Oracle USA, Inc. v. Rimini Street, Inc.

Opinion

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT AUG 16 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS ORACLE USA, INC., a Colorado No. 18-16554 corporation; et al., DC No. CV 10-0106 LRH Plaintiffs-Appellees,

v. MEMORANDUM*

RIMINI STREET, INC., a Nevada corporation,

Defendant-Appellant.

Appeal from the United States District Court for the District of Nevada Larry R. Hicks, District Judge, Presiding

Argued and Submitted July 12, 2019 Portland, Oregon

Before: TASHIMA, GRABER, and OWENS, Circuit Judges.

Defendant-Appellant Rimini Street, Inc. (“Rimini”) appeals the district

court’s order entering a permanent injunction in favor of, and awarding attorney’s

fees to, Plaintiffs-Appellees Oracle USA, Inc., Oracle America, Inc., and Oracle

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. International Corp. (collectively “Oracle”). Rimini contends that the district court

erred in entering the injunction, that the injunction is moot, and that the injunction

is overbroad and impermissibly vague. Rimini also contends that the district

court’s fee award violated this court’s prior mandate and that the district court

abused its discretion in apportioning the award. We have jurisdiction under 28

U.S.C. § 1291, and we affirm except as to paragraphs nine and thirteen of the

injunction, which we instruct the district court to strike, and also except as to the

words “or access” in paragraphs eight and twelve of the injunction, which we also

instruct the district court to strike.

1. The injunction is not moot. Voluntary cessation of the challenged

conduct does not render a case moot unless “it can be said with assurance that there

is no reasonable expectation . . . that the alleged violation will recur and interim

relief or events have completely and irrevocably eradicated the effects of the

alleged violation.” Fikre v. FBI, 904 F.3d 1033, 1037 (9th Cir. 2018) (quoting

County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979)) (internal quotation

marks omitted) (alteration in original). Rimini contends that the injunction is moot

only because Rimini has ceased the challenged conduct, namely, unsanctioned

copying of Oracle’s software. This assertion is insufficient to meet Rimini’s

“heavy burden of persua[ding] the court that the challenged conduct cannot

2 reasonably be expected to start up again.” Id. (quoting Adarand Constructors, Inc.

v. Slater, 528 U.S. 216, 222 (2000)) (internal quotation marks omitted) (alteration

in original).

2. The district court did not abuse its discretion in granting the

injunction. See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).

The district court appropriately weighed the eBay factors, including permissibly

finding that Rimini’s infringing conduct had a “causal connection” to the

irreparable harm suffered by Oracle. Perfect 10, Inc. v. Google, Inc., 653 F.3d 976,

982 (9th Cir. 2011). The court pointed to the fact that Oracle and Rimini were

direct competitors, explained that Rimini was able to gain increasing market share

by offering lower prices for its service than Oracle offered, and that these lower

prices were possible because Rimini’s infringing conduct saved the company time

and money. This conclusion was supported by the record, including Rimini’s own

internal e-mails. Accordingly, the district court did not abuse its discretion in

granting the injunction.

Additionally, we note that, as part of its weighing of the eBay factors, the

district court stated that Rimini had “conscious disregard” for Oracle’s software

copyrights. Rimini argues that this contradicted the jury’s finding that Rimini was

an “innocent” infringer. Assuming, without deciding, that the district court

3 violated the Seventh Amendment’s Reexamination Clause, see Teutscher v.

Woodson, 835 F.3d 936, 944 (9th Cir. 2016) (explaining that trial judges must

“follow the jury’s implicit or explicit factual determinations in deciding the

equitable claims” in order to avoid contravening the Reexamination Clause)

(quoting L.A. Police Protective League v. Gates, 995 F.2d 1469, 1473 (9th Cir.

1993))), any error was harmless. Rimini’s mental state was not necessary to the

district court’s determination of irreparable injury, nor to the broader weighing of

the eBay factors. The district court’s decision would stand precisely the same

without this statement. Nor did Oracle waive the issue of harmlessness, as Rimini

addressed the issue in its opening brief.

3. Rimini also contends that the injunction is overbroad. We agree in

two respects. First, restricting “local hosting” for the J.D. Edwards and Siebel

licences was error. The injunction enjoins “local hosting” as to PeopleSoft, J.D.

Edwards, and Siebel. But only the PeopleSoft license limits the licensee to using

the licensed Software “at its facilities . . . .” (emphasis added), which is the basis

for the local-hosting requirement. The J.D. Edwards and Siebel licenses do not

contain such a limitation. See Oracle USA, Inc. v. Rimini Street, Inc., 879 F.3d

948, 959 (9th Cir. 2018) (“The PeopleSoft license is similar to its J.D. Edwards

and Siebel counterparts, but it contains an additional limitation about ‘[the

4 licensee’s] facilities.’” (alteration in original)), rev’d in other part, 139 S. Ct. 873

(2019). Accordingly, it was error for the district court to enjoin “local hosting” for

the J.D. Edwards and Siebel licences, and we instruct the district court to strike

paragraphs nine and thirteen of the injunction.

Second, the injunction’s prohibition on “access[ing]” source code is

overbroad. “Accessing” a copyrighted work is not an infringing activity under the

Copyright Act. See 17 U.S.C. § 106 (2002). Even if the prohibition on access is

meant to prevent copying, it is unnecessary, as copying is separately prohibited by

the injunction. See Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020, 1049

(9th Cir. 2013) (“[I]njunctive relief should be no more burdensome to the

defendant than necessary to provide complete relief to the plaintiffs before the

court.” (internal citations omitted)). Consequently, we instruct the district court to

strike the words “or access” from paragraphs eight and twelve of the injunction.

In all other respects, the injunction is not overbroad.

4. The injunction is not impermissibly vague. The injunction clearly sets

out what conduct is restricted, namely that Rimini shall not reproduce, prepare

derivative works from, or distribute software except “to support the specific

licensee’s own internal data processing operations.” It is therefore not

impermissibly vague.

5 5. We also affirm the attorneys’ fees award. First, the prior panel’s

mandate in Oracle, 879 F.3d 948, did not require apportionment: the panel

reversed and remanded the fee award for “reconsideration in light of Oracle’s more

limited success at litigation,” id. at 965, and the district court clearly reconsidered

the amount of the award and re-applied the attorneys’ fees factors. Therefore, the

district court did as instructed by this court.

Second, the district court did not abuse its discretion by not apportioning the

fee award. As the prevailing party, Oracle could recover only attorneys’ fees

incurred in litigating its copyright claims or “related claims.” The Traditional Cat

Ass’n, Inc. v. Gilbreath, 340 F.3d 829, 833 (9th Cir. 2003). The district court

permissibly concluded that the claims “‘involve[d] a common core of facts’ [and

were] based on ‘related legal theories,’” McCown v. City of Fontana, 565 F.3d

1097, 1103 (9th Cir. 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 453

(1983)), because the “action was first and foremost a copyright infringement

action.” Accordingly, it was within the district court’s discretion to determine that

apportionment was not required beyond the twenty percent reduction. See Creative

Computing v. Getloaded.com LLC, 386 F.3d 930, 937 (9th Cir. 2004) (explaining

that, even though the plaintiff lost on its Lanham Act claims, “[a]llocation is not

required where there is a ‘common core of facts’ that requires substantially the

6 same expense on prevailing and unsuccessful claims”). Accordingly, the district

court did not abuse its discretion in calculating the award.

• ! •

The judgment of the district court is affirmed, including its injunction and

award of attorneys’ fees, except that paragraphs nine and thirteen of the injunction,

and the words “or access” in paragraphs eight and twelve, are vacated and ordered

stricken. The parties shall bear their own costs on appeal.

AFFIRMED in part, VACATED in part, and REMANDED.