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1/26/2010
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Oracle Sues Rimini Street For 'Massive Theft'

Rimini's heavily discounted support offerings for Siebel, JD Edwards, and PeopleSoft apps are illegal, Oracle claims in court documents.

The battle between Oracle and Seth Ravin is on again--and customers might get caught in the crossfire.

InformationWeek has learned that the software maker on Monday filed a lawsuit against Ravin's Rimini Street, Inc. for allegedly swiping Oracle software and intellectual property so it can provide cut-rate, third-party support to Oracle customers.

The outcome of the case could impact businesses' ability to turn to unofficial support channels in order to bypass pricey enterprise software maintenance contracts that can cost millions of dollars.

Oracle said Rimini Street is using ill-gotten materials to provide such services. "This case is about massive theft of Oracle's software and related support materials through an illegal business model," Oracle said in court papers filed Monday in federal court in Nevada.

Oracle and Ravin, who is president and CEO of Rimini Street, have crossed paths before.

Ravin helped run TomorrowNow, which also offered third-party support for Oracle software, until the company was acquired by SAP in 2007. Oracle promptly sued SAP for infringing on its business model and other charges. That case is set to go to trial later this year.

"This illegal business model is not new for Ravin," Oracle said. "He helped create this illegal scheme at his prior company, TomorrowNow," Oracle charged. SAP shuttered TomorrowNow in October 2008, "having concluded that it could not provide support services without infringing on Oracle's intellectual property rights," Oracle said.

In its suit against Rimini Street, Oracle alleges that Ravin is committing the same alleged breaches under a new shingle.

"Central to Rimini Street's business model is the illegal downloading of Oracle's software and support materials in a scheme that is vast in scope, consisting of many thousands of software and support materials," Oracle charged in its 42-page complaint.

Oracle claimed Rimini uses automated bots to scour its Web site and download the materials after obtaining passwords from Oracle customers.

"These intrusions have damaged Oracle's support services by causing the databases which host the software and support materials to freeze," Oracle said. It also accused Rimini Street of possessing illegal copies of Oracle enterprise applications.

On its Web site, Rimini Street advertises support for business software from Oracle's Siebel, PeopleSoft, and JD Edwards lines, as well as for SAP products. It claims it can save customers as much as 50% on support fees.

The company says its customer base includes hundreds of Fortune 500 and mid-market companies, as well as government agencies.

The impact of the case could be widespread.

By one estimate, Rimini Street has saved enterprises more than $200 million on support fees. Whether it was entitled to do so could ultimately be decided by a judge or jury. Oracle is asking the court to enjoin Rimini Street from continuing to provide third party support and is seeking unspecified damages.

Rimini Street has yet to file a formal legal response to Oracle's allegations. In a statement, the company said it would "vigorously respond" to the court action.

"Enterprise software customers, like any in a truly competitive market, deserve the right to have a choice of support options and vendors," said Ravin.

InformationWeek has published a new report on cloud governance, risk, and compliance Download the report now (registration required).

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