Oracle v. Rimini Street: A Cautionary Tale for Every Oracle Customer - Rimini Street fights back

In a major appellate decision, the Ninth Circuit Court of Appeals issued a ruling on December 16, 2024, that significantly altered the outcome of Oracle’s long-running legal battle against Rimini Street, Inc. over software copyright infringement. The decision vacated several key findings from the lower court and provided fresh insights into copyright law, derivative works, fair use defenses, and false advertising under the Lanham Act.

Case Background

Oracle International Corporation, a global software giant, originally sued Rimini Street, a third-party provider of software support services, claiming copyright infringement and false advertising under the Lanham Act. The case centered on whether Rimini’s revised processes—developed after previous court rulings against it—still violated Oracle’s copyright or engaged in misleading marketing practices.

The district court had ruled largely in Oracle’s favor, issuing a permanent injunction against Rimini. Rimini appealed, arguing that the lower court misapplied copyright law and that its business model complied with licensing agreements.

Key Issues and the Ninth Circuit’s Ruling

1. Derivative Works – A Narrower Definition

One of the most consequential parts of the Ninth Circuit’s ruling was its decision to vacate the lower court’s finding that Rimini created infringing derivative works based on Oracle software.

• The district court had applied an “interoperability test”, arguing that software updates and support tools must be derivative works if they can only interact with Oracle’s proprietary software.
• The Ninth Circuit rejected this approach, stating that mere interoperability is not enough—a derivative work must actually incorporate Oracle’s copyrighted material in a meaningful way.
• This clarification provides greater legal protections for third-party service providers who work with proprietary software.

2. Fair Use Defense Under Section 117(a) Reinstated

The court also revived Rimini’s affirmative defense under 17 U.S.C. § 117(a), which allows software owners to make copies for essential use.

• The lower court had categorically ruled that Oracle’s software licenses did not constitute ownership, thereby blocking Rimini from claiming protection under fair use provisions.
• The Ninth Circuit disagreed, emphasizing that ownership is a fact-based determination rather than a blanket prohibition.
• This ruling reinforces the principle that licensing structures alone do not necessarily preclude fair use claims in software-related disputes.

3. Lanham Act – Most False Advertising Claims Dismissed

Oracle had also accused Rimini of making false advertising statements about its software security capabilities, in violation of the Lanham Act.

• The Ninth Circuit overturned most of the lower court’s findings, ruling that many of Rimini’s claims were non-actionable puffery—general marketing language that cannot form the basis for a false advertising claim.
• However, one statement regarding “holistic security” was upheld as false because Rimini did not actually offer multi-layered security solutions.

4. Scope of the Injunction Significantly Reduced

Because multiple findings of copyright infringement were vacated, the Ninth Circuit also struck down much of the permanent injunction issued against Rimini.

• The court found that some of the software deletions and prohibitions ordered by the district court were overbroad and not justified.
• The injunction will now be reconsidered on remand, taking into account the narrowed definition of derivative works and fair use defenses.

Implications for the Software Industry

This ruling has major implications for companies involved in third-party software support, software licensing, and technology services:

• Stronger Protections for Third-Party Support Providers – The decision clarifies that offering services for proprietary software does not automatically mean copyright infringement.
• Limits on Copyright Holders’ Control – Companies like Oracle may need to rethink their licensing and enforcement strategies, as courts continue to push back against expansive copyright claims.
• Fair Use in Software Licensing – The ruling reinforces that software licensees may still retain rights under fair use laws, even if they are bound by restrictive agreements.

Final Thoughts

This appellate ruling in Oracle v. Rimini Street represents a significant shift in the balance of power between software giants and third-party service providers. While Oracle retains some legal victories, the Ninth Circuit has made it harder for large software companies to use copyright law as a weapon against competition.

As the case moves forward on remand, businesses in the software support industry should take note: interoperability is not infringement, licensing is not outright ownership, and puffery is not false advertising.

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