Oracle USA, Inc. et al v. Rimini Street, Inc. et al

Filing 1049

ORDER Plaintiffs' Motion for a Preliminary Injunction ECF No. 900 is GRANTED in-part and DENIED in-part. Plaintiffs have until October 1, 2016 to submit for signature an appropriate permanent injunction complying with this Ord er. The Clerk is directed to enter judgment in favor of Plaintiffs Oracle America, Inc. and Oracle International Corporation and against Defendants Rimini Street, Inc. and Seth Ravin on Plaintiffs' Ninth Cause of Action. Plaintiffs' Moti on for Prejudgment Interest ECF No. 910 is GRANTED in-part and DENIED in-part. Plaintiffs have until October 1, 2016 to submit for signature an appropriate order setting prejudgment interest complying with this Order. Plaintiffs� 39; Motion for Attorneys' Fees and Costs ECF No. 917 is GRANTED. Clerk is directed to enter an award of attorneys' fees and costs in favor of Plaintiffs Oracle USA, Inc.; Oracle America, Inc.; and Oracle International Corporation and against Defendants Rimini Street, Inc. and Seth Ravin in the amount of $46,227,363.36. Signed by Judge Larry R. Hicks on 09/21/2016. (Copies have been distributed pursuant to the NEF - KW) Modified on 9/21/2016 to correct bold(KW).

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 *** 9 10 11 12 13 14 15 16 ORACLE USA, INC., a Colorado corporation; ) ORACLE AMERICA, INC., a Delaware ) corporation; and ORACLE ) INTERNATIONAL CORPORATION, a ) California corporation; ) ) Plaintiffs, ) ) v. ) ) RIMINI STREET, INC., a Nevada ) corporation; and SETH RAVIN, an individual; ) ) Defendants. ) ) 17 2:10-CV-00106-LRH-PAL ORDER Before the court are plaintiffs Oracle USA, Inc.; Oracle America, Inc.; and Oracle 18 International Corporation’s (collectively “Oracle”) motion for a permanent injunction 19 (ECF No. 900), motion for prejudgment interest (ECF No. 910), and motion for attorneys’ fees 20 (ECF No. 917). Defendants Rimini Street, Inc. (“Rimini”) and Seth Ravin (“Ravin”) (collectively 21 “defendants”) filed oppositions to the motions (ECF Nos. 905, 958, 998) to which Oracle replied 22 (ECF Nos. 907, 979, 1018). 23 I. 24 Facts and Procedural History This action has an extensive factual and procedural history. In brief, Oracle develops, 25 manufactures, and licenses computer software. Oracle also provides software support services to 26 customers who license its software. Defendant Rimini is a company that provides similar software 1 support services to customers licensing Oracle’s software and competes directly with Oracle to 2 provide these services. Defendant Ravin is the owner and CEO of Rimini. 3 On January 25, 2010, Oracle filed a complaint for copyright infringement against 4 defendants alleging that Rimini copied several of Oracle’s copyright-protected software programs 5 onto Rimini’s own computer systems in order to provide software support services to its 6 customers. ECF No. 1. In June 2011, Oracle filed a second amended complaint alleging thirteen 7 causes of action against defendants: (1) copyright infringement; (2) violation of the Federal 8 Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030(a); (3) violation of the California 9 Computer Data Access and Fraud Act, Cal. Penal Code § 502; (4) violation of the Nevada 10 Computer Crimes Law, NRS § 205.4765; (5) breach of contract; (6) inducement of breach of 11 contract; (7) intentional interference with prospective economic advantage; (8) negligent 12 interference with prospective economic advantage; (9) unfair competition; (10) trespass to chattels; 13 (11) unjust enrichment; (12) unfair practices; and (13) accounting. ECF No. 146. 14 A jury trial was held on Oracle’s claims from September 14 through October 13, 2015. On 15 October 13, 2015, the jury returned its verdict and found that defendant Rimini engaged in 16 copyright infringement of Oracle’s copyrighted PeopleSoft, J.D. Edwards, and Siebel-branded 17 Enterprise Software products. ECF No. 896. The jury also found that both defendants Rimini and 18 Ravin violated the California Computer Data Access and Fraud Act and the Nevada Computer 19 Crimes Law. Id. Ultimately, the jury awarded Oracle $35,600,00.00 against Rimini for copyright 20 infringement and awarded Oracle $14,427,000.00 against both Rimini and Ravin for violation of 21 the state computer access statutes. Id. After the jury verdict, Oracle filed the present motions for a 22 permanent injunction, prejudgment interest, and attorneys’ fees. ECF Nos. 900, 910, 917. The 23 court shall address each post-trial motion below. 24 II. 25 26 Motion for Permanent Injunction (ECF No. 900) As part of its motion for a permanent injunction, Oracle seeks three separate forms of relief. First, Oracle seeks judgment against defendants on its claim for violation of California’s Unfair 2 1 Competition Law. Second, Oracle seeks a permanent injunction to enjoin and restrain defendants 2 from continued infringement of Oracle’s copyrighted Enterprise Software products and from 3 improperly accessing and taking data from Oracle’s websites and computer systems. Finally, 4 Oracle seeks disposition of all copies of the infringing software on defendants’ systems. 5 A. California’s Unfair Competition Law 6 Oracle seeks judgment against both defendants Rimini and Ravin on its claim for violation 7 of California’s Unfair Competition Law (“UCL”), Cal. Bus & Prof. Code § 17200 et seq. 8 California’s UCL prohibits unlawful, fraudulent, and unfair business practices. Cel-Tech Comm’s, 9 Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (Cal. 1992). There is no right to a jury trial 10 under the UCL. Rather, a violation of the UCL occurs as a matter of law when there has been a 11 violation of a predicate act. CAL. BUS & PROF. CODE § 17200. A violation of the California 12 Computer Data Access and Fraud Act is an identified predicate act under the UCL. See Cal-Tech 13 Comm’s, Inc., 20 Cal. 4th at 180; CAL. BUS & PROF. CODE § 17500 et seq. Because the jury found 14 that defendants violated the CDAFA, Oracle is also entitled to judgment against defendants on its 15 UCL claim. Accordingly, the court shall grant Oracle’s motion and issue judgment in favor of 16 plaintiffs Oracle America, Inc. and Oracle International Corporation on this claim. 17 B. Permanent Injunction 18 “[T]he decision whether to grant or deny injunctive relief rests within the equitable 19 discretion” of the district court. eBay, Inc. v. MercExchange, LLC, 547 U.S. 388, 394 (2006). Such 20 discretion should be “exercised consistent with traditional principles of equity.” Id. In determining 21 whether to issue a permanent injunction in copyright infringement actions, courts evaluate four 22 factors: (1) irreparable harm; (2) inadequacy of monetary damages; (3) the balance of hardships; 23 and (4) whether the public interest would be served by a permanent injunction. Id. at 391; see also 24 Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989, 999 (9th Cir. 2011) (applying the 25 four-factor test outlined in eBay). Further, an injunction should issue when the intervention of the 26 /// 3 1 court in equity is essential to protect a party’s rights against injuries that could not otherwise be 2 remedied. See Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). 3 1. Availability of a Permanent Injunction 4 Before addressing whether to award Oracle an injunction in this action, the court must first 5 determine whether Oracle is entitled to seek a permanent injunction against defendants and under 6 what statute(s), if any. 7 Initially, Oracle contends that it may seek a permanent injunction under the Nevada 8 Computer Crimes Law (“NCCL”). See NRS § 205.513(2) (“An injunction . . . [m]ay be issued 9 without proof of actual damage sustained by any person.”). However, under the NCCL, only the 10 Nevada Attorney General or the appropriate district attorney may seek a permanent injunction 11 against a party who has violated the act. NRS § 205.513(1) (stating that only the “Attorney General 12 or the appropriate district attorney may file an action in any court of competent jurisdiction to 13 prevent the occurrence or continuance of that act or practice.”). Thus, the plain language of the 14 statute does not authorize Oracle, a private party, to seek a permanent injunction for a violation of 15 the NCCL. 16 Next, Oracle seeks a permanent injunction under the California Computer Data Access and 17 Fraud Act (“CDAFA”). The CDAFA provides that the owner of a computer network, like Oracle, 18 may seek injunctive relief for violations of the statute. CAL. PENAL CODE § 502(e)(1) (“In addition 19 to any other civil remedy available, the owner or lessee of the computer, computer system, 20 computer network, computer program, or data who suffers damage or loss by reason of a violation 21 of any of the provisions of subdivision (c) may bring a civil action against the violator for 22 compensatory damages and injunctive relief or other equitable relief.”). Accordingly, Oracle is 23 entitled to seek a permanent injunction against defendants under the CDAFA. 24 Finally, Oracle contends that it is entitled to seek a permanent injunction under the 25 Copyright Act. The Copyright Act provides that a district court may enter an injunction “on such 26 terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. 4 1 § 502(a). Therefore, the court finds that Oracle is entitled to separately seek a permanent injunction 2 against defendant Rimini under the Copyright Act.1 3 4 2. Irreparable Injury The first factor in a permanent injunction analysis is whether a plaintiff has suffered an 5 irreparable injury as a result of a defendant’s conduct, or will suffer an irreparable injury absent an 6 injunction. See American Trucking Ass’ns v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 7 2009). As part of a court’s irreparable injury analysis in a copyright action, courts regularly 8 examine three factors: (1) direct competition between the parties; (2) loss of market share due to 9 the infringement; and (3) loss of customer and business goodwill. See, e.g., Presidio Components 10 Inc. v. Am. Tech. Ceramics Corp., 702 F.3d 1351, 1362 (Fed. Cir. 2012) (stating that direct 11 competition in the same market strongly supports the potential for irreparable harm absent an 12 injunction); i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010) (finding that 13 harm to a party’s market share, revenues, and brand recognition is relevant for determining whether 14 the party has suffered an irreparable injury); Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 15 930 (Fed. Cir. 2012) (holding that loss of goodwill, damage to reputation, and loss of business 16 opportunities are all valid grounds for finding irreparable harm). 17 Here, the court finds that defendants’ unlawful actions, to wit copyright infringement and 18 violations of the state computer access statutes, irreparably injured Oracle’s business reputation 19 and goodwill. First, it is undisputed that Oracle and Rimini directly compete with each other to 20 provide software support services and that Rimini infringed Oracle’s copyrighted works, which 21 supports issuance of a permanent injunction. See Presidio Components, Inc., 702 F.3d at 1362. 22 Second, the evidence in this action established Rimini’s callous disregard for Oracle’s 23 copyrights and computer systems when it engaged in the infringing conduct. For example, the 24 evidence established that Rimini’s egregious and continued infringement enabled it to rapidly build 25 1 26 As the jury did not find that defendant Ravin engaged in any copyright infringement, Oracle may not separately seek a permanent injunction against Ravin pursuant to the Copyright Act. 5 1 its business and gain market share against Oracle in the software support service market by offering 2 cut-rate prices on its support services for Oracle software, generally at a discount of 50% of 3 Oracle’s prices for similar service contracts. In fact, Rimini’s business model was built entirely on 4 its infringement of Oracle’s copyrighted software and its improper access and downloading of data 5 from Oracle’s website and computer systems, and Rimini would not have achieved its current 6 market share and business growth without these infringing and illegal actions. Moreover, Rimini 7 landed clients for its services by telling customers that Oracle’s services were overpriced and could 8 be provided at the same rate Rimini was offering while still providing Oracle significant profits, 9 thereby harming Oracle’s business reputation. Through this misconduct, Rimini gained an 10 improper advantage that it used to harm Oracle’s business reputation and goodwill in the software 11 service industry. Such injuries to a business’ reputation and goodwill have consistently been held 12 to constitute irreparable harm. See Apple Inc. v. Psystar Corp. (Apple II), 658 F.3d 1150, 1154 (9th 13 Cir. 2011). 14 Finally, Rimini’s claim that it no longer engages in the conduct adjudged by the court and 15 jury to infringe Oracle’s copyrights is not a basis to deny issuance of an injunction. See 16 Metro-Goldwyn-Mayer Studios v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1222 (C.D. Cal. 2007) 17 (stating that “[a] private party’s discontinuation of unlawful conduct does not make the dispute 18 moot, however. An injunction remains appropriate to ensure that the misconduct does not recur as 19 soon as the case ends.”). Therefore, the court finds that this factor weighs in favor of a permanent 20 injunction. 21 22 3. Inadequacy of Monetary Damages In order to establish that an injunction is warranted, a plaintiff must show that monetary 23 damages are inadequate to fully compensate it for the defendant’s conduct. eBay, 547 U.S. at 391. 24 Here, the court finds that Oracle has established that monetary damages alone are inadequate to 25 compensate it for the losses suffered because of defendants. First, the court notes that certain harms 26 suffered by Oracle like lost market share and company goodwill are intangible injuries difficult to 6 1 quantify and compensate. See Apple II, 658 F.3d at 1154 (stating that injuries to a business’ 2 reputation and company goodwill are intangible injuries difficult to quantify and compensate). 3 Second, the infringement damages in this action were complex and difficult to determine. Unlike a 4 patent case where a specific number of infringing products are sold at a specific price, in this 5 copyright infringement action there was no efficient way to measure the damages Oracle suffered. 6 In particular, the jury was provided with two separate damage theories, both of which required the 7 jury to evaluate a substantial amount of evidence and expert testimony to reach the damages 8 awarded in this action. Oracle’s lost profits theory required the jury to determine the lost profits, if 9 any, of a multi-billion dollar company that has a continuously growing business. Similarly, 10 Oracle’s hypothetical license damages theory required the jury to determine the amount Oracle 11 would have charged for Rimini, its competitor in the software service market, to license its 12 copyrighted software when presented with evidence that Oracle does not license its software to 13 such competitors. The difficulty for the jury in determining damages in this action supports 14 Oracle’s claim that monetary damages alone are insufficient to fairly and fully compensate it for 15 defendants’ conduct. Finally, one of the most fundamental rights the holder of a copyright has is 16 the right to exclude others, and this right has routinely been held difficult to compensate solely 17 through monetary compensation. See eBay, 547 U.S. at 395 (Roberts, C.J. concurring) (identifying 18 and explaining the difficulty of protecting a right to exclude through monetary remedies alone). 19 Based on all the above, the court finds that this factor weighs in favor of an injunction. 20 21 4. Balance of Hardships A court must weigh and balance the competing effect that granting or withholding an 22 injunction would have on each party. See Williams v. Bridgeport Music, Inc., 2015 U.S. Dist. 23 LEXIS 97262, at *128 (C.D. Cal. 2015). The court has reviewed the documents and pleadings on 24 file in this matter and finds that the balance of hardships weighs in favor of an injunction. 25 Generally, the balance of hardships tips in favor of a holder of a copyright seeking to protect its 26 copyrighted works, especially when the party to be enjoined does not have a separate legitimate 7 1 business purpose for continuation of the infringing acts. Grokster, 518 F. Supp. 2d at 1220. This 2 case is no different. First, Rimini does not have a separate legitimate business purpose for 3 continuation of the infringing acts. Second, there is no evidence that Rimini would be harmed by 4 an injunction that enjoins and restrains future copyright infringement or using the materials gained 5 from its infringement because Rimini has already represented to the court that is has changed its 6 business model and support services away from the infringing model in response to the court’s 7 orders on summary judgment. Finally, because Oracle seeks to enjoin only acts that have already 8 been determined to be unlawful, the balance of hardships weighs in Oracle’s favor. 9 10 5. Public Interest “[T]he touchstone of the public interest factor is whether an injunction, both in scope and 11 effect, strikes a workable balance between protecting the [copyright holder’s] rights and protecting 12 the public from the injunction’s adverse effects.” i4i, 598 F.3d at 863. 13 Here, having reviewed all the documents and pleadings on file in this matter, the court finds 14 that an injunction against future copyright infringement and violations of the computer access 15 statutes are in the public interest. See Apple Comput. v. Franklin Comput. Corp., 714 F.2d 1240, 16 1255 (3d Cir. 1983) (“[I]t is virtually axiomatic that the public interest can only be served by 17 upholding copyright protections and, correspondingly, preventing the misappropriation of the 18 skills, creative energies, and resources which are invested in the protected work.”). Further, an 19 injunction against future infringement would not harm the public interest of access to competitive 20 services because Rimini has repeatedly represented to the court that its current business model is 21 not based on its prior infringing conduct. Taking defendants’ statements as true, then Rimini’s 22 ability to compete against Oracle in the software support service market would not be lost with an 23 injunction, and thus, the public would still have access to competition in that market. Finally, 24 issuing an injunction in this action “ultimately serves the purpose of enriching the general public 25 through access to creative works” by giving Oracle an incentive to continue to develop software for 26 public use. Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1986 (2016). Therefore, the 8 1 court finds that the relevant eBay factors favor issuance of a permanent injunction in this action, 2 and the court shall grant Oracle’s motion accordingly. 3 C. Disposition of Infringing Articles 4 In addition to a permanent injunction, Oracle seeks an order pursuant to the impoundment 5 provisions of the Copyright Act either requiring defendants to turn over all infringing copies of 6 Oracle’s copyrighted works to a neutral third party to be approved by the court or destroying all 7 infringing copies outright, thereby preventing defendants from continuing to leverage the benefits 8 of its infringing actions in its current business model. See ECF No. 900. 9 The Copyright Act provides that, “[a]s part of a final judgment or decree, the court may 10 order the destruction or other reasonable disposition of all copies or phonorecords found to have 11 been made or used in violation of the copyright owner’s exclusive rights.” 17 U.S.C. § 503(b). A 12 disposition order is “an equitable remedy issued under the broad powers vested in a trial judge 13 under 17 U.S.C. § 503(b).” Rogers v. Koons, 960 F.2d 301, 313 (2d Cir. 1992). However, such 14 seizure and impoundment orders are “extraordinary relief” solely within the discretion of the 15 district court. See Williams, 2015 U.S. Dist. LEXIS 97262, at *131. Although the Ninth Circuit has 16 not identified appropriate factors to consider in determining whether to issue impoundment, several 17 courts have applied the same factors related to issuance of a permanent injunction. See, e.g., 18 Hounddog Prods., L.L.C. v. Empire Film Grp., Inc., 826 F. Supp. 2d 619, 633 (S.D.N.Y. 2011); 19 Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d 470, 492 (6th Cir. 2007) (affirming a 20 district court’s order of impoundment upon consideration of the traditional injunction factors). 21 With respect to Oracle’s proposed disposition order, the court finds that Oracle is not 22 entitled to a separate order impounding Rimini’s computers and media. Generally, disposition 23 orders should be granted only where other legal remedies and compensatory damages do not 24 provide adequate relief. Here, however, Oracle has received monetary compensation for Rimini’s 25 infringement, and the court has found that a permanent injunction should be issued against 26 defendants against future conduct. These remedies are sufficient to protect and compensate Oracle. 9 1 Further, the requested outcome of Oracle’s disposition remedy - preclusion of Rimini from using 2 the infringing works - is achieved the same with a permanent injunction as it would be with a 3 disposition order. Thus, having already found that Oracle is entitled to a permanent injunction, the 4 court shall deny Oracle’s request for a separate disposition order under Section 503(b). 5 III. Motion for Prejudgment Interest (ECF No. 910) 6 Oracle also seeks an award of prejudgment interest on the jury verdict. Prejudgment interest 7 is “statutorily prescribed interest accrued either from the date of the loss or from the date when the 8 complaint was filed up to the date the final judgment is entered. . . . Depending on the statute, it 9 may or may not be an element of damages.” Prejudgment interest, Black’s Law Dictionary (10th 10 ed. 2014). The purpose behind prejudgment interest is “to compensate for the loss of use of money 11 due as damages from the time the claim accrues until judgment is entered.” Barnard v. Theobald, 12 721 F.3d 1069, 1078 (9th Cir. 2013). Whether to award prejudgment interest under an applicable 13 statute is in “the district court’s sound discretion.” Id. 14 Initially, Oracle seeks prejudgment interest under the Copyright Act on the jury’s award of 15 $35.6 million in damages against defendant Rimini for copyright infringement. See ECF No. 910. 16 An award of prejudgment interest is an available statutory remedy under the Copyright Act. Polar 17 Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 716 (9th Cir. 2004). In the Ninth Circuit, the 18 starting point for federal prejudgment interest is the post-judgment rate established by 28 U.S.C. 19 § 1961, which is the weekly average of the one-year constant maturity Treasury yield. See Price v. 20 Stevedoring Servs. of Am., Inc., 697 F.3d 820, 836-37 (9th Cir. 2012) (en banc), see also Williams, 21 2015 U.S. Dist. LEXIS 97262, at * 144. In its motion, Oracle seeks prejudgment interest at the higher Prime rate rather than the 22 23 Treasury rate, contending that the Prime rate is sufficient to cover inflation over the lengthy 24 infringement and litigation period. See ECF No. 910. Further, Oracle argues that the hypothetical 25 license measure of damages and the equities considered in a copyright case - compensation to the 26 /// 10 1 plaintiff, deterring infringers, and preventing unjust enrichment of the defendant - weigh strongly 2 in favor of a market-based rate higher than the Section 1961 Treasury rate. The court disagrees. 3 “[U]nless the district court concludes that the equities demand a different rate,” an award of 4 prejudgment interest in a copyright infringement case “should be based on the fifty-two week 5 Treasury bill rate.” Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 886 F.2d 1545, 1552-53 6 (9th Cir. 1989). Further, the Ninth Circuit has repeatedly held that the Section 1961 rate is the 7 appropriate rate of prejudgment interest in an action for copyright infringement. Price, 697 F.3d at 8 836; Williams, 2015 U.S. Dist. LEXIS 97262, at * 144. Here, the court finds that there is no basis 9 to deviate from the standard Treasury rate to the Prime rate in this action. That being said, 10 however, the court finds that there is good cause to set the prejudgment interest rate at the Treasury 11 rate on the date infringement began, rather than at the time of judgment. The court makes this 12 finding because of the nature of the jury’s award of hypothetical license damages. As the jury 13 awarded damages to Oracle in an amount it would have received from Rimini for licensing 14 Oracle’s software at the time it began infringing Oracle’s copyrights in late 2006, the court finds 15 that this is the relevant time period for prejudgment interest. After this date, when Rimini began 16 infringing Oracle’s copyrights, Oracle lost out on the licensing fees it would have received, absent 17 infringement. It is not equitable in the court’s view to allow defendants to reap a windfall by the 18 lower interest rates that are now available simply because they engaged in discovery delays and 19 other litigation tactics (addressed more thoroughly in Oracle’s motion for attorneys’ fees) that kept 20 this action in litigation for several years. Therefore, the court shall grant Oracle’s motion and set 21 the appropriate rate for prejudgment interest under the Copyright Act as the weekly average one- 22 year constant maturity Treasury yield at the start of the infringement. 23 Second, Oracle also seeks prejudgment interest under the CDAFA and the NCCL on the 24 jury’s award of $14.4 million in damages for violation of the state computer access statutes. Under 25 California law, “a person who is entitled to recover damages certain, or capable of being made 26 certain by calculation, and the right to recover which is vested in the person upon a particular day, 11 1 is entitled to also recover interest from that day.” CAL. CIV. CODE § 3287(a). However, under 2 California law, only damages that are “certain, or capable of being made certain by calculation” 3 prior to litigation may accrue prejudgment interest. Duale v. Mercedez-Benz USA, LLC, 148 Cal. 4 App. 4th 718, 728-29 (2007). The “test for recovery of prejudgment interest under § 3287(a) is 5 whether [the] defendant actually knows the amount owed or from reasonably available information 6 could the defendant have computed that amount.” Id. Further, “where the amount of damage, as 7 opposed to the determination of liability, depends upon a judicial determination based upon 8 conflicting evidence” Section 3287 “does not authorize prejudgment interest.” Id. Here, the amount 9 of damages for defendants’ conduct under the CDAFA was not known or easily calculable prior to 10 trial and required the jury to evaluate and weigh conflicting evidence. Therefore, the court finds 11 that Oracle is not entitled to prejudgment interest under the CDAFA. In contrast, in Nevada, prejudgment interest is a matter of statutory right. Torres v. 12 13 Goodyear Tire & Rubber Co., 317 P.3d 828, 830 (Nev. 2014) (“NRS 17.130 . . . provides a 14 statutory right for interest on judgments.”). Nevada law establishes a prejudgment interest rate of 15 2% plus “the prime rate at the largest bank in Nevada ascertained by the Commissioner of 16 Financial Institutions on January 1 or July 1, as the case may be, immediately preceding the date of 17 judgment.” NRS §17.130. Such interest is assessed as simple interest on an annual basis. Torres, 18 317 P.3d at 830-31. Further, under Nevada law, interest is drawn “from the time of service of the 19 summons.” Sobel v. Hertz, 291 F.R.D. 525, 544 (D. Nev. 2013). Here, the summons in this action 20 was served on January 27, 2010. Thus, the court finds that Oracle is entitled to prejudgment 21 interest at the Nevada statutory rate for the $14.4 million in damages for violation of the NCCL 22 starting January 27, 2010, through the date of judgment. 23 /// 24 /// 25 /// 26 /// 12 1 2 IV. Motion for Attorneys’ Fees (ECF No. 917) Oracle’s last motion is its present motion for attorneys’ fees and costs.2 ECF No. 917. In its 3 request, Oracle is seeking a total of $35,627,807.99 in attorneys’ fees; $4,950,560.70 in taxable 4 costs; and $17,636,755.68 in non-taxable costs for a total attorneys’ fees and costs award of 5 $58,215,124.37. The first issue before the court is whether to award attorneys’ fees in this action. 6 Then, if the court finds that such a fee award is appropriate, the court must determine the 7 appropriate fees award. 8 A. Determination of Whether to Award Fees 9 Under Section 505 of the Copyright Act, the court has discretion to award a prevailing party 10 costs and attorneys’ fees. See 17 U.S.C. § 505 (“In any civil action under this title, the court in its 11 discretion may allow the recovery of full costs by or against any party . . . . [T]he court may also 12 award a reasonable attorney’s fee to the prevailing part as part of the costs.”). In order to determine 13 whether an award of attorneys’ fees and non-taxable costs are warranted under the Copyright Act, 14 courts examine five factors: (1) the degree of success of the prevailing party; (2) the objective 15 reasonableness of the losing party’s arguments during litigation; (3) the need to make the 16 prevailing party whole; (4) deterrence; and (5) the purposes of the Copyright Act. See Kirtsaeng, 17 136 S. Ct. at 1986; McCulloch v. Albert E. Price, Inc., 823 F.2d 316, 323 (9th Cir. 1987); Jackson 18 v. Axton, 25 F.3d 884, 890 (9th Cir. 1994) (stating the five factor test for attorneys’ fees under the 19 Copyright Act). Further, the Copyright Act does not condition an award of fees on a finding of 20 willful infringement. Casella v. Morris, 820 F.2d 362, 366 (11th Cir. 1987) (“[A] showing of bad 21 22 23 24 25 26 2 Oracle’s motion is accompanied by a breakdown of time spent by each contracted law firm, including the individuals who provided the work, what was being worked on, and the amount of time spent on that item as outlined in four separate declarations from Attorney Thomas S. Hixson, partner with the law firm Morgan, Lewis and Bockius LLP (ECF No. 918, Hixson Decl.); Attorney Kieran P. Ringgenberg, partner with Boies, Schiller & Flexner LLP (ECF No. 919, Ringgenberg Decl.); James C. Maroulis, Managing Counsel at Oracle (ECF No. 920, Maroulis Decl.); and Richard J. Pocker, also a partner with Boies, Schiller & Flexner LLP (ECF No. 921, Pocker Decl.). Oracle also filed a supplement to its motion for attorneys’ fees and costs updating its request for fees to include time spent at trial and on post-trial motions. ECF No. 996. 13 1 faith or frivolity is not a requirement of a grant of fees.”). Rather, a court must evaluate each of the 2 relevant factors and make a decision on “a more particularized, case-by-case assessment.” 3 Kirtsaeng, 136 S. Ct. at 1986. Each factor to determine whether an award of attorneys’ fees is 4 warranted is addressed below. 5 6 1. Degree of Success Oracle argues that the degree of success it achieved on its claims warrants an award of 7 attorneys’ fees in this case. The court agrees. Oracle successfully defeated all of defendants’ 8 counterclaims, including counterclaims for copyright misuses, early in this litigation. Then, at trial, 9 Oracle successfully prevailed on its claim for copyright infringement as the jury found that Rimini 10 infringed every one of the 93 separate copyright registrations at issue. And important to the court is 11 the fact that the trial was a copyright infringement case first and foremost, regardless of all other 12 claims pled. Oracle also prevailed on its two separate state computer access claims against both 13 defendants. As a result of its overall success, Oracle won a $50 million verdict against defendants - 14 including $35,600,000 for copyright infringement and $14,427,000 for the state computer access 15 claims - which was five times the damages number presented at trial by defendants’ damages 16 expert. There is no question to the court that a $50 million verdict is a substantial success 17 regardless of what could have been issued in this case. Therefore, this factor weighs in favor of 18 awarding attorneys’ fees. 19 20 2. Objective Reasonableness The second factor is the objective reasonableness of the losing party’s position during the 21 litigation. Kirtsaeng, 136 S. Ct. at 1983. “No matter which side wins a case, the court must assess 22 whether the other side’s position was (un)reasonable.” Id. at 1988. However, the objective 23 reasonableness of a losing party’s position “can be only an important factor in assessing fee 24 applications - not the controlling one.” Id. at 1988. “That means in any given case a court may 25 award fees even though the losing party offered reasonable arguments (or, conversely, deny fees 26 even though the losing party made unreasonable ones).” Id. “For example, a court may order 14 1 fee-shifting because of a party’s litigation misconduct, whatever the reasonableness of his claims or 2 defenses.” Id. at 1988-89 (citing Viva Video, Inc. v. Cabrera, 9 Fed. Appx. 77, 80 (2nd Cir. 2001)). 3 “Or a court may do so to deter repeated instances of copyright infringement or over aggressive 4 assertions of copyright claims, again even if the losing position was reasonable in a particular 5 case.” Id. at 1989 (citing Bridgeport Music, Inc. v. WB Music Corp., 520 F.3d 588, 593-95 (6th Cir. 6 2008) (awarding fees against a copyright holder who filed hundreds of suits on an overbroad legal 7 theory, including in a subset of cases in which it was objectively reasonable)). 8 9 Here, the court finds that defendants’ litigation position that it did not engage in copyright infringement was not an objectively reasonable position. Rather, it was based on a clear misreading 10 of Oracle’s software licensing agreements and a conscious disregard for the manner that Rimini 11 used and housed Oracle’s copyrighted software programs on its own servers. In fact, Rimini’s 12 position was so unreasonable that the court was able, at summary judgment, to determine that 13 Rimini engaged in massive copyright infringement of Oracle’s copyrighted works, thereby leaving 14 only a few issues for trial. However, throughout this litigation, including right up until trial, Rimini 15 contended that no copyright infringement ever occurred because it did not use the copyrighted 16 software in a proscribed manner. Based on defendants’ conduct, the court finds that their position 17 was not reasonable. 18 Further, even if defendants’ litigation position was reasonable, the court finds that 19 attorneys’ fees are still warranted in this action because of Rimini’s repeated instances of copyright 20 infringement and its significant litigation misconduct in this action. See Id. It is undisputed that 21 defendants ignored their preservation obligations and destroyed evidence prior to trial, including a 22 key computer directory containing Oracle software that Rimini used for multiple customers in 23 violation of customer licenses. In fact, Magistrate Judge Leen found that defendants intentionally 24 deleted the software library well after they were on notice of potential litigation and were well 25 aware that the software library was potentially relevant evidence. As a result of their litigation 26 misconduct, defendants were forced to acknowledge the spoliation and destruction of evidence at 15 1 trial, and the court even gave an adverse inference jury instruction about the issue. Therefore, 2 taking all of the above into consideration, the court finds that this factor weighs in Oracle’s favor. 3. The Need to make Oracle Whole 3 4 The third factor in determining whether to award attorneys’ fees under the Copyright Act is 5 the need to make the prevailing party whole. See McCulloch, 823 F.2d at 323 (“[S]ection 505 is 6 intended in part to encourage the assertion of colorable copyright claims . . . and to make the 7 plaintiffs whole.”). 8 9 In its motion, Oracle argues that an award of attorneys’ fees is necessary to compensate it for its huge outlay of fees and costs necessarily incurred in enforcing its copyrights. The court 10 agrees. Oracle has spent decades developing its copyrighted software only to have the defendants 11 take that hard work and use it to their benefit at Oracle’s expense. In order to prosecute this action, 12 Oracle was compelled to spend a significant amount of resources in legal fees and costs over what 13 was eventually awarded in damages just to stop defendants’ unlawful conduct. Without a fee 14 award, the court finds that Oracle’s investment in its intellectual property and its incentive to create 15 future software would not be appropriately protected or compensated. 4. Deterrence 16 17 The fourth factor in a court’s attorneys’ fee analysis is the need to deter defendants and 18 others from engaging in future infringement. McCulloch, 823 F.2d at 323. Here, the court finds that 19 an award of attorneys’ fees is appropriate to deter defendant Rimini from its pattern of infringing 20 Oracle’s copyrights, which started when the business began and continued until the middle of this 21 litigation. Further, an award of fees is necessary to deter other third party service providers from 22 engaging in similar infringing conduct in order to compete with Oracle for software support 23 services. 24 5. Purpose of the Copyright Act 25 The last factor in a court’s analysis of whether to an award attorneys’ fees is whether an 26 award will further the purposes of the Copyright Act. See Mattel, Inc. v. MGA Entm’t, Inc., 705 16 1 F.3d 1108, 1111 (9th Cir. 2012) (“The most important factor in determining whether to award fees 2 under the Copyright Act, is whether an award will further the purposes of the Act.”). The court finds that awarding attorneys’ fees in this action furthers the purposes of the 3 4 Copyright Act as it rewards owners of intellectual property, like Oracle, for pursuing their rights 5 under the act and “encouraging and rewarding authors’ creations.” Kirtsaeng, 136 S. Ct. at 1986. 6 Further, as discussed above, an award of attorneys’ fees would deter future infringement. As such, 7 the court finds that a fee award is appropriate in this action. See id. (“[F]ee awards under § 505 8 should encourage the type of lawsuits that promote [the purposes of the Copyright Act].”). 9 Accordingly, the court shall grant Oracle’s motion and issue an award of attorneys’ fees under the 10 Copyright Act.3 11 B. Amount of Fees 12 If a district court determines that an award of attorneys’ fees is warranted under the 13 Copyright Act (or other statutory provision), the court must determine the amount of reasonable 14 fees to award the prevailing party. In its motion, Oracle argues that the court should award 15 $35,627,807.99 in attorneys’ fees to compensate it for the fees it incurred to prosecute this 16 litigation. In determining the reasonableness of an award of attorneys’ fees, a district court 17 considers several non-exclusive factors, including: (1) the reputation and skill of counsel; (2) the 18 financial terms of the client fee arrangement;4 (3) the nature and extent of work performed and 19 /// 20 21 22 23 24 25 3 An award of attorneys’ fees is also available under both the CDAFA and the NCCL. See CAL. PENAL CODE § 502(e)(2) (“In any action brought pursuant to this subdivision the court may award reasonable attorney’s fees.”); NEV. REV. STAT. § 205.4765 (“Any victim of a crime described in NRS 205.473 to 205.513, inclusive, may bring a civil action to recover . . . [c]osts and reasonable attorney’s fees incurred in bringing the civil action.”). Insofar as the court has found that Oracle is entitled to attorneys’ fees under the Copyright Act, the court also finds that attorneys’ fees are warranted under the CDAFA and the NCCL, both of which allow attorneys’ fees under factors less stringent than the Copyright Act. Further, in contrast to an award of fees under the Copyright Act, for which defendant Ravin was not found liable, the court finds that an award of fees under both the CDAFA and the NCCL may be levied against both defendants severally and equally. 4 26 Here it is undisputed that Oracle’s fee arrangements with counsel were hourly rate contracts for work performed in this action and were not contingency fee agreements. 17 1 results obtained; and (4) awards in similar cases. See LR 54-16(b)(3); Resurrection Bay 2 Conservation All. v. City of Seward Alaska, 640 F. 3d 1087, 1095 (9th Cir. 2011). 3 Initially, in determining the amount of fees to award in an action, the court must look to the 4 reasonableness of the rates charged by counsel. Id. Generally, courts determine a reasonable rate 5 for attorneys’ fees based upon “the rates prevailing in that district for similar services by lawyers of 6 reasonably comparable skill, experience and reputation,” irrespective of practice area. Prison Legal 7 News v. Schwarzenegger, 608 F.3d 446, 445 (9th Cir. 2010). However, “the district court may, if 8 circumstances warrant, adjust the lodestar to account for other factors which are not subsumed 9 within it.” Ferland v. Conrad Credit Corp., 224 F.3d 1145, 1149 n.4 (9th Cir. 2001). Those 10 additional non-exclusive factors include: “(1) the time and labor required, (2) the novelty and 11 difficulty of the questions involved, (3) the skill requisite to perform the legal service properly, 12 (4) the preclusion of other employment by the attorney due to acceptance of the case, (5) the 13 customary fee, (6) whether the fee is contingent, (7) time limitations imposed by the client or the 14 circumstances, (8) the amount involved and the results obtained, (9) the experience, reputation, and 15 ability of the attorneys, (10) the ‘undesirability’ of the case, (11) the nature and length of the 16 professional relationship with the client, and (12) awards in similar cases.” Ballen v. City of 17 Redmond, 466 F.3d 736, 746 (9th Cir. 2006). 18 Here, the court finds that the appropriate rates for counsel in this copyright infringement 19 action are the actual rates charged by counsel. “Unless counsel is working outside his or her normal 20 area of practice, evidence that a billing rate was the usual rate the attorney charges for his or her 21 services is evidence that the rate is comparable to the market rate.” Perfect 10, Inc. v. Giganews, 22 Inc., No. 11-07098, 2015 WL 1746484, at *5 (C.D. Cal. Mar. 25, 2015). Further, in an action 23 under the Copyright Act, an award based on the actual rates charged by counsel has consistently 24 been held to be reasonable under 17 U.S.C. § 505. See, e.g., Kourtis v. Cameron, 358 Fed. App’x. 25 863, 868 (9th Cir. 2009). This is because in such complex litigation “the parties can reasonably be 26 expected to retain nationally respected law firms and nationally respected attorneys to pursue their 18 1 interest in the litigation,” which will result in “higher lodestars than normally seen in this district.” 2 Pacquiao v. Mayweather, 2012 WL 4092684, at *2 (D. Nev. 2012) (finding actual rates paid to 3 California attorneys were “reasonable” and awarding them). As such, the court finds that the actual 4 rates Oracle paid its attorneys - as established in the several declarations attached in support of 5 Oracle’s motion - are reasonable rates for this action. 6 Additionally, the reasonableness of the rates charged in this action is confirmed by both 7 parties’ decisions to hire national law firms. Their decisions to hire national firms reflects that the 8 market for legal services for copyright infringement is a national market and that both parties 9 believed only nationally-renowned firms that charged above market rates for this district could 10 handle their cases. Therefore, the court finds that the actual rates charged by counsel in this action 11 are reasonable rates. 12 Now, the issue turns to whether the amount of time billed in this case was reasonable. “[T]o 13 determine whether attorneys for the prevailing party could have reasonably billed the hours they 14 claim to their private clients, the district court should begin with the billing records the prevailing 15 party has submitted.” Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). In its 16 motion, Oracle argues that its billing records reflect a reasonable amount of time spent on this 17 complex litigation, and that it has made conservative adjustments to the hours actually spent by 18 counsel prior to submitting the records. 19 The court has reviewed Oracle’s billing records and finds that Oracle has proffered 20 sufficient evidence for the court to find that most of the time billed by counsel was reasonable for 21 such complex litigation. However, as identified in detail by defendants’ objections to evidence 22 submitted in support of Oracle’s motion,5 Oracle’s billing records do include some inconsistencies 23 24 25 26 5 Along with its opposition, defendants filed two separate objections to evidence submitted in support of Oracle’s motion for attorneys’ fees. ECF Nos. 1005, 1031. Unless and except as specified in the court’s order, the court finds that the evidentiary objections are without merit or go to the weight the court should give the evidence in determining an award of attorneys’ fees, rather than the admissibility of the evidence before the court. 19 1 that violate regular billing practices and guidelines, such as improper block billing entries, though 2 the court does not find Oracle’s billing records nearly as “replete” with errors as defendants 3 contend. See, e.g., Welch v. Metro. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) (“[B]lock 4 billing makes it more difficult to determine how much time was spent on particular activities.”). 5 Rather than identify every instance of a mathematical error, block billing, or missing invoice, the 6 court finds that a blanket reduction of the requested fees in the amount of 20% is appropriate and 7 consistent with other attorneys’ fee awards under similar situations. See, e.g., Huhmann v. FedEx 8 Corp., 2015 WL 6127198, at *8 (S.D. Cal. Oct. 16, 2015) (30% reduction for improper billing 9 entries); eMove, Inc. v. SMD Software, Inc., 2012 WL 4856276, at *7 (D. Ariz. Oct. 11, 2012) 10 (20% reduction for improper billing entries); Gunderson v. Mauna Kea Prop., Inc., 2011 WL 11 9754085, at *10 (D. Haw. May 9, 2011) (20% reduction for improper billing entries). Therefore, 12 reducing Oracle’s request for fees by 20%, Oracle is entitled to recover $28,502,246.40 in 13 attorneys’ fees incurred in this action.6 14 C. Costs 15 As part of its motion for attorneys’ fees, Oracle seeks recovery of both taxable and non- 16 taxable costs. See ECF No. 917. First, Oracle seeks to recover $4,950,566.70 in taxable costs, 17 which includes deposition costs, document recovery and storage, and electronic discovery costs. 18 Under Rule 54(d) of the Federal Rules of Civil Procedure, unless a federal statute or court order 19 provides otherwise, costs should be awarded to the prevailing party. FED. R. CIV. P. 54(d)(1); see 20 also Ass’n of Mexican-Am. Educators v. State of California, 231 F.3d 572, 591 (9th Cir. 2000). 21 22 23 24 25 26 6 Defendants argue that any fee award must be further reduced because Oracle did not achieve a result greater than their pre-trial Rule 68 offers. See Lantz v. Kreider, 2010 WL 2609080, at *5 (D. Nev. 2010) (“The proper course of action with respect to the unaccepted Rule 68 offer of judgment is to preclude plaintiff’s recovery of that portion of fees and costs related to work on the . . . claim after the date of the offer.”). The court disagrees. During the course of this action, Rimini offered Oracle three separate Rule 68 Offers of Judgment. Defendants contend that the second Rule 68 offer for $60 million and the third offer for $100 million are both more favorable than the roughly $52 million obtained at trial. However, the court finds that these offers, which did not include any injunctive relief and proposed payment over several years without interest, were not “more favorable” than the ultimate judgment Oracle obtained in this action. 20 1 The court has reviewed Oracle’s request for taxable costs and finds that they are recoverable and 2 reasonable. See 28 U.S.C. § 1920. Therefore, the court shall award Oracle $4,950,566.70 in taxable 3 costs. 4 Oracle also seeks to recover $17,636,755.68 in non-taxable costs. Section 505 of the 5 Copyright Act permits a successful plaintiff to recover all costs incurred in litigation, not just 6 taxable costs authorized by Rule 54(d) and 28 U.S.C. § 1920. See Twentieth Century Fox Film 7 Corp. v. Entm’t Distrib., 429 F.3d 869, 885 (9th Cir. 2005). Here, Oracle’s request for non-taxable 8 costs includes litigation costs for expert witness fees, additional e-discovery fees not included 9 under 28 U.S.C. § 1920, contract attorney services, jury consulting, and other non-taxable costs. As 10 with Oracle’s request for attorneys’ fees, defendants object to several of the billing records and 11 invoices submitted in support of Oracle’s request. 12 The court has reviewed the documents and pleadings on file in this matter and finds that 13 Oracle is entitled to an award of non-taxable costs in this action for the same reasons the court is 14 awarding attorneys’ fees. However, similar to the award of fees, the court finds that Oracle is 15 entitled to only a reduced amount of fees for various billing issues, including lost or non-validated 16 invoices, vague billing descriptions and vague work entries. Because of these limited errors, the 17 court finds that an overall reduction of 25% for almost all non-taxable costs is warranted. 18 As to defendants’ specific challenge regarding the expert witness fees of Oracle’s damages 19 expert Elizabeth Dean, the court finds that a reduction of 50% of her expert fees and costs is 20 appropriate. The court makes this additional reduction because, prior to trial, Oracle withdrew 21 Dean’s testimony as to one of its two damages theories in response to a motion to exclude by 22 defendants. Thus, at trial, Oracle only presented half of Dean’s prepared testimony. The court finds 23 that it would not be fair or equitable to require defendants to pay for expert witness testimony that 24 was withdrawn in response to their challenge, especially in light of the fact that by that time in the 25 litigation, defendants had already deposed Dean, rebutted her report with an expert of their own, 26 and filed a motion to exclude her report. Defendants should not bear the costs of creating the 21 1 withdrawn portions of Dean’s expert report. Therefore, reducing Oracle’s request for costs by 50% 2 for the expert witness costs of Elizabeth Dean ($1,812,066.02 to $906,033.01) and 25% for the rest 3 of Oracle’s requested non-taxable costs ($15,824,689.66 to $11,868,517.25), the court finds that 4 Oracle is entitled to recover $12,774,550.26 in additional non-taxable costs for this action. 5 Accordingly, the court shall grant Oracle’s motion for attorneys’ fees and costs and award Oracle 6 fees and costs in the amount of $46,227,363.36. 7 IT IS THEREFORE ORDERED that plaintiffs’ motion for a preliminary injunction (ECF 8 No. 900) is GRANTED in-part and DENIED in-part in accordance with this order. Plaintiffs shall 9 have ten (10) days after entry of this order to prepare an appropriate permanent injunction that 10 complies with the court’s order and submit the same for signature. 11 IT IS FURTHER ORDERED that the clerk of court shall enter judgment in favor of 12 plaintiffs Oracle America, Inc. and Oracle International Corporation and against defendants Rimini 13 Street, Inc. and Seth Ravin on plaintiffs’ ninth cause of action for unfair competition in violation of 14 California’s Unfair Competition Law. 15 IT IS FURTHER ORDERED that plaintiffs’ motion for prejudgment interest (ECF No. 16 910) is GRANTED in-part and DENIED in-part in accordance with this order. Plaintiffs shall have 17 ten (10) days after entry of this order to prepare an appropriate order setting prejudgment interest 18 that complies with the court’s order and submit the same for signature. 19 IT IS FURTHER ORDERED that plaintiffs’ motion for attorneys’ fees and costs (ECF No. 20 917) is GRANTED in accordance with this order. The clerk of court shall enter an award of 21 attorneys’ fees and costs in favor of plaintiffs Oracle USA, Inc.; Oracle America, Inc.; and Oracle 22 International Corporation and against defendants Rimini Street, Inc. and Seth Ravin in the amount 23 of $46,227,363.36. 24 IT IS SO ORDERED. 25 DATED this 21st day of September, 2016. 26 22 __________________________________ LARRY R. HICKS UNITED STATES DISTRICT JUDGE

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