FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`ORACLE USA, INC., a Colorado
`corporation; ORACLE AMERICA, INC.,
`a Delaware corporation; ORACLE
`INTERNATIONAL CORPORATION, a
`California corporation,
`Plaintiffs-Appellees,
`
` Nos. 16-16832
`
`16-16905
`
`
`D.C. No.
`2:10-cv-00106-
`LRH-VCF
`
`
`OPINION
`
`
`
`v.
`
`
`RIMINI STREET, INC., a Nevada
`corporation; SETH RAVIN, an
`individual,
`
`Defendants-Appellants.
`
`
`
`
`Appeals from the United States District Court
`for the District of Nevada
`Larry R. Hicks, District Judge, Presiding
`
`Argued and Submitted July 13, 2017
`San Francisco, California
`
`Filed January 8, 2018
`
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`ORACLE USA, INC., a Colorado
`corporation; ORACLE AMERICA, INC.,
`a Delaware corporation; ORACLE
`INTERNATIONAL CORPORATION, a
`California corporation,
`Plaintiffs-Appellees,
`
` Nos. 16-16832
`
`16-16905
`
`
`D.C. No.
`2:10-cv-00106-
`LRH-VCF
`
`
`OPINION
`
`
`
`v.
`
`
`RIMINI STREET, INC., a Nevada
`corporation; SETH RAVIN, an
`individual,
`
`Defendants-Appellants.
`
`
`
`
`Appeals from the United States District Court
`for the District of Nevada
`Larry R. Hicks, District Judge, Presiding
`
`Argued and Submitted July 13, 2017
`San Francisco, California
`
`Filed January 8, 2018
`
`
`
`
`ORACLE USA V. RIMINI STREET
`
`2
`
`Before: Susan P. Graber and Michelle T. Friedland, Circuit
`Judges, and Jeremy D. Fogel,* District Judge.
`
`Opinion by Judge Fogel
`
`
`SUMMARY**
`
`
`
`
`Copyright
`
`The 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.
`
`Oracle 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.
`
`The panel affirmed the district court’s partial summary
`judgment and partial judgment after trial on Oracle’s claims
`
`* The Honorable Jeremy D. Fogel, United States District Judge for
`the Northern District of California, sitting by designation.
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`3
`
`ORACLE USA V. RIMINI STREET
`
`
`
`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.
`
`The 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 prohibited by the applicable terms of use, when the
`taking 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 direct contravention of Oracle’s terms of use.
`Because 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.
`
`The 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.
`
`The 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
`
`
`
`ORACLE USA V. RIMINI STREET
`
`4
`
`the CDAFA claims, without considering separately the
`propriety of issuing an injunction as to the copyright claims
`alone.
`
`The 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.
`
`The panel reduced the district court’s award of taxable
`costs and affirmed its award of non-taxable costs.
`
`
`
`COUNSEL
`
`
`Mark 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
`Defendants-Appellants.
`
`Paul 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.; for Plaintiffs-Appellees.
`
`Jamie Williams and Aileen Nguyen, San Francisco,
`California, as and for Amicus Curiae Electronic Frontier
`Foundation.
`
`
`
`
`
`
`
`
`ORACLE USA V. RIMINI STREET
`
`5
`
`OPINION
`
`FOGEL, District Judge:
`
`Oracle 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.
`
`At all 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
`customers.1 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 downloading tools in direct contravention of
`the terms of use of the website.
`
`Oracle 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
`
`1 All of Rimini’s customers pertinent to this dispute were licensees
`of Oracle’s software, but not all licensees of Oracle’s software are
`Rimini’s customers. To avoid confusion, we will use the word
`“customers” to refer to the subset of Oracle’s licensees who did contract
`or might contract with Rimini for the maintenance of Oracle’s software.
`
`
`
`ORACLE USA V. RIMINI STREET
`
`6
`
`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.
`
`The 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
`
`
`
`ORACLE USA V. RIMINI STREET
`
`
`
`also consider the appropriateness of the remedies awarded
`by the district court.
`
`7
`
`As 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 UCL.
`
` Copyright Infringement Claims
`
` The Software in Suit2
`
`Four 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 explained:
`
`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
`
`2 The district court specifically distinguished between Oracle’s
`copyright
`in software and Oracle’s copyright
`in
`the software
`documentation. Rimini does not appeal the jury’s determination that
`Rimini infringed the documentation copyright.
`
`
`
`8
`
`
`ORACLE USA V. RIMINI STREET
`
`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.
`
`Because 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.
`
` J.D. Edwards and Siebel
`
`Oracle’s 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 marks omitted).
`
`
`
`
`
`
`ORACLE USA V. RIMINI STREET
`
`9
`
`Rimini 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 persuasive.
`
`1. Express License Defense
`
`As will 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
`expressly licensed.
`
`The Supreme Court has explained the express license
`defense as follows:
`
`“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 such use.”
`
`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
`
`
`
`ORACLE USA V. RIMINI STREET
`
`10
`
`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).
`
`As 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.
`
`a) Software Licenses
`
`The pertinent provisions of the J.D. Edwards and Siebel
`licenses are excerpted below:
`
`Software
`J.D.
`Edwards
`
`Siebel
`
`License Language
`“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
`the Users.”
`“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.”
`
`
`
`Like the language of the licenses themselves, the district
`court’s constructions of the two licenses when instructing the
`jury were similar.
`
`The 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
`
`
`
`ORACLE USA V. RIMINI STREET
`
`
`
`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.”
`
`11
`
`b) Accused Acts
`
`(1) Background
`
`Work 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 changing circumstances.
`
`However, 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.
`
`the creation of
`requires
`testing process
`This
`A
`“development
`“development
`environments.”
`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. As the district court explained:
`
`In order to develop and test software updates
`for Enterprise Software, support service
`providers
`. . .
`create
`development
`
`
`
`12
`
`
`ORACLE USA V. RIMINI STREET
`
`software. A
`the
`of
`environments
`is a software
`development environment
`environment that contains a copy of the
`software program which is then modified to
`develop and test software updates. Given the
`critical nature of Enterprise Software
`programs, updates to the software must be
`fully tested and verified in a development
`environment before they are provided to a
`customer.
`
`Oracle USA, Inc. v. Rimini St., Inc., 6 F. Supp. 3d 1086, 1092
`n.4 (D. Nev. 2014) (“Oracle I”).
`
`In other words, the very work of maintaining customized
`software requires copying the software, which without a
`license to do so is a violation of the exclusive right of the
`copyright owner. Here, it is undisputed that the licenses
`generally permit Oracle’s licensees to maintain the software
`and make development environments for themselves.
`However, some licensees of the software, lacking either the
`capability or the interest, opt to outsource the work of
`maintenance to others, such as Rimini or even Oracle itself.
`
`(2) “Direct Use” and “Cross Use”
`
`Oracle alleges that Rimini engaged in two distinct types
`of copyright infringement with respect to J.D. Edwards and
`Siebel. The first has to do with the way it created
`development environments, under color of a license held by
`these particular, identifiable customers of Rimini, for that
`specific customer. We refer to this as “direct use.”
`
`
`
`
`
`
`ORACLE USA V. RIMINI STREET
`
`13
`
`The second is “cross use.”3 “Cross use,” generally
`speaking, is the creation of development environments,
`under color of a license of one customer, to support other
`customers. There are numerous forms of “cross use.” In its
`narrowest form, “cross use” is the making of development
`environments, under color of a license held by one
`identifiable customer of Rimini, for another identifiable
`customer of Rimini that also holds a license. It also may
`include the creation of development environments under a
`given license for other customers of Rimini that may
`themselves hold licenses or even for licensees who have yet
`to become customers of Rimini. Rimini claims that “cross
`use” is not infringement, arguing that it may create
`environments without restriction because any organization
`that might hire Rimini to service its software would itself
`have a license to create development environments. Rimini’s
`counsel explained at oral argument that “cross use” enabled
`it to reduce expense by reusing work it had done for one
`customer in providing service to others.
`
`c) Analysis
`
`Rimini argues on appeal that the jury instructions were
`erroneous because they suggested that certain direct uses and
`cross uses were prohibited while Rimini believes they were
`permitted.
`
`With respect to “direct use,” we may dispose quickly of
`Rimini’s claim that the district court construed “direct use”
`out of the licenses. Rimini successfully persuaded the district
`
`3 Rimini offered this description of its “cross use” in its closing
`statement to the jury: “If we have multiple clients with the exact same
`release, the same rights, we would come up with one fix and then apply
`it to other customers that had the exact same rights. That’s the cross-use,
`the reusing of updates that you’ve heard about in this case.”
`
`
`
`ORACLE USA V. RIMINI STREET
`
`14
`
`court to include the language, “to support the customer’s
`use,” in its jury instruction about the J.D. Edwards license.
`The instruction concerning Siebel told the jury specifically
`that Rimini could hold copies of the Siebel software
`application “solely for customer’s archive or emergency
`back-up purposes or disaster recovery and related testing.”
`Rimini did not object to that instruction at trial, and, contrary
`to Rimini’s arguments on appeal, those instructions treated
`these forms of direct use as permitted.
`
`Rimini also argues, however, that the instructions should
`have approved expressly of other forms of direct use. The
`district court had no reason or need to instruct the jury that
`the licenses permitted other types of direct use, because, as
`the district court’s order shows, Rimini had represented that
`the only forms of direct use it engaged in were those allowed
`by the instruction:
`
`Rimini has proffered evidence that the
`development environments associated with
`[specific Siebel
`licensee]
`are
`used
`exclusively
`for archival and back-up
`purposes, and related testing, as directly
`contemplated by [the license].
`
`Oracle I, 6 F. Supp. 3d at 1105 n.20; see also id. at 1103
`(similar findings concerning J.D. Edwards). Had Rimini
`wanted a broader construction, Rimini should have said so
`in district court. Having failed to do that, Rimini cannot
`complain that the jury found that Rimini’s direct use with
`respect to J.D. Edwards and Siebel exceeded the scope of the
`licenses.
`
`With respect to “cross use,” Rimini’s assertion—made
`for the first time in its reply brief to us—that “cross use” is
`a contractual rather than a copyright issue is not properly
`
`
`
`15
`
`ORACLE USA V. RIMINI STREET
`
`
`
`before us. The principal case on which Rimini relies, MDY
`Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d
`928 (9th Cir. 2011), was not cited in Rimini’s opening brief,
`and “on appeal, arguments not raised by a party in its
`opening brief are deemed waived,” Smith v. Marsh, 194 F.3d
`1045, 1052 (9th Cir. 1999).4
`
`As to the substance of its position, Rimini argues that,
`contrary to the jury instructions, the licenses in fact permit
`“cross use.” It observes that: 1) each of Rimini’s customers
`had its own license; 2) each license permits copies to be
`made for archival and support purposes; 3) the licenses
`authorize the customers to outsource the archival and
`support work to third parties; and 4) such archival and
`support work
`includes
`the creation of development
`environments. Rimini dismisses evidence showing that it
`created development environments for future customers
`using the license of an existing customer on the basis that
`future customers presumably would have licenses that would
`permit
`them
`to hire Rimini
`to create development
`environments.
`
`Oracle properly responds that each of the licenses at
`issue here “pointedly limits copying and use to supporting
`the ‘Licensee.’” The licenses do not authorize Rimini to
`“develop products Rimini could sell for Rimini’s financial
`gain.” Any work that Rimini performs under color of a
`license held by a customer for other existing customers
`cannot be considered work in support of that particular
`
`4 Even if we were to consider the applicability of MDY Industries,
`that case teaches specifically the distinction between “conditions,” “the
`breach of which constitute copyright infringement,” and “covenants,”
`“the breach of which is actionable only under contract law.” 629 F.3d at
`939. Rimini has offered no analysis as to which terms of the licenses at
`issue are “conditions” and which are “covenants.”
`
`
`
`ORACLE USA V. RIMINI STREET
`
`16
`
`customer. The same logic applies to work Rimini performs
`for unknown, future customers. The licensees may hire a
`third party such as Rimini to maintain their software for
`them, but nothing in the licenses permits them to grant a non-
`party to the license a general right to copy proprietary
`software.
`
`2. Copyright Misuse
`
`We turn next to the question of copyright misuse, which
`Rimini asserts as a defense. The copyright misuse doctrine
`prevents holders of copyrights “from leveraging their limited
`monopoly to allow them control of areas outside the
`monopoly.” Apple Inc. v. Psystar Corp., 658 F.3d 1150,
`1157 (9th Cir. 2011). (quoting A&M Records v. Napster,
`Inc., 239 F.3d 1004, 1026 (9th Cir. 2001)) (internal quotation
`marks omitted). To that end, while it “does prevent copyright
`holders from using the conditions to stifle competition,”
`“[t]he copyright misuse doctrine does not prohibit using
`conditions to control use of copyrighted material.” Id. at
`1159. Accordingly, the doctrine is to be “applied . . .
`sparingly”; specifically, it operates when copyright holders
`attempt to impose license agreements that would “prevent[]
`. . . licensee[s] from using any other competing product.” Id.
`at 1157 (emphasis added).
`
`Rimini claims that holding it liable for copyright
`infringement would condone misuse of Oracle’s copyright.
`In Rimini’s view, the district court’s pretrial construction of
`the licensing terms, as embodied in the jury instructions,
`“would foreclose competition in the aftermarket for third-
`party maintenance” because it would limit copies made by
`third parties to those made only for archival and emergency
`backup purposes and because the software could not be
`serviced simply by making exact copies. Oracle counters
`that the licenses “plainly do not preclude third parties from
`
`
`
`ORACLE USA V. RIMINI STREET
`
`
`
`developing competing software or providing competing
`support services,” but instead “require third parties to do so
`in ways that do not disregard Oracle’s exclusive rights under
`copyright law.”
`
`17
`
`We agree with Oracle. The district court did not construe
`the licenses to permit only archival and emergency backup
`purposes. For example, the jury instructions as to J.D.
`Edwards stated specifically:
`
`If you find that the copies of the J.D. Edwards
`software application . . . housed on Rimini
`Street’s servers were used solely for the
`customer’s archival needs and to support the
`customer’s use, then that use is authorized by
`the J.D. Edwards software license agreement
`. . . .
`
`The district court gave similar instructions as to Siebel.
`(“[Y]ou are informed that the court has ruled as a matter of
`law that the Siebel software license agreements authorized
`. . . Rimini Street to make a reasonable number of copies . . .
`solely for the customer’s archive or emergency back-up
`purposes or disaster recovery and related
`testing.”
`(emphasis added)). These constructions would not preclude
`Rimini from creating development environments for a
`licensee for various purposes after that licensee has become
`a customer of Rimini.
`
`The only remaining question is whether it would be
`copyright misuse
`to
`forbid Rimini
`from creating
`development environments for licensees before they have
`become customers or, in other words, whether it would
`contravene the policy of the Copyright Act to allow Oracle,
`as a copyright holder, to have a head start in making copies.
`The Supreme Court has held that “the right of first
`
`
`
`ORACLE USA V. RIMINI STREET
`
`18
`
`publication” is “an important marketable subsidiary right.”
`Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S.
`539, 549 (1985). Just as a copyright holder has the “right of
`first publication,” it also must enjoy the right of “first copy.”
`Giving a head start to Oracle in creating development
`environments is entirely consistent with the Supreme
`Court’s teaching in Harper.
`
` PeopleSoft
`
`The district court granted summary judgment on
`Oracle’s copyright claim with respect to PeopleSoft. “This
`Court reviews a district court’s grant of summary judgment
`de novo. The Court must ‘determine whether, viewing the
`evidence in the light most favorable to the nonmoving party,
`there are any genuine issues of material fact and whether the
`district court correctly applied the relevant substantive
`law.’” Mitchell v. Washington, 818 F.3d 436, 441–42 (9th
`Cir. 2016) (quoting Lopez v. Smith, 203 F.3d 1122, 1131 (9th
`Cir. 2000) (en banc)).
`
`Rimini again asserts an express license defense and
`contends that it would be copyright misuse to hold it liable
`for infringement. Again, its arguments are without merit.
`
`1. Express License Defense
`
`The PeopleSoft license is similar to its J.D. Edwards and
`Siebel counterparts, but it contains an additional limitation
`about “[the licensee’s] facilities”:
`
`
`
`
`
`
`
`
`
`
`Software
`PeopleSoft5
`
`ORACLE USA V. RIMINI STREET
`
`19
`
`License Language
`“Licensee may . . . make a reasonable
`number of copies of the Software, solely
`for: (i) use in accordance with the terms
`set forth herein . . . ; (ii) archive or
`emergency back-up purposes; and/or
`(iii) disaster recovery testing purposes[.]”
`“PeopleSoft grants Licensee a . . . license
`to use the licensed Software, solely for
`Licensee’s
`internal data processing
`operations at its facilities[.]”
`
`
`
`Based on this limitation, the district court construed the
`PeopleSoft license more restrictively than the J.D. Edwards
`and Siebel licenses. Specifically, it stated that “[the
`PeopleSoft license] expressly limits copying the licensed
`software to only the [licensee’s] facilities.” Oracle I, 6 F.
`Supp. at 1097 (emphasis omitted).
`
`Because of the difference in the construction of the
`pertinent licenses, the nature of Oracle’s claim concerning
`PeopleSoft is somewhat different in character from those
`concerning J.D. Edwards and Siebel. Specifically, the
`accused act concerning PeopleSoft is the creation of
`development environments, whether for “direct use” or
`“cross use,” on Rimini’s own computers, as opposed to the
`licensees’ computers. Rimini describes this practice as “local
`
`
`5 Two different PeopleSoft licenses are at issue here, one belonging
`to the City of Flint and the other to the Pittsburgh Public Schools. The
`district court concluded that the two licenses have “similar” language.
`Oracle I, 6 F. Supp. 3d at 1100. On appeal, the parties make no
`distinction between the two licenses; the language discussed here is
`drawn from the license held by the City of Flint.
`
`
`
`ORACLE USA V. RIMINI STREET
`
`20
`
`hosting,” a term that we adopt in this opinion. Rimini asserts
`that it does this to avoid transmission delays.
`
`In the words of the district court, “it is undisputed that
`Rimini made copies of the licensed software at its own
`facilities and outside the control of the [customers].” Id. at
`1101 (emphasis added). The district court concluded that the
`PeopleSoft licenses of Rimini’s customers “do[] not
`authorize Rimini’s off-site copies of the licensed software,”
`and therefore granted summary judgment to Oracle on the
`copyright infringement claims as to PeopleSoft. Id. at 1097.
`
`licensee’s]
`that “[a
`On appeal, Rimini contends
`facilities” can span Rimini’s own servers. In its words:
`
`like Oracle’s
`companies
`Sophisticated
`customers (and Rimini’s clients) do not keep
`all their servers on the actual premises of their
`principal place of business . . . . They may
`own some, lease others, and contract with
`third parties for still more capacity. All are
`encompassed within the plain meaning of
`“facilities.”
`
`We agree with Oracle that “facilities under the control of
`a third party” could not qualify as “the licensee’s facilities.”
`It was not only sensible but also necessary for the district
`court to read a requirement of “control” into the definition of
`“[a licensee’s] facilities.” The record supports the district
`court’s conclusion that the Rimini servers where the copying
`took place were “outside the cont
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