September 14, 2015

More than five years of discovery, motions, summary judgments, and pre-trial preparation now yields to jury selection, opening statements, and a courtroom showdown. The Oracle versus Rimini Street trial starts today. The trial is expected to last no longer than ten business days before jurors deliver their verdicts and amount of damages awarded.

The litigation stems from Oracle’s allegations that Rimini Street committed copyright infringement beginning in 2008 and continues to do so today. Oracle seeks $245.9 million in liability damages, which excludes any punitive damages and legal fees that may also be assessed.(1) Rimini Street counters that restitution should be capped below $10 million and that offending practices have long been corrected.(2)

Those of us associated with, and interested in, the third-party support market have watched this case carefully since it was originally filed in January 2010. Personally, I am excited to see this case finally draw to closure. The cloud on this market that Rimini Street has unnecessarily cast will soon be lifted. What is not on trial is the viability of the third-party support market. Oracle and SAP CEOs have publicly proclaimed that when delivered properly, third-party support is legal and that it’s fine to have software support choice.(3)(4) However, it doesn’t take a rocket scientist to understand that software vendors are entitled to the intellectual property they have researched, built, and brought to market. Copyright infringement is not required in order to deliver world-class software maintenance.

Spinnaker Support and Rimini Street may on one hand look similar in that we both provide third-party support for Oracle and SAP enterprise software applications.  However, this trial and verdict will make it abundantly clear that there are indeed stark differences between the two companies. Spinnaker Support has built its support models based on respect of the vendor’s IP and Rimini Street has not (alleged I suppose until the verdict is delivered). However, summary judgments have already been won by Oracle proving this point.(5) The industry will now get to see the extent of Rimini Street’s misdeeds and subsequently how the jury quantifies the damages.

As with any litigation, there will be both winners and losers. The real winners, when third-party support is exonerated, will be:

  • CIOs, CFOs, and progressive IT executives seeking safe and proven alternatives to their expensive software maintenance costs from the vendors.
  • Services firms who believe in building support models that protect the IP of software publishers.

Third-party support/maintenance is here to stay! The service, flexibility, and value that customers receive will be enjoyed for many years to come. Long after Judge Larry Hicks reads the verdict…

 

(1)   Publicly available pre-trial case records

(2)   Rimini Street press release, Oracle Abandons Its Largest Copyright Damages Theory Against Rimini Street, dated July, 16, 2015

(3)   Interview of Oracle CEO Mark Hurd by CRM.com, February 2011

(4)   Public statement by former SAP Co-CEO Jim Hagemann at SAPPHIRE NOW 2013

(5)   Partial judgments decided on February 13, 2014 and August 13, 2014

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