Oracle lawsuit alleges 'gray market conspiracy' over support services

ServiceKey and DLT Federal Business Systems Corporation are named in Oracle's complaint

Oracle is alleging that two companies violated its intellectual property as part of a "gray market" conspiracy to provide support for Oracle's Sun Solaris OS and hardware, according to a lawsuit filed last week in U.S. District Court for the Northern District of California.

The complaint names managed services provider ServiceKey of Norcross, Georgia, as well as DLT Federal Business Systems Corporation, a Wilmington, Delaware, company that provides IT services to government agencies.

ServiceKey and DLT-FBSC "conspired to steal and distribute copyrighted, proprietary Oracle software code, along with the login credentials necessary to download this code from Oracle's password-protected websites," according to the complaint.

Their goal was to "sell support on Oracle hardware to customers with no active support contract with Oracle," it adds.

Under false pretenses as "purported Oracle customers or partners," the companies took "vast quantities" of patches and updates for the Solaris OS as well as other support materials, it adds.

In addition, the defendants "falsely told unwitting third parties," including the U.S. Navy and Food and Drug Administration, that they had the "authority to provide Oracle's highly prized and proprietary intellectual property," the complaint states.

ServiceKey owns a "small number of Oracle/Sun computers" and paid for technical support from Oracle on some of them, "which are expressly limited for ServiceKey's own internal use," it adds.

The company has been issued at least three Customer Support Identification numbers and has log-ins for Oracle's support site, in order to "obtain technical support services for the specifically covered Oracle hardware," the complaint states.

However, "it appears that ServiceKey bought support from Oracle in order to acquire [support site] access credentials to resell to third parties in violation of ServiceKey's agreements with Oracle," it adds.

"Many unauthorized entities," including DLT-FBSC, have unlawfully taken advantage of ServiceKey's log-in credentials, according to the suit.

Those parties downloaded support-related software "well in excess of the quantities typical of a normal user," in one case over 800 pieces of software in one day, it adds. Oracle does not yet know the identities of these other parties but is hoping to obtain them through the discovery process, according to the complaint.

DLT-FBSC also had access to Oracle's support site "for certain authorized uses" as a member of the Oracle Partner Network, it adds. However, Oracle revoked that membership in November after DLT-FBSC's alleged misuse of the support materials, including to provide unauthorized support for third parties, according to the complaint.

The company allegedly convinced customers that were paying for Oracle support that they could cancel those contracts and lawfully get a similar level of service for less cost through DLT-FBSC.

Oracle is asking for damages and an injunction against the companies on a series of counts, including copyright infringement, breach of contract, unjust enrichment, unfair competition and fraudulent inducement.

ServiceKey and DLT-FBSC didn't respond to requests for comment Wednesday on Oracle's suit.

To some degree, the allegations echo those made by Oracle against former SAP subsidiary TomorrowNow, which provided lower-cost support for Oracle applications.

Oracle won a US$1.3 billion judgment against SAP, which admitted liability for illegal support-site downloads conducted by TomorrowNow. A judge overturned that jury award and Oracle is now seeking a new trial on damages.

The company has also sued third-party support provider Rimini Street, which is led by TomorrowNow co-founder Seth Ravin, claiming it had duplicated TomorrowNow's business model. Rimini Street has maintained its innocence and countersued Oracle, saying it acts within the rights of its customers' license agreements.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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Chris Kanaracus

IDG News Service

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