Oracle is continuing to crack down on companies it claims are providing support services for its products in an illegal fashion.
Last week, Oracle sued IT services providers Terix and Maintech, alleging they have “engaged in a deliberate scheme to misappropriate and distribute copyrighted, proprietary Oracle software code” in the course of providing support for customers using Oracle’s Solaris OS.
Terix and Maintech officials have “falsely told unwitting end users they are authorized to access and distribute Solaris Updates to the end users and/or that the end users are entitled to perpetual support on [Solaris], including to receive Solaris Updates, based on their original purchase on the hardware on which the operating system was installed,” adds Oracle’s complaint, filed in U.S. District Court for the Northern District of California.
But Oracle, “and Sun before it, have long required customers to purchase an annual support agreement to receive that support,” according to the complaint.
Oracle customers who buy support services receive an identification number that allows them to create a login for Oracle’s support site and download updates for systems covered under the agreement, Oracle said.
Terix and Maintech induced a number of customers, including Sony, Comcast and Bank of New York Mellon, to “improperly obtain unauthorized Solaris Updates, including by using login credentials to Oracle’s password-protected support sites after their Oracle support on the relevant servers had expired,” according to the complaint.
Terix and Maintech convinced customers to cancel their support agreements with Oracle by “falsely representing” they could legally provide service and support for less money, it adds.
Oracle is asking for both a preliminary and permanent injunction against the defendants, an order dictating the return of any of Oracle’s intellectual property they hold, and punitive damages and restitution.
One of the companies named in Oracle’s suit strongly denied the allegations.
“Oracles complaint is without any basis in either law or fact,” Terix CEO Bernd Appleby said in an emailed statement Thursday.
“Terix fully respects and diligently strives to protect the intellectual property of any third party,” Appleby added. “Terix acts only as an authorized agent of the end-users, pursuant to their rights, to facilitate support services. Each end-user referenced in the complaint has valid license, rights, entitlements and credentials provided by Oracle. Each end-user has their unique login credentials which are only used for the sole benefit of that end-user and are never shared.”
Maintech couldn’t immediately be reached for comment Thursday.
Oracle’s allegations are similar to ones it has made in lawsuits against other Solaris service providers, such as ServiceKey, as well as Rimini Street, which provides third-party support for Oracle and SAP applications.
Like Terix, other third-party providers have maintained they operate within the legal boundaries of customers’ license rights.
Software vendors derive handsome profits from support and maintenance revenues, which also provide continuous income even when customers scale back on new license purchases, and are undoubtedly loath to see money siphoned away to third parties.
There are a few lessons for all customers to take away from the swirl of ongoing litigation, said analyst Ray Wang, CEO of Constellation Research.
“Customers who have paid maintenance should always be in the process of downloading all the patches, updates, and fixes they are entitled to before they cancel the contract,” Wang said via email.
“It’s an unfair trade practice to force customers away from third party maintenance options,” he added. “This lock-in is monopolistic in general, regardless of the vendor. Customers should make sure they do not bundle any Oracle and Sun contracts to avoid any other issues that continue a lock-in behavior.”