Oracle sues hardware partner over warehouse burglary

Oracle is suing Multis Group for allegedly not securing a warehouse, which led to thefts

An Oracle lawsuit filed last week could serve as a cautionary message to hardware partners that wish to do business with the vendor: Secure your buildings.

Multis had an existing contract with Sun Microsystems, which Oracle purchased earlier this year, for various services related to remanufacturing Sun technology, according to the suit filed Nov. 9 in U.S. District Court for the Northern District of California. Multis' responsibilities included refurbishing systems and distributing products to various sites around the world.

Under the deal, Multis was liable for losses or damage to any products caused by its failure to follow security guidelines established by Sun, the complaint states. Those rules included requiring a closed-circuit camera system as well as an alarm system for the facilities used.

In July 2009, a Union City, California, warehouse run by Multis was burglarized, with 36 disk drives and four CPU modules stolen. A security firm working for Oracle conducted an investigation of the theft. As a result, Multis "undertook to make certain improvements to its existing security measures," the complaint states.

But in April of this year, the site was once again burgled. Thieves gained entry by breaking a window and then used clippers to snip through a cage containing Oracle products. They snatched about 1,450 memory modules worth roughly US$61,500, according to the complaint.

This event prompted another visit from Oracle's security contractors, who found that Multis hadn't finished the security improvements planned after the initial theft, the complaint states. Security film had been installed on some windows but not all of them, including the one used by burglars to get into the warehouse.

Oracle ordered Multis to remedy that shortcoming as well as make other adjustments, such as tweaking the closed-circuit camera system to get better images of intruders. The demands also included "consideration of steel bars for additional security at window openings," the complaint adds.

Still, a third burglary occurred in May. Security film had been placed on all windows, but "Multis had not installed iron bars or taken other steps to secure the stripping that held the windows in place," it states. The suspects removed the stripping and were able to get through the window, it adds.

This time, thieves took 4,876 memory modules worth $267,244, according to Oracle. Another security review found that Multis was still not compliant with its security obligations, the complaint states.

Multis was also contractually obligated to obtain insurance that would cover such losses. Oracle's complaint alleges the company has failed to do so.

Oracle is seeking damages of at least $328,742 plus interest and legal costs.

Oracle spokeswoman Deborah Hellinger declined comment.

Multis did not immediately respond to a request for comment Wednesday.

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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Tags business issuesMergers / acquisitionsintellectual propertySun MicrosystemsCivil lawsuitshardware systemslegalOracle

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Chris Kanaracus

IDG News Service
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