one-half percent, while Oracle's stock price is down about one-half percent.

Update, Apr. 5: Fellow Enterprise Advocate Ray Wang weighs in, with his analysis and encouragement for ERP customers to seek anti-trust class action with the US Department of Justice and the European Union against software vendors who hinder third-party maintenance providers from providing services.

Related posts
Oracle slams Rimini Street with lawsuit over third-party maintenance
No recession for Rimini Street third-party maintenance business
Rimini Street, SAP, and the future of third-party maintenance
Rimini Street to provide third-party support for SAP
Legal basis for third-party ERP support industry


Extended Excerpts of Rimini Street's Answer and Counter-Claims to Oracle
The full PDF may be downloaded, from ZDnet.
....
I. FACTUAL BACKGROUND
1. “We believe we should be the ones to support our customers, . . . . If you’re a third party support provider offering multivendor support, we’re coming, we’re coming.” (Juergen Rottler, Oracle’s Executive Vice President of Global Customer Services, threatening third-party support vendors that compete with Oracle).1 Oracle made this public threat just one day after filing its Complaint against Rimini Street.

A. Rimini Street Vehemently Denies Oracle’s Knowingly False Accusations.
2. Oracle maliciously alleges that Rimini Street’s business is an “illegal business model,” an “illegal scheme,” and that there has been “massive theft of Oracle’s software and related support materials by Rimini Street.” These accusations are false, and Rimini Street vehemently denies them.

3. Rimini Street’s business processes and procedures are entirely legal, and Rimini Street has not committed “massive theft,” or any theft at all. Rimini Street is authorized by every one of its clients to perform work on their behalf, and, as a matter of process and procedure, has delivered Oracle Software and Support Materials2 only to clients who were entitled to them and only within the scope of that client’s entitlement.

4. Far from Oracle’s “massive theft” allegation, Rimini Street has implemented extraordinary processes and procedures to assure the proper use of Oracle’s intellectual property. For example, Rimini Street performs a unique download of Oracle Software and Support Materials on behalf of each client that authorizes and requests such service. Rimini Street maintains downloaded material only on behalf of the client for whom the download was performed. And, as a matter of process and procedure, each client is assigned a separate data “silo” where Oracle Software and Support Materials for only that client are maintained. Rimini Street does not co-mingle the independent downloads of clients.

5. With respect to Oracle’s complaint about Rimini Street possessing copies of Oracle customer licensed software, Oracle customers authorize Rimini Street to possess and use such copies. Not only is possessing and using the copies legal, it is an industry standard for third party vendors like IBM, AT&T, Accenture, CedarCrestone, and countless others who work with the same Oracle customer licensed software. Oracle is well aware of Rimini Street’s authorized possession and usage of customer licensed software because Oracle itself delivered the software to Rimini Street for hundreds of its customers.

6. Oracle is fully aware of Rimini Street’s processes and procedures. If Oracle had genuine concerns about Rimini Street’s use of its intellectual property, Oracle could have accepted Rimini Street’s numerous offers since September 2005 to openly and transparently review and discuss Rimini Street processes and procedures, or Oracle could have even accepted Rimini Street’s invitation to review internal materials and Rimini Street’s invitation to have a third-party independent auditor review Rimini Street’s compliance with its processes and procedures.

7. Instead, Oracle chose to ignore the fact that Rimini Street’s processes and procedures are legal and supported by industry-leading practices. Oracle initiated this baseless litigation as another anticompetitive tactic to try and slow Rimini Street’s fast-paced growth and protect Oracle’s dominant 95% market share and monopoly-like 92% gross profit margins on the after-market support of its products.

8. Rimini Street will aggressively defend against this baseless litigation and has counterclaimed herein so as to end Oracle’s five year campaign of illegal anticompetitive tactics against Rimini Street and to hold Oracle accountable for its actions, related costs and damages.

B. Oracle Prefers Competition in the Courtroom Rather than the Marketplace.
9. Oracle is the world’s largest enterprise software company. Rimini Street provides after-market support services for enterprise software applications—including software applications licensed by Oracle.

10. Rimini Street is Oracle’s fastest-growing competitor for the after-market support business of Oracle’s Siebel, PeopleSoft and JD Edwards enterprise software products. Hundreds of Fortune 500, mid market, small and public sector organizations around the world have already made the switch to Rimini Street’s innovative, award-winning and highly-praised support model. Rimini Street has been forecasting significant continued year-over-year growth based on sales pipeline data.

11. Rimini Street’s success and growing industry acceptance as a proven alternative to Oracle’s much more expensive after-market support offerings is now threatening Oracle’s market control and pricing power. In response, Oracle has now turned to the courtroom instead of choosing to compete in an open and fair market. Oracle’s strategy is to use this calculated litigation to protect its share of the after-market support business for Oracle software products and preserve or increase its profit margin on those services.

12. With a staggering $800 million in quarterly losses in its core businesses, Oracle’s power, profits and financial strength can only be maintained if it can continue coercing its customers into paying exorbitant annual fees for after-market support of its products.

C. Rimini Street is Oracle’s Primary Competition for After-Market Support.
13. In 2009, Rimini Street saw growth of more than 270% in year-over-year revenue, more than doubled its global client base to nearly 300, added substantial new international clients, accumulated nearly $150 million in sales backlog, and more than doubled its global workforce to 160 professionals. Rimini Street achieved a 95% annual client renewal rate and more than a 99% client satisfaction rating.

14. One reason Oracle’s support customers switch to Rimini Street support is a 50% annual fee savings. Rimini Street is able to spend more money on each support client and offer lower fees by simply eliminating the excessive profits Oracle demands from its support customers. Also, due to Rimini Street’s dramatically different support model that includes no required upgrades or updates for a minimum of ten years, Rimini Street clients can achieve a total operating cost savings up to 90% over a decade compared to Oracle’s support model.

15. In addition to significant savings, Rimini Street’s different support model provides clients with “concierge” level, ultra-responsive service. Unlike Oracle’s generic call center approach, Rimini Street assigns each client a named, highly experienced Primary Support Engineer. Support services are available 24x7x365 with guaranteed 30 minute response time anywhere in the world and 90% guaranteed live call answering during the day. Rimini Street’s track-record of meeting these service level commitments and providing excellent service is well documented by leading industry analysts who work with Rimini Street clients, media interviews with Rimini Street clients, client side-by-side live service comparisons, client satisfaction surveys, and hundreds of client reference calls made by Rimini Street prospects.

16. Rimini Street’s different support model also includes many innovative services at no additional charge that go beyond the features of Oracle’s standard support. The additional Rimini Street services include performance support, interoperability support, and support for application customizations. The inclusion of these services represents significant cost savings for Rimini Street clients compared to the additional consulting fees Oracle would generally charge its customers for similar services.

17. Another benefit for Oracle clients who switch to Rimini Street support is a more robust and timely tax, legal and regulatory service spanning up to 190 countries for PeopleSoft and JD Edwards products. Rimini Street’s tax, legal and regulatory update design and development operation is led by veteran tax specialists, attorneys, executives, and engineers who bring a blend of international tax, legal and regulatory expertise. As part of Rimini Street’s commitment to the highest quality deliverables, Rimini Street’s tax, legal and regulatory development process has been audited from scoping to delivery for Sarbanes Oxley 404 process compliance by a Big Four accounting firm.

18. Rimini Street has already delivered more than 5,000 high-quality tax, legal and regulatory updates to its clients over the years, and is currently responsible for the accurate processing of billions of dollars in transactions a month. Further, Rimini Street has delivered every one of its tax, legal and regulatory updates to clients ahead of Oracle’s planned delivery date for its equivalent updates since the inception of the company. Rimini Street clients praise the quality, comprehensiveness and timely delivery of Rimini Street’s tax, legal and regulatory updates in media interviews, client references for prospects, and press materials.

19. Rimini Street respects the intellectual property rights of Oracle. As detailed herein, Rimini Street takes extraordinary efforts, in both process and procedure, to ensure that Oracle’s intellectual property rights are respected by Rimini Street employees working with Oracle Software and Support Materials.

D. Oracle has a Long History of Trying to Stifle Rimini Street Competition.
20. The present lawsuit is only Oracle’s latest effort to stifle the competitive threat posed by Rimini Street.

21. Rimini Street began operations in September 2005, offering a competitive aftermarket support offering for Siebel Systems software products.

22. At about the same time Rimini Street began operations, Oracle Corporation announced that it intended to acquire Siebel Systems. Oracle completed the acquisition of Siebel Systems shortly thereafter.

23. Rimini Street added support offerings for Oracle’s PeopleSoft products in April 2006 and Oracle’s JD Edwards products in September 2006.

24. Since shortly after Rimini Street’s inception, Oracle began a systematic campaign to disrupt and halt Rimini Street’s business. Initially, Oracle’s efforts consisted of numerous hostile letters, some of which were published in the media as early as 2005 as examples of how Oracle was trying to forestall after-market competition from a just-launched Rimini Street.

25. Over the years, Rimini Street responded to each Oracle letter, explained the appropriateness of Rimini Street’s practices and procedures, and repeatedly offered to meet and discuss any questions or concerns Oracle might have about Rimini Street’s processes and procedures.

26. As Rimini Street’s success grew, so did Oracle’s determination and efforts to disrupt Rimini Street’s growth. Since the inception of the company, Rimini Street used automated download tools to help its clients identify and take delivery of the large volume of Oracle Software and Support Materials they paid for and were entitled to possess and use (potentially tens of thousand of files for a single customer). Using such automated tools was necessary because Oracle refused to help its customers identify and take delivery of such large volumes of materials.

27. In June 2007, Oracle attempted to intentionally interfere with Rimini Street’s authorized client downloads by changing its website terms and conditions to no longer allow use of such automated download tools. Rimini Street wrote Oracle when it became aware of the change, warning that Rimini Street believed Oracle’s actions were not only anti-competitive against Rimini Street, but also constituted a breach of its license agreements with Oracle clients that have protections against reductions in service rights resulting from changes by Oracle in support terms and conditions. As such, the reductions in service rights were not enforceable.
28. Oracle’s efforts escalated in December 2008 when Oracle began interfering with Rimini Street’s performance of an authorized download for a large client switching from Oracle to Rimini Street support by blocking Rimini Street access to the Oracle support websites. After correspondence from both the client and Rimini Street demanding Oracle cease and desist its accessblocking tactics, Oracle stopped the interference.

29. At this point, as a good-faith attempt at conflict reduction with Oracle, Rimini Street unilaterally agreed to cease using automated download tools in January 2009 and notified Oracle’s representatives of this decision in early February 2009.

30. Further, to prevent Oracle’s anti-competitive actions from occurring in the future, Rimini Street asked for and was finally granted a call with Oracle representatives in early February 2009. On the call, Rimini Street offered to share Rimini Street internal information with Oracle and/or to work out an agreement that would utilize an independent third party auditor reporting back to both parties to confirm Rimini Street’s compliance with its standard processes and procedures. Oracle never responded to any of Rimini Street’s proposals.

E. Oracle Ignores Truth, Turns to False Allegations
31. Ignoring Rimini Street’s open invitation to view internal information, engage a third party auditor, or even hold additional dialogue, Oracle filed this baseless lawsuit in an attempt to disrupt Rimini Street’s growth and damage Rimini Street’s business through false statements and disparagement.

32. For example, Oracle maliciously casts Rimini Street as a “sham” company that steals Oracle Software and Support Materials and resells them at half the price Oracle charges. Oracle further disparages Rimini Street’s business by branding it an “illegal business model” and “illegal scheme.” Similarly, Oracle falsely states that there has been “massive theft of Oracle’s software and related support materials by Rimini Street.” As Oracle is well aware, these characterizations of Rimini Street’s business are not only completely false, but they could not be further from the truth.

33. Rimini Street has informed Oracle that, as a matter of process and procedure, Rimini Street’s clients are only delivered the Oracle Software and Support Materials to which they are legally entitled. In fact, Rimini Street performs a unique download of Oracle Software and Support Materials from Oracle’s web sites on behalf of each of its clients who: (a) requests and authorizes Rimini Street to download from Oracle on their behalf a unique set of Oracle Software and Support Materials the customer is entitled to use based on their licensed products and Oracle Annual Support product coverage; and (b) represents they are presently an Oracle Annual Support customer whose Oracle Annual Support period has not expired.

34. Oracle is further aware that each of Rimini Street’s clients has a unique data “silo” for storing clients’ Oracle Software and Support Materials. Therefore, the clients’ Oracle Software and Support Materials are not physically co-mingled together. Despite its awareness of Rimini Street’s processes and procedures, Oracle states that Rimini Street has “stockpile[d] a library” of Oracle’s intellectual property “to support its present and prospective customers.” Such a “library” has never existed at Rimini Street, and Oracle is aware of that fact and could easily have confirmed it by simply accepting Rimini Street’s offer of third party verification.

35. If Oracle really had genuine concerns about the use of its intellectual property and its aims were to simply find the truth and to protect its intellectual property, Oracle has had unlimited opportunities over nearly five years to dialogue and work directly with Rimini Street per the numerous open invitations extended in Rimini Street letters to Oracle. But, as the facts demonstrate, that is not Oracle’s objective. Instead, Oracle’s goal is to forestall after-market product support competition from Rimini Street. Litigation is Oracle’s strategy.

36. While Oracle attempts to disparage Rimini Street and falsely cast this case as being about a “massive theft” that does not exist, the truth is this case is only about Oracle’s attempt to protect its 95% dominant market share and monopoly-like 92% gross margins on after-market support of its products.

RIMINI STREET’S COUNTERCLAIMS
For its Counterclaims against Plaintiffs, Rimini Street states as follows:
….
COUNT ONE—DEFAMATION, BUSINESS DISPARAGEMENT AND TRADE LIBEL
42. Rimini Street repeats and incorporates by reference the averments set forth in Paragraphs 1–41 as though fully set forth herein.

43. Oracle has responded to Rimini Street’s success, not through fair marketplace competition, but with incendiary and unfounded allegations that Rimini Street and its employees are thieves carrying out a “corrupt” and “illegal business model.”

44. On information and belief, defamatory statements have been published and republished by Oracle and its agents to members of the media and analyst community, Rimini Street’s customers and potential customers, as well as to the public at large. For example, an Oracle representative contacted a senior analyst for an influential analyst firm and made statements insinuating that Rimini Street’s practices were illegal. Similar allegations of illegality were made to other analysts, analyst firms and members of the media, reflecting an attempt by Oracle to severely tarnish Rimini Street’s standing in the industry. On information and belief, Rimini Street expects discovery will illuminate a pattern of similar defamatory communications by Oracle representatives.

45. Oracle’s false and disparaging statements were intended to harm Rimini Street’s standing in the business community and, ultimately, to hinder Rimini Street’s ability to conduct and grow its business.

46. Oracle published its disparaging statements about Rimini Street’s business maliciously, knowing such statements are false or with reckless disregard to their falsity.

47. Dating back to the launch of Rimini Street in 2005, Oracle and Rimini Street have had a long history of communications. Given these interactions, Oracle is well aware that Rimini Street’s business practices are not illegal as Oracle has alleged and published.

48. And, Oracle has had no basis to believe in this stated illegality of Rimini Street’s business practices. Oracle attempts to equate Rimini Street’s business with that of TomorrowNow, an unrelated and different third-party support vendor owned by SAP AG, another vendor of enterprise software. Oracle filed suit against TomorrowNow and SAP AG in 2007. Although Oracle’s present Complaint against Rimini Street is highly similar to Oracle’s Complaint against SAP AG, et al., in Case No. 07-CV-1658 in the Northern District of California, Oracle is well aware of the significant differences between Rimini Street’s practices and procedures and those of SAP’s TomorrowNow. For instance, Rimini Street does not have or make available a “single repository” of downloaded Oracle Software and Support Materials as Oracle states. Nor does Rimini Street mixed or consolidated Oracle Software and Support Materials such that unique downloads for one client are co-mingled with unique downloads from other clients, and support materials are not indiscriminately downloaded and stored for general use.

49. Oracle is further aware that Rimini Street performs a unique download of Oracle Software and Support Materials on behalf of each client that requests such service. Each client (authorizing Rimini Street to act on client’s behalf) warrants to Rimini Street that it has the rights to access Oracle’s support web sites and take possession of the requested Oracle Software and Support Materials. Rimini Street then maintains downloaded material only on behalf of the client for whom the download was performed. To safeguard against improper use of downloaded materials, as a matter of process and procedure, each client is assigned a separate data “silo” where Oracle Software and Support Materials for that client are maintained, and Rimini Street does not co-mingle the independent downloads of clients.

50. Rimini Street delivers to each client only the software and support material that each client is entitled to receive, which often are quite voluminous and can consist of thousands or even tens of thousands of materials.

51. Oracle is further aware that Rimini Street has consistently released its own independently-created regulatory and tax updates before the release date of Oracle’s equivalent update, forestalling any arguments that Rimini Street copied Oracle’s updates.

52. Finally, Oracle cannot truthfully claim that Rimini Street is not authorized to possess copies of Oracle’s software. First, every Rimini Street client contract authorizes Rimini Street to possess or access copies of the client’s licensed software. Second, as Oracle is well aware, it is common industry practice by other third party consulting venders such as IBM, AT&T, Accenture, Navisite, WTS, CedarCrestone, and virtually every other hosting service provider to possess and work with copies of their client’s licensed software products. Third, until recently Oracle itself directly mailed or made available to Rimini Street through authorized downloads, as an authorized agent of Oracle’s licensees, copies of the clients’ licensed Oracle software. Oracle and Rimini Street personnel worked closely together over the years in the software order-to-ship process for hundreds of clients. Here again, Oracle had full knowledge that Rimini Street’s actions were authorized by Oracle’s customers. Far from acting as “fraudulent thieves,” Rimini Street has acted legally, openly (and often with Oracle’s full cooperation), and in accordance with the agreements held by Rimini Street’s clients.

53. Oracle is aware of the falsity of its statements because it was directly informed by Rimini Street of the true facts. Further, Rimini Street offered to allow Oracle to employ a neutral third party to audit Rimini Street’s compliance with its processes and procedures. Instead of undertaking this reasonable confirmatory exercise, Oracle purposely and recklessly made the above identified false and disparaging statements regarding Rimini Street.

54. Rimini Street has been damaged by Oracle’s conduct as complained of herein, in an amount to be determined at trial. On information and belief, Oracle’s false and disparaging statements regarding Rimini Street’s business have directly led to economic loss on the part of Rimini Street through specific loss of sales.

COUNT TWO—DECLARATION OF UNENFORCEABILITY FOR COPYRIGHT MISUSE
55. Rimini Street repeats and incorporates by reference the averments set forth in Paragraphs 1–54 as though fully set forth herein.

56. Oracle claims to own a valid and enforceable copyright in, or have exclusive license to, all of their software applications and software and support materials.

57. Oracle disseminates Oracle Software and Support Materials via electronic transmissions over a computer network. Oracle’s Software and Support Materials websites contain “browser-wrap” or “click-wrap” agreements.

58. Oracle has admitted that its software licensees have every right to use third-party maintenance and support vendors (such as Rimini Street). However, Oracle has attempted to use the design of its support website and terms of its “browser-wrap” or “click-wrap” agreements on various Oracle web sites to forestall such legal competition from Rimini Street and to interfere with a customer’s ability to select a support vendor other than Oracle. This attempt to influence competition in an area beyond the scope of Oracle’s copyrights constitutes copyrights misuse.

59. Instead of simply providing its customers each of the support files they are entitled to possess under their respective licenses and unexpired Oracle annual support, Oracle requires customers to self-identify and individually download each such file from Oracle’s support material web portal. This portal contains millions of files to sort through and all are accessible to every client, regardless of which products a customer has licensed or whether or not a product is covered by an unexpired Oracle support agreement. Oracle provides no assistance to its support customers in the identification of all Oracle Software and Support Materials such customer is entitled to possess and use.

60. Though Oracle’s support material web portal does not provide a method for customers to easily identify and download all the files they are entitled to possess and use, Oracle has changed its web site terms to prohibit the use of automated tools that can help an Oracle customer identify and download a significant volume of Oracle Software and Support Materials to which an Oracle licensee and support customer is entitled. Further, Oracle’s “click-wrap” agreement has once again been changed, and now includes a provision that prohibits access to and download of support materials unless such access or download “is in furtherance of the relationship between customer and Oracle.” This provision is another clear example of Oracle’s systematic use of anticompetitive tactics to try and maintain a stranglehold over its customers by effectively requiring them to either continue purchasing after-market support only from Oracle or forego critical support materials to which they are entitled and for which they have already paid.

61. Through its various license agreements and changing web site access and use terms and conditions, Oracle is attempting to use its copyright in a manner adverse to the public policy embodied in copyright law.

62. The requirements Oracle places on the ability of customers (or their agents) to obtain licensed software and support materials gives Oracle a substantial and unfair advantage over its support and maintenance competitors, and these requirements constitute a misuse of copyright by Oracle.

63. Rimini Street has been directly harmed by Oracle’s anticompetitive misuse of its copyrights and license agreements.

64. Rimini Street is therefore entitled to a declaratory judgment finding Oracle’s copyrights to be unenforceable until that time that Oracle discontinues use of the terms that led to misuse of its copyrights.

COUNT THREE—UNFAIR COMPETITION—CAL. BUS. & PROF. CODE § 17200
65. Rimini Street repeats and incorporates by reference the averments set forth in Paragraphs 1–64 as though fully set forth herein.

66. Oracle has engaged in fraudulent business acts or practices by false and misleading statements, deceptive business practices, ever-changing contract terms and policies, processes, and procedures.

67. As evidence of Oracle’s fraudulent business practices, on information and belief, Oracle caused false and disparaging allegations to be published and republished by Oracle and its agents to members of the media and analyst community, Rimini Street’s customers and potential customers, as well as to the public at large. These allegations were made with Plaintiffs’ intent to, and are likely to, deceive members of the public.

68. Oracle has also employed unlawful and/or fraudulent business practices in its dealings with industry analysts, reporters and Rimini Street’s customers and potential customers. For example, Oracle has provided false and misleading information about Rimini Street to customers with which Rimini Street had established a potential business relationship.

69. The acts and conduct of Oracle constitute fraudulent conduct as defined by California Bus. & Prof. Code §§ 17200, et seq.

70. As a result of Oracle’s actions, Rimini Street has suffered irreparable injury, and Rimini Street’s standing in the business community has been harmed. Unless Oracle is enjoined, Rimini Street will continue to suffer irreparable harm and Oracle’s conduct will continue to harm Rimini Street’s standing in the business community, and ultimately hinder Rimini Street’s ability to conduct and grow its business.

71. Oracle should be compelled to disgorge and/or restore any and all revenues, earnings, profits, compensation, and benefits they may have obtained in violation of California Business & Professions Code § 17200 et seq., including, but not limited to, returning any revenue earned as a proximate result of the unlawful publication of the deceptive statements made to the public.

by Frank Scavo, 3/29/2010 08:24:00 AM | permalink | e-mail this!

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 Reader Comments:

That's very informative topic you have written. I agree and understand about it. And thanks for the link. I already have it, done download.
 
really do believe in oracle. i have once knew that can really predicted. so cool
 
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