The US Court of Appeals for the Ninth Circuit found that the defendant did not violate California and Nevada computer crime laws when it scraped the plaintiff’s website for software updates (which were permissible to access) using a method prohibited by the applicable terms of use. The Court affirmed, however, that the defendant infringed the plaintiff’s copyrights by copying software updates for one customer using another customer’s license. Oracle USA, Inc., et al. v. Rimini Street, Inc., Case Nos. 16-16832; -16905 (9th Cir., Jan. 8, 2018) (Fogel, J).

Rimini, an enterprise software support provider, provides Oracle’s enterprise software updates to licensees of Oracle’s software. In doing so, Rimini competes with Oracle’s direct maintenance services. To obtain Oracle’s software, Rimini used automated downloading tools and copied the software from Oracle’s website. Oracle sued Rimini for copyright infringement and claims under the California Comprehensive Data Access and Fraud Act and the Nevada Computer Crimes Law. A jury found against Rimini on the claims and awarded Oracle $124 million. Rimini appealed, and the Electronic Frontier Foundation (EFF) filed an amicus with respect to the California and Nevada state computer law claims.

Rimini and EFF urged the Ninth Circuit to reject the lower court’s decision regarding the California and Nevada state computer law claims because it essentially turns millions of internet users into criminals on the basis of innocuous and routine online conduct. EFF and Rimini argued that neither state law applies to violations of a website’s terms of use when a user has permission and authorization to access and use the computer or data at issue, and simply accesses or uses that information in a manner the website owner does not like. 

The Ninth Circuit agreed, finding that accessing data that is generally permitted to be accessed—even when such access uses a method prohibited by the applicable terms of use—does not violate the state computer crime laws. The Court determined the key to the state statutes was whether Rimini was authorized in the first instance to take and use the information that it downloaded. Since the Court found that Rimini had such authorization, Rimini did not violate the state statutes. 

Addressing the issue of copyright infringement, the Ninth Circuit affirmed the district court’s finding that Rimini infringed Oracle’s copyright by copying its software. The Court rejected Rimini’s argument that the licenses held by Oracle licensees gave Rimini the right to copy the software under the license of one customer for work done for other customers. The Court pointed out that licensees may hire a third party, such as Rimini, to maintain their software for them, but nothing in the licenses permits licensees to grant a non-party to the license a general right to copy proprietary software. 

The Court reduced the amount of the award by approximately $50 million, reversed the permanent injunction against Rimini, and reversed the district court’s determination that Rimini violated California’s Unfair Competition Law.