Oracle can pursue major copyright violation claims against HPE

A federal judge on Monday cleared the way for Oracle to pursue major copyright infringement claims in an upcoming trial against Hewlett Packard Enterprise on an accusation that it illegally facilitated access to proprietary software.

U.S. District Judge Jon S. Tigar found there is enough evidence indicating that HPE partnered with service support company Terix to provide customers unauthorized updates of Oracle's Solaris operating system. He concluded that the plan was an "important piece of HPE's business and was encouraged by management."

HPE and Oracle did not respond to requests for comment.

Oracle emphasized in previous statements that rulings in the case reaffirm broad protections on copyrighted software.

Oracle accused HPE in 2016 of joining with Terix to offer Solaris patches to customers who did not have contracts with Oracle that would make them available. Tigar dismissed most of the claims, siding with HPE that there was not enough proof it installed the updates for customers.

But the 9th U.S. Circuit Court of Appeals revived the lawsuit. It pointed to evidence of HPE's knowledge of Terix downloading, copying and installing for customers updates to Solaris without compensating Oracle. While some claims are time barred, it ruled that Oracle can sue for copyright violations after May 2012.

Tigar detailed in his order a plan he said Terix developed to enter into contracts with Oracle that allowed the company to download Solaris updates and use stolen intellectual property to support hundreds of customers.

The judge found that HPE could have encouraged or been "willfully blind" to Terix's copyright infringement. He indicated skepticism that it did not know that Terix was providing software patches to customers without Oracle contracts.

"Oracle has pointed to several joint HPE/Terix customers -- including Comcast and Sybase -- who HPE knew did not pay for Oracle support, but who contracted with HPE and Terix with the understanding that they would receive Oracle patches," Tigar wrote.

Terix has already agreed to pay $57.7 million to settle a separate case from Oracle. Its chief executive was convicted of his role in the scheme.

Tigar also rejected claims that HPE had an informal understanding with Oracle that customers could receive Solaris updates and that it would pay Oracle at a later time. He concluded the terms of the contract were clear.

"An implied term that would allow HPE to provide Solaris patches for servers not under a support contract would be inconsistent with these express terms," he wrote.

Damages in the lawsuit will not be limited to only the customers Oracle can prove were delivered updates by HPE. Tigar ruled that Oracle is not required to show that roughly 11,500 illegally downloaded copies of Solaris updates were actually delivered to customers.

Defense attorneys at Gibson, Dunn & Crutcher and plaintiffs' attorneys at Latham & Watkins did not respond to requests for comment.

The trial is scheduled to start Nov. 30.Oracle America, Inc. v. Hewlett Packard Enterprise Co., 16-cv-01393 (N.D. Cal., filed March 22, 2016); Oracle America, Inc. v. Hewlett Packard Enterprise Co., 2020 DJDAR 9075 (9th Cir. Aug. 20, 2020).