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December 4, 2021

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Courtroom showdown pits Oracle against Las Vegas tech firm

Nearly six years have passed since software behemoth Oracle sued Las Vegas tech company Rimini Street for copyright infringement in a Nevada federal court. With attorneys offering closing arguments on Monday, the trial could be nearing an end.

The long-term health of Rimini Street hinges on an outcome that chief information officers across the technology industry will be watching closely.

“If the case goes strongly against (Rimini Street), it could be a serious impediment to their whole business model,” said Frank Scavo, who runs Strativa, a California-based consulting firm that helps companies evaluate software vendors.

Previously, Judge Larry Hicks found that the Vegas tech firm violated Oracle's copyrights in providing maintenance to companies running the software of the tech giant founded by Larry Ellison. A jury is now tasked with determining damages. Oracle seeks $245.9 million; Rimini believes that number should be $9.3 million. The jury must also decide whether the Las Vegas firm is liable for violating the copyright of two additional Oracle products and assessing resultant damages.

Oracle makes a majority of its sales from annual payments on maintenance and upgrades. Rimini Street is one of few third-party companies that provides maintenance on Oracle products — at a steep comparative discount.

In its initial complaint, Oracle alleged that “this case is about the massive theft of Oracle’s software and related support material through an illegal business model.” Rimini Street disagreed. “This trial involves a good-faith dispute over software license terms as applied to specific support processes formerly used at Rimini Street,” said a company spokesperson.

Scavo said the case could set a precedent for third-party maintenance providers: “This case is going to establish the ground rules upon which a third party can operate within legal restraints.” Oracle argued that the lawsuit would not be an assault on third-party maintenance providers as a whole but limited only to Rimini Street, which has 1,080 clients and recently expanded its Las Vegas office.

Brian Sommer, an analyst and former partner at management consulting firm Accenture, said the issues the case raised were gradually becoming moot, as more companies have shifted to cloud-based management software that requires less manual support. Technology executives are still watching the case because in the short-term, many companies will continue using the Oracle products. In the future, however, the dispute may prove irrelevant, he said. “I wouldn’t be too interested if fax machine companies were suing each other.”

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