ORACLE INTERNATIONAL CORPORATION V. RIMINI STREET, INC., No. 23-16038 (9th Cir. 2024)
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Oracle International Corporation sued Rimini Street, Inc. for copyright infringement and violations of the Lanham Act. Oracle alleged that Rimini, a third-party provider of software support services, infringed on its copyrights by using Oracle's software in unauthorized ways. Rimini had previously been found to infringe Oracle's copyrights and had changed its business model, seeking a declaratory judgment that its new processes did not infringe Oracle's copyrights. Oracle counterclaimed, leading to a bench trial.
The United States District Court for the District of Nevada found that Rimini's new processes still infringed Oracle's copyrights and issued a permanent injunction against Rimini. The court ordered Rimini to delete various software files and issue a press release correcting alleged misstatements. Rimini appealed the decision, challenging several aspects of the district court's rulings.
The United States Court of Appeals for the Ninth Circuit reviewed the case and vacated the district court's holding that Rimini created infringing derivative works based solely on interoperability with Oracle's programs. The court explained that a derivative work must incorporate Oracle's copyrighted work, either literally or nonliterally. The court also vacated the district court's ruling striking Rimini's affirmative defense under 17 U.S.C. § 117(a), which allows the owner of a copy of a computer program to make another copy for certain purposes.
Additionally, the Ninth Circuit vacated the district court's ruling that Rimini's creation of "gap customer" environments and use of automated tools to deliver PeopleSoft updates constituted copyright infringement. The court also reversed the district court's ruling that Rimini's security-related statements, except for one about "holistic security," constituted false advertising under the Lanham Act. The court vacated the portions of the injunction appealed by Rimini and remanded the case for further proceedings consistent with its opinion.
Court Description: Copyright Law In an action brought by software developer Oracle International Corporation against Rimini Street, Inc., under the Copyright Act and the Lanham Act, the panel vacated in part the district court’s permanent injunction against Rimini, a third-party provider and direct competitor with Oracle in the software support services market.
After the district court found that Rimini infringed on Oracle’s copyrights, Rimini changed aspects of its business model and sought a declaratory judgment that its revised process did not infringe Oracle’s copyrights. Oracle counterclaimed for copyright infringement and violations of the Lanham Act. Following a bench trial, the district court entered a permanent injunction ordering Rimini to (1) delete various software files, and (2) issue a press release correcting alleged misstatements and prohibiting Rimini from making similar statements about its services again.
The panel vacated the district court’s holding that Rimini created infringing derivative works based solely on Rimini’s programs’ interoperability with Oracle’s programs. The panel explained that a derivative work must actually incorporate Oracle’s copyrighted work, either literally or nonliterally. The panel instructed that if the district court concludes on remand that Rimini created an infringing derivative work under the correct legal standard, the district court should then consider whether any of Oracle’s licensing agreements authorized the creation of the specific work.
The panel vacated the district court’s ruling striking Rimini’s affirmative defense to copyright infringement under 17 U.S.C. § 117(a), which allows the owner of a copy of a computer program to make another copy for certain purposes, such as when it’s an essential step in using the program. The panel explained that the district court’s ruling seemingly relied only on the labeling of the agreements between Oracle and its customers as a “license,” but that is only one facet of a number of incidents of ownership.
The panel vacated the district court’s ruling that Rimini’s creation of 18 “gap customer” environments on its systems containing Oracle’s Database program infringed Oracle’s copyright, because the plain language of the licensing agreement did not prohibit third-party support providers from possessing a copy of Oracle’s software to further a client’s internal business operations.
The panel vacated the district court’s ruling that Rimini’s use of automated tools to deliver PeopleSoft program updates from one client to another constituted copyright infringement, to the extent that conclusion rested on the district court’s erroneous view of “derivative work.” The panel also vacated the district court’s ruling that the outright delivery of PeopleSoft updates to clients without further testing in the clients’ environments constituted copyright infringement, for the same reason. The panel instructed the district court to apply the correct legal standard for “derivative work” on remand.
The panel reversed the district court’s ruling that Rimini’s security-related statements constitute false advertising under the Lanham Act, except for a statement about “holistic security.” Some of the statements were about the relative security of services offered by Oracle and Rimini, which the panel held were puffery. Some of the statements were about the need for software patching, which the panel could not say were so specific and measurable as to become actionable under the Lanham Act. However, the panel affirmed the district court’s unrefuted finding that Rimini’s offer of holistic security, which the panel accepted to mean multi-layered security protection, was false because Rimini does not offer multi-level security. The panel vacated the injunction as it pertains to the non-actionable statements.
Because the panel vacated much of the district court’s ruling, the panel also vacated the portions of the injunction appealed by Rimini, and denied Rimini’s motion to stay enforcement of the permanent injunction as moot.
Dissenting in part, Judge Bybee disagreed with the majority’s conclusion that one of Rimini’s statements— “Oracle’s [Critical Patch Updates] provide little or no value to customers and are no longer relevant”—is puffery. Judge Bybee explained that the phrases “little or no value” and “no longer relevant” are absolute characteristics that can be falsified, as opposed to generalized statements of comparison. He would affirm the district court’s finding that this statement is actionable.
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