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Oracle USA, Inc. v. Rimini Street, Inc.

United States District Court, D. Nevada

August 13, 2014

ORACLE USA, INC.; et al., Plaintiffs,
v.
RIMINI STREET, INC., a Nevada corporation; SETH RAVIN, an individual; Defendants

Decided August 12, 2014

Page 1109

[Copyrighted Material Omitted]

Page 1110

[Copyrighted Material Omitted]

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For Oracle USA, Inc., Oracle International Corporation, Plaintiffs, Counter Defendants: Dorian E. Daley, LEAD ATTORNEY, Deborah K. Miller, James C Maroulis, Oracle Corporation, Redwood City, CA; Gabrielle Hann, PRO HAC VICE, Bingham McCutchen, San Francisco, CA; Geoffrey M. Howard, Kristen A. Palumbo, PRO HAC VICE, John A. Polito, Thomas S. Hixson, Bingham McCutchen LLP, San Francisco, CA; Steven Holtzman, Boies, Schiller & Flexner, LLP, Oakland, CA; Richard J. Pocker, Boies Schiller & Flexner, LLP, Las Vegas, NV.

For Oracle America, Inc., Oracle America, Inc., Plaintiff: Gabrielle Hann, Bingham McCutchen, San Francisco, CA; Geoffrey M. Howard, John A. Polito, Thomas S. Hixson, Bingham McCutchen LLP, San Francisco, CA; Kieran Ringgenberg, Boies, Schiller & Flexner, LLP, Oakland, Ca; Richard J. Pocker, Boies Schiller & Flexner, LLP, Las Vegas, NV.

For Rimini Street, Inc., Defendant: Leslie A.S. Godfrey, LEAD ATTORNEY, Brandon E. Roos, Mark G Tratos, Greenberg Traurig LLP, Las Vegas, NV; B Trent Webb, PRO HAC VICE, Shook, Hardy & Bacon L.L.P., Kansas City, MO; Robert H Reckers, PRO HAC VICE, Shook, Hardy & Bacon LLP, Houston, TX; W. West Allen, Lewis Roca Rothgerber LLP, Las Vegas, NV.

For Seth Ravin, Defendant: Leslie A.S. Godfrey, LEAD ATTORNEY, Brandon E. Roos, Mark G Tratos, Greenberg Traurig LLP, Las Vegas, NV; Robert H Reckers, PRO HAC VICE, Shook, Hardy & Bacon LLP, Houston, TX; W. West Allen, Lewis Roca Rothgerber LLP, Las Vegas, NV.

For CedarCrestone, Inc., Interested Party: Dominica C. Anderson, LEAD ATTORNEY, Duane Morris, LLP, Las Vegas, NV.

For Rimini Street, Inc., Rimini Street, Inc., Counter Claimants: Leslie A.S. Godfrey, LEAD ATTORNEY, Mark G Tratos, Greenberg Traurig LLP, Las Vegas, NV; B Trent Webb, PRO HAC VICE, Shook, Hardy & Bacon L.L.P., Kansas City, MO; Robert H Reckers, PRO HAC VICE, Shook, Hardy & Bacon LLP, Houston, TX; W. West Allen, Lewis Roca Rothgerber LLP, Las Vegas, NV.

For Oracle USA, Inc., Oracle International Corporation, Oracle USA, Inc., Oracle International Corporation, Oracle USA, Inc., Counter Defendants: Dorian E. Daley, LEAD ATTORNEY, Deborah K. Miller, James C Maroulis, Oracle Corporation, Redwood City, CA; Gabrielle Hann, PRO HAC VICE, Bingham McCutchen, San Francisco, CA; Geoffrey M. Howard, Kristen A. Palumbo, PRO HAC VICE, Bingham McCutchen LLP, San Francisco, CA; John A. Polito, Thomas S. Hixson, Bingham McCutchen LLP, San Francisco, CA; Steven Holtzman, Boies, Schiller & Flexner, LLP, Oakland, CA; Richard J. Pocker, Boies Schiller & Flexner, LLP, Las Vegas, NV.

For Seth Ravin, Seth Ravin, Counter Claimants: Leslie A.S. Godfrey, LEAD ATTORNEY, Mark G Tratos, Greenberg Traurig LLP, Las Vegas, NV; W. West Allen, Lewis Roca Rothgerber LLP, Las Vegas, NV.

For Oracle America, Inc., Oracle America, Inc., Counter Defendant: Geoffrey M. Howard, LEAD ATTORNEY, Thomas S. Hixson, Bingham McCutchen LLP, San Francisco, CA; Kieran Ringgenberg, Boies, Schiller & Flexner, LLP, Oakland, Ca; Richard J. Pocker, Boies Schiller & Flexner, LLP, Las Vegas, NV.

For Rimini Street, Inc., Counter Claimant: Leslie A.S. Godfrey, LEAD ATTORNEY, Brandon E. Roos, Mark G Tratos, Greenberg Traurig LLP, Las Vegas, NV; B Trent Webb, Shook, Hardy & Bacon L.L.P., Kansas City, MO; Robert H Reckers, PRO HAC VICE, Shook, Hardy & Bacon LLP, Houston, TX; W. West Allen, Lewis Roca Rothgerber LLP, Las Vegas, NV.

For Oracle America, Inc., Oracle America, Inc., Counter Defendant: John A. Polito, Thomas S. Hixson, Bingham McCutchen LLP, San Francisco, CA; Kieran Ringgenberg, Boies, Schiller & Flexner, LLP, Oakland, Ca; Richard J. Pocker, Boies Schiller & Flexner, LLP, Las Vegas, NV.

OPINION

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LARRY R. HICKS, UNITED STATES DISTRICT JUDGE.

ORDER

Before the court is plaintiffs Oracle USA, Inc.; Oracle America, Inc.; and Oracle International Corporation's (collectively " Oracle" ) second motion for partial summary judgment addressing their first cause of action for copyright infringement; defendant Rimini Street, Inc.'s (" Rimini" ) second, eighth, and ninth affirmative defenses; and Rimini's first and third counterclaims. Doc. #405.[1] Defendant Rimini filed an opposition to the motion (Doc. #436), to which Oracle replied (Doc. #450).

I. Facts and Procedural History

Oracle develops, manufacturers, and licenses computer software, including Enterprise Software platforms.[2] Oracle is

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the current owner and/or exclusive licensee for various PeopleSoft, J.D. Edwards, and Siebel-branded Enterprise Software products. Oracle's Enterprise Software platforms have both an installed database component and an installed application component. The database component provides a foundation for the application software which then uses, stores, and retrieves data in the database for use across an entire organization. Oracle's Enterprise Software application programs - including its PeopleSoft, J.D. Edwards, and Siebel-branded products - are run on Oracle's Relational Database Management Software (" Oracle Database" ) as the database component for the programs.

Rather than sell Oracle Database outright, Oracle licenses the use of the database software to customers through software licensing agreements - known as Oracle License and Service Agreements (" OLSAs" ) - and to other software developers through a Developer License. Oracle also provides support services to its customers through separate software support service contracts.

Defendant Rimini is a company that provides similar software support services to customers licensing Oracle's Enterprise Software programs and competes directly with Oracle to provide these services.

On January 25, 2010, Oracle filed a complaint alleging that Rimini copied several of Oracle's copyright-protected software programs onto its own computer systems in order to provide software support services to its customers. In its complaint, Oracle alleged thirteen causes of action against Rimini: (1) copyright infringement; (2) violation of the Federal Computer Fraud and Abuse Act (" CFAA" ), 18 U.S.C. § § 1030(a)(2)(C), (a)(4), & (a)(5); (3) violation of the California Computer Data Access and Fraud Act (" CDAFA" ), Cal. Penal Code § 502; (4) violation of Nevada Revised Statutes (" NRS" ) § 205.4765; (5) breach of contract; (6) inducement of breach of contract; (7) intentional interference with prospective economic advantage; (8) negligent interference with prospective economic advantage; (9) unfair competition; (10) trespass to chattels; (11) unjust enrichment; (12) unfair practices; and (13) accounting. Doc. #1.

On March 29, 2010, Rimini filed an answer contesting Oracle's claims and alleging three counterclaims: (1) defamation, business disparagement, and trade libel; (2) copyright misuse; and (3) unfair competition in violation of California Business and Professional Code, Cal. BPC. § 17200. Doc. #30. Rimini also raised eleven affirmative defenses to Oracle's claims: (1) invalid copyrights; (2) express license; (3) consent of use; (4) copyright misuse; (5) improper registration; (6) implied license; (7) merger; (8) statute of limitations; (9) laches; (10) fair use; and (11) limitations on exclusive rights of computer programs under 17 U.S.C. § 117. Id.

In April 2010, Oracle filed an amended complaint (Doc. #36) to which Rimini filed an amended answer (Doc. #46) and a motion to dismiss (Doc. #48). On August 13, 2010, the court granted in-part and denied in-part Rimini's motion, dismissing

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Oracle's eighth cause of action for negligent interference with prospective economic advantage. Doc. #78.

In response to Rimini's amended answer, Oracle filed a motion to dismiss Rimini's counterclaims and affirmative defenses. Doc. #67. On October 29, 2010, the court granted in-part and denied in-part Oracle's motion, dismissing several defamation allegations from Rimini's first counterclaim for defamation, and dismissing the entirety of Rimini's second counterclaim and fourth affirmative defense for copyright misuse. Doc. #111.

In June 2011, Oracle filed a second amended complaint. Doc. #146. In response, Rimini filed its second amended answer raising six additional affirmative defenses: (12) contract defense; (13) privilege; (14) economic interest; (15) consent; (16) preemption; (17) lack of contract; and (18) mitigation of damages. Doc. #153. After the filing of Rimini's second amended answer Oracle filed its initial motion for partial summary judgment addressing its first cause of action for copyright infringement as it related to Oracle's PeopleSoft, J.D. Edwards, and Siebel-branded Enterprise Software programs; and on Rimini's second, third, and sixth affirmative defenses. Doc. #237. On February 13, 2014, the court granted in-part and denied in-part Oracle's initial motion for partial summary judgment. See Doc. #474.

Subsequently, Oracle filed the present second motion for partial summary judgment addressing its first cause of action for copyright infringement; Rimini's second, eighth, and ninth affirmative defenses; and Rimini's first and third counterclaims. Doc. #405.

II. Legal Standard

Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that " there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).

The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is " sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001).

To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736, 738 (9th Cir. 2000). A " material fact" is a fact " that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine " if the evidence is such that a reasonable jury

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could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See id. at 252.

III. Discussion

This motion concerns Oracle's first cause of action for copyright infringement as it relates to defendant Rimini's alleged copying of Oracle Database. See Doc. #405. This motion also concerns Rimini's second affirmative defense for express license as it relates to Oracle Database; eighth affirmative defense for statute of limitations; ninth affirmative defense for laches; first counterclaim for defamation, business disparagement and trade libel; and third counterclaim for unfair competition in violation of California Business and Professional Code, Cal. BPC § 17200. Id. The court shall address each issue separately below.

A. Copyright Infringement (First Cause of Action)

To establish a prima facie case of copyright infringement, Oracle must show (1) ownership of the relevant copyrights, and (2) copying of protected expression by Rimini. Range Road Music, Inc. v. East Coast Foods, Inc., 668 F.3d 1148, 1153 (9th Cir. 2012); Funky Films, Inc. v. Time Warner Entm't Co., 462 F.3d 1072, 1076 (9th Cir. 2006).

Oracle's claim for copyright infringement, as it relates to the present motion, arises from Rimini's copying and use of six copyrighted versions of Oracle Database. It is undisputed that Oracle owns all six copyrights at issue. See Doc. #400, Amended Stipulation Re: Copyright Registration and Copies, ¶ 8 (" For the purposes of this action, [Rimini] will not dispute that [Oracle] is the owner or exclusive licensee of the 100 registered works listed in Exhibit A); Exhibit A (listing TX 5-222-106 (Oracle 8i Enterprise: Edition Release 2 (8.1.6)), TX 5-673-282 (Oracle 9i Database Enterprise Edition, Release 2), TX 6-938-648 (Oracle Database 10g: Release 1), TX 6-942-003 (Oracle Database 10g: Release 2), TX 7-324-157 (Oracle Database 11g: Release 1), and TX 7-324-158 (Oracle Database 11g: Release 2)). Further, it is undisputed that Rimini copied Oracle's copyright protected software when it built development, or non-production, environments for a number of Rimini customers using Oracle Database.[3] See e.g., Doc. #411, Exhibit 25, Attachment B to Rimini's First Supp. Response to Interrogatory 18 (identifying twenty-five (25) separate copies of Oracle Database on Rimini's servers). Based on these undisputed facts, the court finds that Oracle has established a prima facie case of copyright infringement. See e.g., Triad Sys. Corp. v. Se. Express Co.,

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64 F.3d 1330, 1335 (9th Cir. 1995) ( prima facie case of copyright infringement found where defendant was " copying [plaintiff's] entire [computer] programs" in order to provide software and maintenance support); MAI Sys. Corp. v. Peak Computer Corp., 991 F.2d 511, 517-19 (9th Cir. 1993) (affirming summary judgment on the claim of copyright infringement where defendant copied plaintiff's software onto its systems to provide competing software maintenance services).

However, Oracle's claim of copyright infringement is subject to Rimini's challenged affirmative defense of express license. Therefore, the court must address this affirmative defense before determining whether Oracle is entitled to summary judgment on this claim.

B. Express License (Second Affirmative Defense)

Express license is an affirmative defense. Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d 1110, 1114 (9th Cir. 2000). As the party alleging the affirmative defense, Rimini has the initial burden to identify any license provision(s) that it believes excuses its infringement. Michaels v. Internet Entm't Group, Inc., 5 F.Supp.2d 823, 831 (C.D. Cal. 1998). If Rimini identifies any relevant license provision, Oracle may overcome the defense of express license by showing that Rimini's conduct exceeded the scope of that provision. LGS Architects, Inc. v. Concordia Homes, 434 F.3d 1150, 1156 (9th Cir. 2006).

Construing the scope of a license is principally a matter of contract interpretation. S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088 (9th Cir. 1989). The starting point for the interpretation of any contract is the plain language of the contract. Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 1999) (" Whenever possible, the plain language of the contract should be considered first." ). When a contract contains clear and unequivocal provisions, those provisions shall be construed according to their usual and ordinary meaning. Id. Then, using the plain language of the contract, the court shall effectuate the intent of the parties. Id. at 1210 (" Contract terms are to be given their ordinary meaning, and when the terms of a contract are clear, the intent of the parties must be ascertained from the contract itself." ). However, if a contract term is ambiguous, the court may look beyond the plain language of the contract to determine the intent of the parties. See e.g., Foad Consulting Grp., Inc. v. Azzalino, 270 F.3d 821, 828 (9th Cir. 2001) (" If a party's extrinsic evidence creates the possibility of an ambiguity, a court may not rely on the text of the contract alone to determine the intent of the parties." ). A contract term is ambiguous if it is " reasonably susceptible to more than one interpretation." Shelton v. Shelton, 119 Nev. 492, 78 P.3d 507, 510 (Nev. 2003).

In its express license affirmative defense, Rimini asserts that its copying of Oracle Database was expressly authorized by both the Developer License and its own clients' OLSAs. As each license is different in scope and application, the court shall address each license separately.

1. Developer License

As part of its business model, Oracle makes copies of Oracle Database available for download from the Oracle Technology Network website (" OTN" ). These copies of Oracle Database are provided free of charge to software developers to facilitate the development of new software applications that will run on Oracle Database as the database component. The obvious and undisputed purpose of offering Oracle Database free of charge ...


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