Oracle USA, Inc. v. Rimini Street, Inc. ( 2019 )

NOT FOR PUBLICATION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
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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
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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
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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.
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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
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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.
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