Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 1 of 7
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEVADA
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`Case No. 2:14-cv-1699-LRH-(CWH)
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`ORDER
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`v.
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`* * *
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`RIMINI STREET, INC. a Nevada Corporation,
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` Plaintiff,
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`ORACLE INTERNATIONAL
`CORPORATION, a California Corporation,
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` Defendant.
`_____________________________________
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`ORACLE AMERICA, INC., a Delaware
`Corporation; and ORACLE
`INTERNATIONAL CORPORATION,
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` Plaintiff,
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` v.
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`RIMINI STREET, INC.; and SETH RAVIN, an
`individual,
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` Counter-defendants.
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`Before the court is counter-claimants Oracle International Corporation and Oracle
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`America, Inc.’s (collectively “Oracle”) motion to strike plaintiff/counter-defendants
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`Rimini Street, Inc. (“Rimini Street”) and Seth Ravin’s (“Ravin”) affirmative defense of copyright
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`misuse. ECF No. 439. Counter-defendants filed an opposition (ECF No. 461) to which Oracle
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`replied (ECF No. 462).
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`Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 2 of 7
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`I.
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`Facts and Procedural Background
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`Defendant/counter-claimant Oracle develops, manufacturers, and licenses computer
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`software. Rather than sell its software to consumers outright, Oracle licenses its software to
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`customers through software licensing agreements which govern the customers’ rights to use the
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`software. Along with its software licensing business, Oracle also provides software maintenance
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`and support services to its software licensees through separate software support service contracts.
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`Oracle holds a number of federal copyrights for its various software applications, including the
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`particular software applications at issue in this action.
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`Plaintiff Rimini Street provides third-party maintenance and support services to
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`consumers who license software applications from other software companies and competes
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`directly with Oracle to provide these after-license services. Rimini Street does not develop or
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`manufacture its own competing software applications and holds no federal copyrights. Rather,
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`Rimini Street contracts with software licensees to provide software maintenance and support
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`services for certain software applications including the particular Oracle copyrighted software
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`application at issue in this action. Counter-defendant Seth Ravin (“Ravin”) is the owner and
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`CEO of Rimini Street.
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`This is the second action between the parties. In the first action, Oracle USA., Inc. v.
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`Rimini Street, Inc., case no. 2:10-cv-0106-LRH-(VCF) (“Oracle I”), Oracle brought several
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`claims against Rimini Street and Ravin for copyright infringement and other business-related
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`torts based on (1) the process Rimini Street used to provide software maintenance and support
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`services to customers who had licensed Oracle software, and (2) the manner in which
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`Rimini Street accessed and preserved copies of Oracle’s copyrighted software source code. See
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`Oracle I, case no. 2:10-cv-0106-LRH-(VCF), ECF No. 1. While litigation in Oracle I was
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`proceeding, Rimini Street allegedly changed the manner by which it accessed and preserved its
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`customer’s licensed software and the process by which it provided software maintenance and
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`support services to its clients in response to the court’s summary judgment orders (Oracle I,
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`case no. 2:10-cv-0106-LRH-VCF, ECF Nos. 474, 476). Subsequently, on October 15, 2014,
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`Rimini Street initiated the present action against Oracle seeking a declaration from the court that
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`Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 3 of 7
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`its new software maintenance and support processes do not infringe Oracle’s software
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`copyrights. See ECF No. 1.
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`After Rimini Street initiated the present action Oracle filed counterclaims against
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`Rimini Street and Ravin for copyright infringement and other business related torts. ECF No. 21.
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`Oracle then twice amended its counterclaims to add new allegations and claims against counter-
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`defendants. ECF Nos. 173, 306.
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`On January 17, 2017, Oracle sent Rimini Street a letter providing 60 days’ notice of
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`Oracle’s intent to revoke Rimini Street’s access to Oracle’s various support websites.1 After the
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`sixty-day period ran, Oracle allegedly revoked and terminated all of Rimini Street’s access to
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`Oracle’s support websites, thereby allegedly preventing Rimini Street from carrying out certain
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`support services for Rimini Street’s clients. Also on January 17, 2017, Oracle filed its third and
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`final amended counterclaims against Rimini Street and Ravin. ECF No. 397. In response,
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`Rimini Street and Ravin filed an answer to Oracle’s third amended counterclaims. ECF No. 410.
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`As part of their answer, counter-defendants raised an affirmative defense alleging that Oracle’s
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`revocation of Rimini Street’s authorization to access Oracle’s support websites constitutes
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`copyright misuse. Id. Thereafter, Oracle filed the present motion to strike Rimini Street and
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`Ravin’s copyright misuse affirmative defense. ECF No. 439.
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`II.
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`Legal Standard
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`A motion to strike an affirmative defense is brought pursuant to Federal Rule of Civil
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`Procedure 12(f), under which a court may strike “from any pleading any insufficient defense or
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`any redundant, immaterial, impertinent or scandalous material.” FED. R. CIV. P. 12(f). A “motion
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`to strike is proper when a defense is insufficient as a matter of law.” Oracle Am., Inc. v. Micron
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`Tech., Inc., 817 F. Supp. 2d 1128, 1131-31 (N.D. Cal. 2011).
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`Affirmative defenses are governed by the same pleading standard as complaints. Wyshak
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`v. City Nat’l Bank, 607 F.2d 824, 827 (9th Cir. 1979) (“The key to determining the sufficiency of
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`pleading an affirmative defense is whether it gives plaintiff fair notice of the defense.”). To
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`1 Oracle hosts several different websites on which Oracle offers various software updates, patches, and other
`software support materials and documentation for licensees of Oracle’s software. These support websites are made
`available to licensees through client logins which allow the licensees to access the websites and download particular
`fixes and support materials for the licensee’s particular licensed Oracle software application.
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`Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 4 of 7
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`sufficiently allege an affirmative defense under Rule 8(a)(2), viewed within the context of a
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`Rule 12(f) motion to strike, the affirmative defense must “contain sufficient factual matter,
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`accepted as true, to ‘state a [defense] that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.
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`662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A defense has facial plausibility when the
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`pleaded factual content allows the court to draw the reasonable inference, based on the court’s
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`judicial experience and common sense, that the defense has merit. See Id. at 678-679. Further, in
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`reviewing a motion to strike an affirmative defense, the court accepts the factual allegations in
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`the affirmative defense as true. Id. However, bare assertions in a defense amounting “to nothing
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`more than a formulaic recitation of the elements of a [defense] are not entitled to an assumption
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`of truth.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 556 U.S. at
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`698) (internal quotation marks omitted).
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`III. Discussion
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`“Copyright misuse is a judicially created affirmative defense to copyright infringement.”
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`Apple Inc. v. Psystar Corp., 658 F.3d 1150, 1157 (9th Cir. 2011). The equitable defense of
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`copyright misuse “forbids a copyright holder from securing an exclusive right or limited
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`monopoly not granted by the Copyright Office” by preventing “copyright holders from
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`leveraging their limited monopoly to allow them control of areas outside the monopoly.” A&M
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`Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1026 (9th Cir. 2001) (internal quotations omitted).
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`The defense precludes a copyright owner from enforcing the copyright during periods of misuse.
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`See Practice Mgmt. Info. Corp. v. Am. Med. Ass’n, 121 F.3d 516, 520 (9th Cir. 1997).
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`In their answer to Oracle’s third amended counterclaims, Rimini Street and Ravin have
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`raised an affirmative defense that Oracle has engaged in copyright misuse by revoking
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`Rimini Street’s authorization to access Oracle’s support websites. See ECF No. 410. Specifically,
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`counter-defendants allege that Oracle is attempting to unlawfully leverage a monopoly in the
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`support services market by revoking Rimini Street’s authorization to access Oracle’s support
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`service websites on behalf of its clients. Counter-defendants contend that these support websites
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`are the only way for Rimini Street’s clients, who have licensed Oracle’s copyrighted software, to
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`access and use certain copyrighted documents and support materials that are hosted on those
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`Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 5 of 7
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`websites. Further, counter-defendants allege that the technical design of Oracle’s support
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`websites makes it near impossible for the individual licensees to identify all of the documents
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`and materials that the licensees are entitled to under the software licenses, thereby forcing the
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`licensees to employ Oracle’s uncopyrightable support services. Therefore, counter-defendants
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`argue that Oracle is misusing its software copyright by effectively requiring its customers to
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`either purchase Oracle’s non-copyrightable software maintenance and support services or forego
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`the support materials for which the licensees are entitled.
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`The court has reviewed the documents and pleadings on file in this matter and finds that
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`Oracle’s conduct in revoking Rimini Street’s access to its support websites does not constitute
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`copyright misuse as a matter of law. First, the court notes that Rimini Street’s allegations center
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`on Oracle’s use of its property rights as owner of its websites to restrict Rimini Street’s access to
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`those websites rather than any of the exclusive rights granted to Oracle under the Copyright Act
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`like licensing the work or determining how the work can be reproduced. Conduct, which does
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`not rely on the party’s rights under the Copyright Act, cannot constitute copyright misuse. See
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`Napster, Inc., 239 F.3d at 1027 (stating that to constitute copyright misuse, the challenged
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`conduct must attempt to extend a copyright beyond the Copyright Act’s limitations). Nowhere in
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`their affirmative defense do counter-defendants allege that Oracle relied on any of its copyrights
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`in revoking Rimini Street’s access to Oracle’s support websites. A party’s failure to allege or
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`point to any copyright employed “to prohibit directly the independent development or use of a
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`competing product” precludes a finding of copyright misuse. Microsoft Corp. v. Computer
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`Support Servs. Of Carolina, Inc., 123 F. Supp. 2d 945, 956 (W.D. N.C. 2000).
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`Second, counter-defendants’ argument that Oracle’s exercise of its property rights as
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`owner of a website constitutes copyright misuse because Oracle’s copyrighted support materials
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`are made available only on those support websites is without legal support and merit. Counter-
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`defendants’ argument would lead to the nonsensical legal result that a website owner could
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`exclude another party from accessing a website that does not contain any copyrighted materials,
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`but then could not exclude that party from accessing the website if it contained any copyrighted
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`materials. Counter-defendants’ argument is not supported by any logical or legal authority and
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`Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 6 of 7
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`would result in an impermissible and unsupported expansion of the doctrine of copyright misuse
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`to legal realms outside of copyrights.
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`Finally, the court finds that Oracle’s conduct does not constitute copyright misuse as a
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`matter of law because Oracle’s revocation of Rimini Street’s authorization to access Oracle’s
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`support websites does not preclude the software licensees from accessing those same websites
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`and obtaining the copyrighted documents and support materials that the licensee is entitled to
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`under the software licenses. In fact, despite Oracle’s conduct, the software licensees are still able
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`to access and download all support materials and documentation that the licensee is entitled to
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`without having to purchase Oracle’s software maintenance and support services. Nor does
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`Oracle’s conduct in revoking Rimini Street’s authorization to access a website elicit any promise
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`from Oracle’s software licensees that the licensee will only use Oracle’s software maintenance
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`and support services and not use such services from any competing company. The fact that there
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`may not be any manner by which Rimini Street can perform some of its contracted services
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`because of Oracle’s conduct does not mean that Oracle engaged in copyright misuse. Courts
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`have consistently and summarily rejected the affirmative defense of copyright misuse where the
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`copyright owner did not prohibit its licensees from either using or independently developing a
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`competing product. See Microsoft Corp., 123 F. Supp. 2d at 955-56. So long as Oracle’s alleged
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`conduct does not require the customer to promise not to use a competitor’s products or prohibit
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`development of competing products, there is no copyright misuse even if the conduct gives the
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`copyright holder an advantage over a competitor on non-copyrighted products or services. See
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`e.g., Apple, Inc. v. Psystar Corp., 673 F. Supp. 2d 931, 939 (9th Cir. 2009) (finding that a license
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`agreement that prohibited customers from using plaintiff’s product on a competitor’s product,
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`but did not prohibit customers from using a competitor’s product, was not copyright misuse).
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`Therefore, the court finds that counter-defendants’ affirmative defense of copyright infringement
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`fails as a matter of law and the court shall grant Oracle’s motion and strike the defense
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`accordingly.
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`///
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`///
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`Case 2:14-cv-01699-LRH-CWH Document 634 Filed 11/17/17 Page 7 of 7
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`IT IS THEREFORE ORDERED counter-claimants’ motion to strike (ECF No. 439) is
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`GRANTED in accordance with this order. Counter-defendants’ first affirmative defense for
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`copyright misuse is DISMISSED.
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`IT IS SO ORDERED.
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`DATED this 17th day of November, 2017.
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`__________________________________
`LARRY R. HICKS
`UNITED STATES DISTRICT JUDGE
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