Oracle USA, Inc., a Colorado corporation; Oracle America, Inc., a Delaware corporation; Oracle International Corporation, a California corporation, Plaintiffs-Appellees,
Rimini Street, Inc., a Nevada corporation; Seth Ravin, an individual, Defendants-Appellants.
and Submitted July 13, 2017 San Francisco, California
from the United States District Court for the District of
Nevada Larry R. Hicks, District Judge, Presiding D.C. No.
A. Perry (argued) and Jeremy M. Christiansen, Gibson Dunn
& Crutcher LLP, Washington, D.C.; Blaine H. Evanson,
Joseph A. Gorman, and Joseph C. Hansen, Gibson Dunn &
Crutcher LLP, Los Angeles, California; for
D. Clement (argued), Erin E. Murphy, and Matthew D. Rowen,
Kirkland & Ellis LLP, Washington, D.C.; William A.
Isaacson and Karen L. Dunn, Boies Schiller & Flexner LLP,
Washington, D.C.; Thomas S. Hixson and John A. Polito, Morgan
Lewis & Bockius LLP, San Francisco, California; David B.
Salmons, Morgan Lewis & Bockius LLP, Washington, D.C.;
Williams and Aileen Nguyen, San Francisco, California, as and
for Amicus Curiae Electronic Frontier Foundation.
Susan P. Graber and Michelle T. Friedland, Circuit Judges,
and Jeremy D. Fogel, [*] District Judge.
panel affirmed in part, reversed in part, and vacated in part
the district court's judgment after a jury trial in favor
of Oracle USA, Inc., on its copyright infringement and
California and Nevada state law claims against Rimini Street,
Inc., a provider of third-party support for Oracle's
enterprise software, and Seth Ravin, Rimini's CEO.
licenses its software and also sells its licensees
maintenance contracts. The maintenance work includes software
updates. In order to compete effectively with Oracle's
direct maintenance services, Rimini needed to provide
software updates to its customers. With Oracle's
knowledge, Rimini copied Oracle's copyrighted software in
order to provide the updates. Rimini obtained software from
Oracle's website with automated downloading tools in
direct contravention of the terms of the website.
panel affirmed the district court's partial summary
judgment and partial judgment after trial on Oracle's
claims that Rimini infringed its copyright by copying under
the license of one customer for work performed for other
existing customers or for unknown or future customers, rather
than restricting such copying to work for that particular
customer. The panel concluded that Rimini's activities
were not permissible under the terms of the licenses Oracle
granted to its customers. The panel rejected Rimini's
argument that holding it accountable for its alleged conduct
would condone misuse of Oracle's copyright.
panel reversed the district court's judgment after trial
with respect to Oracle's claims under the California
Comprehensive Data Access and Fraud Act, the Nevada Computer
Crimes Law, and California's Unfair Competition Law. The
panel held that taking data from a website, using a method
itself generally is permitted, does not violate the CDAFA or
the NCCL. Accordingly, Rimini did not violate these computer
abuse statutes by using automated tools to take data in
the district court granted judgment in favor of Oracle on
Oracle's Unfair Competition Law claim based on its
finding that Rimini violated the CDAFA, the panel reversed
the district court's determination that Rimini violated
California's Unfair Competition Law.
panel reduced the district court's award of damages by
the amount based on Rimini's alleged violation of the
CDAFA and NCCL. The panel affirmed the district court's
award of prejudgment interest on the copyright claims.
panel reversed the district court's permanent injunction
based on alleged violations of the CDAFA. The panel vacated
the district court's permanent injunction based on
copyright infringement because the district court assessed
the relevant factors by reference to both the copyright and
the CDAFA claims, without considering separately the
propriety of issuing an injunction as to the copyright claims
panel reversed the district court's judgment with respect
to Ravin's liability for attorneys' fees. As to
Rimini, the panel vacated the fee award and remanded for
reconsideration in light of Oracle's more limited success
at litigation in view of the panel's conclusion that
there was no violation of the state computer laws.
panel reduced the district court's award of taxable costs
and affirmed its award of non-taxable costs.
USA, Inc. and related entities (collectively,
"Oracle") licenses its proprietary enterprise
software for a substantial one-time payment. Oracle also
sells its licensees maintenance contracts for the software
that are renewed on an annual basis. The maintenance work
includes software updates, which Oracle makes available to
purchasers of the contracts through its support website.
relevant times, Rimini Street, Inc. ("Rimini')
provided third-party support for Oracle's enterprise
software, in lawful competition with Oracle's direct
maintenance services. But in order to compete effectively,
Rimini also needed to provide software updates to its
Creating these software updates inherently required copying
Oracle's copyrighted software, which, unless allowed by
license, would be copyright infringement. With Oracle's
knowledge, Rimini in fact did copy the software to provide
the updates. At least from late 2006 to early 2007, Rimini
obtained software from Oracle's website with automated
of the website.
filed suit against Rimini and Rimini's CEO, Seth Ravin
("Ravin"), in the District of Nevada in 2010. After
lengthy and sometimes contentious discovery and motion
practice, the district court granted partial summary judgment
to Oracle on certain aspects of Oracle's copyright
infringement claim, and a jury found in favor of Oracle on
others after trial. The jury also found against both Rimini
and Ravin with respect to Oracle's claims under the
California Comprehensive Data Access and Fraud Act
("CDAFA") and the Nevada Computer Crimes Law
("NCCL") (collectively, the "state computer
laws"). Based on the jury's determination with
respect to the CDAFA claim, the district court entered
judgment against Rimini and Ravin under California's
Unfair Competition Law ("UCL"). The jury awarded
damages in the sum of $50, 027, 000 which, when prejudgment
interest, attorneys' fees and costs were added, resulted
in a total monetary judgment of $124, 291, 396.82. The
district court also issued an extensive permanent injunction.
Rimini subsequently filed this timely appeal. The Electronic
Frontier Foundation ("EFF") has filed an amicus
brief with respect to the state computer law claims.
first principal dispute in this case is whether Rimini copied
Oracle's software in a manner that infringed Oracle's
copyright. It is undisputed that Rimini used Oracle's
software to develop and test updates for its customers and
that the software licenses, with certain restrictions,
permitted Oracle's licensees to hire Rimini to perform
such work for them. There are numerous subtleties involved
but, at the highest level of generality, Rimini's alleged
copyright infringement included copying under the license of
one customer for work for other existing customers or for
unknown or future customers, rather than restricting such
copying to work for that particular customer. The second
principal dispute is whether Rimini and Ravin violated
applicable state laws intended to prevent computer-based
fraud by flouting Oracle's restrictions against the use
of automated tools to download software from its website. We
also consider the appropriateness of the remedies awarded by
the district court.
explained below, we affirm the judgment with respect to the
copyright infringement claims. We also affirm the remedies
with respect to those claims, except that we vacate the
injunction and the award of attorneys' fees and remand
for reconsideration in light of this opinion. We modify the
district court's award of taxable costs as the parties
have agreed. We reverse the judgment with respect to
Oracle's claims under the state computer laws and the
Copyright Infringement Claims
Software in Suit
software products are at issue: J.D. Edwards, Siebel,
PeopleSoft, and Database. The products are related, but they
do not perform identical functions. As the district court
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.
Oracle USA, Inc. v. Rimini St., Inc., 6 F.Supp.3d
1108, 1113 (D. Nev. 2014) (" Oracle II
"). J.D. Edwards, Siebel, and PeopleSoft were
acquired by Oracle from other companies, while Oracle
developed Database internally.
of this history and because of the technical differences
among them, the licensing terms of the four products are not
identical. We first address J.D. Edwards and Siebel. We next
turn to PeopleSoft and, finally, to Database.
Edwards and Siebel
claims as to the J.D. Edwards and Siebel software were
submitted to the jury. Rimini appeals the district
court's denial of its motion for judgment as a matter of
law following the jury's verdict. "We review de novo
the district court's denial of a motion for judgment as a
matter of law. A renewed motion for judgment as a matter of
law is properly granted only 'if the evidence, construed
in the light most favorable to the nonmoving party, permits
only one reasonable conclusion, and that conclusion is
contrary to the jury's verdict." Castro v. Cty.
of Los Angeles, 833 F.3d 1060, 1066 (9th Cir. 2016) (en
banc) (citations omitted) (quoting Pavao v. Pagay,
307 F.3d 915, 918 (9th Cir. 2002)) (internal quotation mark
omitted), cert. denied, 137 S.Ct. 831 (2017).
"A jury's verdict must be upheld if it is supported
by substantial evidence, which is evidence adequate to
support the jury's conclusion, even if it is also
possible to draw a contrary conclusion." Id.
(quoting Pavao, 307 F.3d at 918) (internal quotation
challenges the jury's finding of copyright infringement
with respect to these products on two grounds. First, it
argues that its activities were permissible under the terms
of the licenses Oracle granted to its customers. Second, it
contends that holding it accountable for its alleged conduct
would condone copyright misuse. Neither of these arguments is
Express License Defense
be explained in further detail, there is no dispute that,
absent an applicable license, Rimini's accused acts
violated the exclusive right Oracle enjoys as owner of the
software copyright to copy or to modify the software. Rimini
asserts as an affirmative defense that its accused acts were
Supreme Court has explained the express license defense as
"Anyone who violates any of the exclusive rights of the
copyright owner, " that is, anyone who trespasses into
his exclusive domain by using or authorizing the use of the
copyrighted work in one of the five ways set forth in the
statute, "is an infringer of the copyright."
Conversely, anyone who is authorized by the copyright owner
to use the copyrighted work in a way specified in the statute
. . . is not an infringer of the copyright with respect to
Sony Corp. of Am. v. Universal City Studios, Inc.,
464 U.S. 417, 433 (1984) (quoting 17 U.S.C. § 501(a)).
Thus, "[t]he existence of a license creates an
affirmative defense to a claim of copyright
infringement." Worldwide Church of God v.
Phila. Church of God, Inc., 227 F.3d 1110, 1114 (9th
Cir. 2000). However, "[w]hen a licensee exceeds the
scope of the license granted by the copyright holder, the
licensee is liable for infringement." LGS
Architects, Inc. v. Concordia Homes of Nev., 434 F.3d
1150, 1156 (9th Cir. 2006).
Rimini itself did not have a license to copy or to modify
from Oracle, the success of Rimini's affirmative defense
turns on whether Rimini's accused acts came within the
scope of licenses held by its customers.
pertinent provisions of the J.D. Edwards and Siebel licenses
are excerpted below:
“Customer shall not, or cause anyone else
to . . . (iii) copy the Documentation or
Software except to the extent necessary for
Customer's archival needs and to support
“Customer” may “reproduce,
exactly as provided by [Oracle], a reasonable
number of copies of the Programs and the
Ancillary Programs solely for archive or
emergency back-up purposes or disaster recovery
and related testing.”
the language of the licenses themselves, the district
court's constructions of the two licenses when
instructing the jury were similar.
district court told the jury that it was permissible for
Rimini, as a third-party, to make copies of the Oracle
software to support its customers by archiving, backup, and
related testing. At the same time, the district court
instructed that the licenses "do not mean that a third
party like Rimini Street is authorized to make copies of the
. . . software application . . . to use the customer's
software . . . to support other customers."
produced by humans is rarely if ever perfect, and computer
software is no exception. Even casual users of computers are
familiar with regular software patches and updates intended
to correct glitches and to modify software in light of
unlike the off-the-shelf consumer software used by
individuals in everyday life, enterprise software employed by
large organizations is customized around the
organizations' specific needs. While producers of
consumer software generally design updates around standard
use cases and make them available for end users to download
and install directly, updates to enterprise software must be
tested and modified to fit with bespoke customizations before
being put to actual use.
testing process requires the creation of "development
environments." A "development environment, "
sometimes called a "sandbox, " is distinct from a
"production environment, " which is the
"live" version of the software that members of the
enterprise ultimately deploy. ...