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Judge OKs Antitrust Suit Against Oracle Over OS Updates [National Iraqi News Agency (Iraq)](National Iraqi News Agency (Iraq) Via Acquire Media NewsEdge) Oracle Corp. lost a bid Friday to put a quick end to antitrust claims from a bevy of third party technical support firms that say the company's manner of supplying updates for its computer servers and Solaris operating system illegally restricts competition. Sun Microsystems, which first released Solaris in 1992, had routinely permitted businesses to obtain updates, software patches and bug fixes, creating an open market for support services. Oracle ended that policy following its acquisition of Sun in 2010, and began providing updates only to customers who purchased expensive technical support contracts, according to Terix Computer Company Inc., Maintech Inc. and Volt Delta Resources With seeming reluctance, U.S. Magistrate Judge Paul Grewal of the Northern District of California said he was bound to let the companies proceed with allegations that the change constitutes a violation of federal antitrust laws that has allowed Oracle to monopolize the market for Solaris support services. With respect to certain of defendants' tying-related claims, as much as it might struggle to make sense of them under prevailing economic theory, the court nevertheless must defer to the Supreme Court's binding precedent and permit defendants to proceed, Grewal wrote in the 29-page opinion. Later in his ruling, Grewal suggested he has a dim view of the precedent, the Supreme Court's 1992 decision in Eastman Kodak v. Image Technical Services. To say that Kodak has failed to inspire a strong following would be an understatement. Judges and academics have struggled to understand the Supreme Court's underlying economic rationale… he wrote. But whatever its popular reception, Kodak remains the law of the land and this court is bound to apply it. Despite Grewal's sympathies, Oracle now finds itself playing defense in litigation it initiated. Oracle sued Terix and Maintech in July 2013 accusing the IT companies of stealing copyrighted code, patches, updates, and bug fixes for Solaris. Oracle later amended the complaint to add more defendants offering Solaris support services. According to Oracle, the companies either obtained access credentials to Oracle's support website under false pretenses or encouraged Oracle customers to log in and download updates to Solaris unlawfully. The suit survived a motion to dismiss earlier this year. Lawyers for the support companies responded with counterclaims alleging that Oracle was illegally tying Solaris updates to support services, using its copyright monopoly to lock in customers who had previously been free to shop around. The independent service providers contend they could provide less expensive and superior technical support if customers were not dependent on Oracle for updates. This is the epitome of a tied market, wrote lawyers representing Maintech and Volt. Oracle, represented by Bingham McCutchen's Geoffrey Howard and Daniel Wall at Latham & Watkins, argued that the counterclaims fell outside the four-year statute of limitations. But Grewal found that Oracle tolled the statute of limitations by filing its copyright claims in 2013. Oracle also argued that the defendants had not shown a relevant market for their counterclaims. Separating the sale of software patches and updates from the provision of technical support creates distinct markets that exist only in the imaginations of defendants' lawyers, not in the real world, the company's lawyers stated in their motion to dismiss. Grewal disagreed. No matter how common the industry practice of combining up-front license payments and annual support payments, before the Oracle-Sun merger, it is alleged that customers could download updates and firmware for little or no cost, he wrote. While Oracle insists that it never ran an updates business, he continued, the defendants allege that this is exactly what Sun did before the acquisition. Oracle came away Friday with some wins. Grewal dismissed counterclaims for false advertising, copyright misuse and contract interference. He also struck all 87 of the defendants' affirmative defenses to Oracle's copyright infringement claims. He granted the defendants a chance to amend their counterclaims and defenses. Terix is represented by Robinson & Wood, Rimon P.C., and Lardier McNair. GCA Law Partners has represented Maintech and Volt Delta Resources, and in September, lawyers with Durie Tangri entered appearances for the companies. Lawyers for the defendants weren't immediately available Friday. A spokeswoman for Oracle declined to comment. All rights are reserved for National Iraqi News Agency / NINA (c) 2014 Provided by SyndiGate Media Inc. (Syndigate.info). |