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

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

ORACLE USA, INC., a Colorado Nos. 16-16832
corporation; ORACLE AMERICA, INC., 16-16905
a Delaware corporation; ORACLE
INTERNATIONAL CORPORATION, a D.C. No.
California corporation, 2:10-cv-00106-
Plaintiffs-Appellees, LRH-VCF

v.
OPINION
RIMINI STREET, INC., a Nevada
corporation; SETH RAVIN, an
individual,
Defendants-Appellants.

Appeals from the United States District Court
for the District of Nevada
Larry R. Hicks, District Judge, Presiding

Argued and Submitted July 13, 2017
San Francisco, California

Filed January 8, 2018
2 ORACLE USA V. RIMINI STREET

Before: Susan P. Graber and Michelle T. Friedland, Circuit
Judges, and Jeremy D. Fogel, * District Judge.

Opinion by Judge Fogel

SUMMARY **

Copyright

The panel affirmed in part, reversed in part, and vacated
in part the district court’s judgment after a jury trial in favor
of Oracle USA, Inc., on its copyright infringement and
California and Nevada state law claims against Rimini
Street, Inc., a provider of third-party support for Oracle’s
enterprise software, and Seth Ravin, Rimini’s CEO.

Oracle licenses its software and also sells its licensees
maintenance contracts. The maintenance work includes
software updates. In order to compete effectively with
Oracle’s direct maintenance services, Rimini needed to
provide software updates to its customers. With Oracle’s
knowledge, Rimini copied Oracle’s copyrighted software in
order to provide the updates. Rimini obtained software from
Oracle’s website with automated downloading tools in direct
contravention of the terms of the website.

The panel affirmed the district court’s partial summary
judgment and partial judgment after trial on Oracle’s claims

*
The Honorable Jeremy D. Fogel, United States District Judge for
the Northern District of California, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
 ORACLE USA V. RIMINI STREET 3

that Rimini infringed its copyright by copying under the
license of one customer for work performed for other
existing customers or for unknown or future customers,
rather than restricting such copying to work for that
particular customer. The panel concluded that Rimini’s
activities were not permissible under the terms of the
licenses Oracle granted to its customers. The panel rejected
Rimini’s argument that holding it accountable for its alleged
conduct would condone misuse of Oracle’s copyright.

The panel reversed the district court’s judgment after
trial with respect to Oracle’s claims under the California
Comprehensive Data Access and Fraud Act, the Nevada
Computer Crimes Law, and California’s Unfair Competition
Law. The panel held that taking data from a website, using
a method prohibited by the applicable terms of use, when the
taking itself generally is permitted, does not violate the
CDAFA or the NCCL. Accordingly, Rimini did not violate
these computer abuse statutes by using automated tools to
take data in direct contravention of Oracle’s terms of use.
Because the district court granted judgment in favor of
Oracle on Oracle’s Unfair Competition Law claim based on
its finding that Rimini violated the CDAFA, the panel
reversed the district court’s determination that Rimini
violated California’s Unfair Competition Law.

The panel reduced the district court’s award of damages
by the amount based on Rimini’s alleged violation of the
CDAFA and NCCL. The panel affirmed the district court’s
award of prejudgment interest on the copyright claims.

The panel reversed the district court’s permanent
injunction based on alleged violations of the CDAFA. The
panel vacated the district court’s permanent injunction based
on copyright infringement because the district court assessed
the relevant factors by reference to both the copyright and
4 ORACLE USA V. RIMINI STREET

the CDAFA claims, without considering separately the
propriety of issuing an injunction as to the copyright claims
alone.

The panel reversed the district court’s judgment with
respect to Ravin’s liability for attorneys’ fees. As to Rimini,
the panel vacated the fee award and remanded for
reconsideration in light of Oracle’s more limited success at
litigation in view of the panel’s conclusion that there was no
violation of the state computer laws.

The panel reduced the district court’s award of taxable
costs and affirmed its award of non-taxable costs.

COUNSEL

Mark A. Perry (argued) and Jeremy M. Christiansen, Gibson
Dunn & Crutcher LLP, Washington, D.C.; Blaine H.
Evanson, Joseph A. Gorman, and Joseph C. Hansen, Gibson
Dunn & Crutcher LLP, Los Angeles, California; for
Defendants-Appellants.

Paul D. Clement (argued), Erin E. Murphy, and Matthew D.
Rowen, Kirkland & Ellis LLP, Washington, D.C.; William
A. Isaacson and Karen L. Dunn, Boies Schiller & Flexner
LLP, Washington, D.C.; Thomas S. Hixson and John A.
Polito, Morgan Lewis & Bockius LLP, San Francisco,
California; David B. Salmons, Morgan Lewis & Bockius
LLP, Washington, D.C.; for Plaintiffs-Appellees.

Jamie Williams and Aileen Nguyen, San Francisco,
California, as and for Amicus Curiae Electronic Frontier
Foundation.
 ORACLE USA V. RIMINI STREET 5

OPINION

FOGEL, District Judge:

Oracle USA, Inc. and related entities (collectively,
“Oracle”) licenses its proprietary enterprise software for a
substantial one-time payment. Oracle also sells its licensees
maintenance contracts for the software that are renewed on
an annual basis. The maintenance work includes software
updates, which Oracle makes available to purchasers of the
contracts through its support website.

At all relevant times, Rimini Street, Inc. (“Rimini’)
provided third-party support for Oracle’s enterprise
software, in lawful competition with Oracle’s direct
maintenance services. But in order to compete effectively,
Rimini also needed to provide software updates to its
customers. 1 Creating these software updates inherently
required copying Oracle’s copyrighted software, which,
unless allowed by license, would be copyright infringement.
With Oracle’s knowledge, Rimini in fact did copy the
software to provide the updates. At least from late 2006 to
early 2007, Rimini obtained software from Oracle’s website
with automated downloading tools in direct contravention of
the terms of use of the website.

Oracle filed suit against Rimini and Rimini’s CEO, Seth
Ravin (“Ravin”), in the District of Nevada in 2010. After
lengthy and sometimes contentious discovery and motion

1
All of Rimini’s customers pertinent to this dispute were licensees
of Oracle’s software, but not all licensees of Oracle’s software are
Rimini’s customers. To avoid confusion, we will use the word
“customers” to refer to the subset of Oracle’s licensees who did contract
or might contract with Rimini for the maintenance of Oracle’s software.
6 ORACLE USA V. RIMINI STREET

practice, the district court granted partial summary judgment
to Oracle on certain aspects of Oracle’s copyright
infringement claim, and a jury found in favor of Oracle on
others after trial. The jury also found against both Rimini and
Ravin with respect to Oracle’s claims under the California
Comprehensive Data Access and Fraud Act (“CDAFA”) and
the Nevada Computer Crimes Law (“NCCL”) (collectively,
the “state computer laws”). Based on the jury’s
determination with respect to the CDAFA claim, the district
court entered judgment against Rimini and Ravin under
California’s Unfair Competition Law (“UCL”). The jury
awarded damages in the sum of $50,027,000 which, when
prejudgment interest, attorneys’ fees and costs were added,
resulted in a total monetary judgment of $124,291,396.82.
The district court also issued an extensive permanent
injunction. Rimini subsequently filed this timely appeal. The
Electronic Frontier Foundation (“EFF”) has filed an amicus
brief with respect to the state computer law claims.

The first principal dispute in this case is whether Rimini
copied Oracle’s software in a manner that infringed Oracle’s
copyright. It is undisputed that Rimini used Oracle’s
software to develop and test updates for its customers and
that the software licenses, with certain restrictions, permitted
Oracle’s licensees to hire Rimini to perform such work for
them. There are numerous subtleties involved but, at the
highest level of generality, Rimini’s alleged copyright
infringement included copying under the license of one
customer for work for other existing customers or for
unknown or future customers, rather than restricting such
copying to work for that particular customer. The second
principal dispute is whether Rimini and Ravin violated
applicable state laws intended to prevent computer-based
fraud by flouting Oracle’s restrictions against the use of
automated tools to download software from its website. We
 ORACLE USA V. RIMINI STREET 7

also consider the appropriateness of the remedies awarded
by the district court.

As explained below, we affirm the judgment with respect
to the copyright infringement claims. We also affirm the
remedies with respect to those claims, except that we vacate
the injunction and the award of attorneys’ fees and remand
for reconsideration in light of this opinion. We modify the
district court’s award of taxable costs as the parties have
agreed. We reverse the judgment with respect to Oracle’s
claims under the state computer laws and the UCL.

Copyright Infringement Claims

The Software in Suit 2

Four software products are at issue: J.D. Edwards,
Siebel, PeopleSoft, and Database. The products are related,
but they do not perform identical functions. As the district
court explained:

Oracle’s Enterprise Software platforms have
both an installed database component and an
installed application component. The
database component provides a foundation
for the application software which then uses,
stores, and retrieves data in the database for
use across an entire organization. Oracle’s
Enterprise Software application programs—
including its PeopleSoft, J.D. Edwards, and
Siebel-branded products—are run on

2
The district court specifically distinguished between Oracle’s
copyright in software and Oracle’s copyright in the software
documentation. Rimini does not appeal the jury’s determination that
Rimini infringed the documentation copyright.
8 ORACLE USA V. RIMINI STREET

Oracle’s Relational Database Management
Software (“Oracle Database”) as the database
component for the programs.

Oracle USA, Inc. v. Rimini St., Inc., 6 F. Supp. 3d 1108, 1113
(D. Nev. 2014) (“Oracle II”). J.D. Edwards, Siebel, and
PeopleSoft were acquired by Oracle from other companies,
while Oracle developed Database internally.

Because of this history and because of the technical
differences among them, the licensing terms of the four
products are not identical. We first address J.D. Edwards and
Siebel. We next turn to PeopleSoft and, finally, to Database.

J.D. Edwards and Siebel

Oracle’s claims as to the J.D. Edwards and Siebel
software were submitted to the jury. Rimini appeals the
district court’s denial of its motion for judgment as a matter
of law following the jury’s verdict. “We review de novo the
district court’s denial of a motion for judgment as a matter
of law. A renewed motion for judgment as a matter of law is
properly granted only ‘if the evidence, construed in the light
most favorable to the nonmoving party, permits only one
reasonable conclusion, and that conclusion is contrary to the
jury’s verdict.” Castro v. Cty. of Los Angeles, 833 F.3d
1060, 1066 (9th Cir. 2016) (en banc) (citations omitted)
(quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002))
(internal quotation mark omitted), cert. denied, 137 S. Ct.
831 (2017). “A jury’s verdict must be upheld if it is
supported by substantial evidence, which is evidence
adequate to support the jury’s conclusion, even if it is also
possible to draw a contrary conclusion.” Id. (quoting Pavao,
307 F.3d at 918) (internal quotation marks omitted).
 ORACLE USA V. RIMINI STREET 9

Rimini challenges the jury’s finding of copyright
infringement with respect to these products on two grounds.
First, it argues that its activities were permissible under the
terms of the licenses Oracle granted to its customers.
Second, it contends that holding it accountable for its alleged
conduct would condone copyright misuse. Neither of these
arguments is persuasive.

1. Express License Defense

As will be explained in further detail, there is no dispute
that, absent an applicable license, Rimini’s accused acts
violated the exclusive right Oracle enjoys as owner of the
software copyright to copy or to modify the software. Rimini
asserts as an affirmative defense that its accused acts were
expressly licensed.

The Supreme Court has explained the express license
defense as follows:

“Anyone who violates any of the exclusive
rights of the copyright owner,” that is, anyone
who trespasses into his exclusive domain by
using or authorizing the use of the
copyrighted work in one of the five ways set
forth in the statute, “is an infringer of the
copyright.” Conversely, anyone who is
authorized by the copyright owner to use the
copyrighted work in a way specified in the
statute . . . is not an infringer of the copyright
with respect to such use.”

Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S.
417, 433 (1984) (quoting 17 U.S.C. § 501(a)). Thus, “[t]he
existence of a license creates an affirmative defense to a
claim of copyright infringement.” Worldwide Church of God
10 ORACLE USA V. RIMINI STREET

v. Phila. Church of God, Inc., 227 F.3d 1110, 1114 (9th Cir.
2000). However, “[w]hen a licensee exceeds the scope of the
license granted by the copyright holder, the licensee is liable
for infringement.” LGS Architects, Inc. v. Concordia Homes
of Nev., 434 F.3d 1150, 1156 (9th Cir. 2006).

As Rimini itself did not have a license to copy or to
modify from Oracle, the success of Rimini’s affirmative
defense turns on whether Rimini’s accused acts came within
the scope of licenses held by its customers.

a) Software Licenses

The pertinent provisions of the J.D. Edwards and Siebel
licenses are excerpted below:

Software License Language
J.D. “Customer shall not, or cause anyone else
Edwards to . . . (iii) copy the Documentation or
Software except to the extent necessary for
Customer’s archival needs and to support
the Users.”
Siebel “Customer” may “reproduce, exactly as
provided by [Oracle], a reasonable number
of copies of the Programs and the Ancillary
Programs solely for archive or emergency
back-up purposes or disaster recovery and
related testing.”

Like the language of the licenses themselves, the district
court’s constructions of the two licenses when instructing the
jury were similar.

The district court told the jury that it was permissible for
Rimini, as a third-party, to make copies of the Oracle
software to support its customers by archiving, backup, and
 ORACLE USA V. RIMINI STREET 11

related testing. At the same time, the district court instructed
that the licenses “do[] not mean that a third party like Rimini
Street is authorized to make copies of the . . . software
application . . . to use the customer’s software . . . to support
other customers.”

b) Accused Acts

(1) Background

Work produced by humans is rarely if ever perfect, and
computer software is no exception. Even casual users of
computers are familiar with regular software patches and
updates intended to correct glitches and to modify software
in light of changing circumstances.

However, unlike the off-the-shelf consumer software
used by individuals in everyday life, enterprise software
employed by large organizations is customized around the
organizations’ specific needs. While producers of consumer
software generally design updates around standard use cases
and make them available for end users to download and
install directly, updates to enterprise software must be tested
and modified to fit with bespoke customizations before
being put to actual use.

This testing process requires the creation of
“development environments.” A “development
environment,” sometimes called a “sandbox,” is distinct
from a “production environment,” which is the “live”
version of the software that members of the enterprise
ultimately deploy. As the district court explained:

In order to develop and test software updates
for Enterprise Software, support service
providers ... create development
12 ORACLE USA V. RIMINI STREET

environments of the software. A
development environment is a software
environment that contains a copy of the
software program which is then modified to
develop and test software updates. Given the
critical nature of Enterprise Software
programs, updates to the software must be
fully tested and verified in a development
environment before they are provided to a
customer.

Oracle USA, Inc. v. Rimini St., Inc., 6 F. Supp. 3d 1086, 1092
n.4 (D. Nev. 2014) (“Oracle I”).

In other words, the very work of maintaining customized
software requires copying the software, which without a
license to do so is a violation of the exclusive right of the
copyright owner. Here, it is undisputed that the licenses
generally permit Oracle’s licensees to maintain the software
and make development environments for themselves.
However, some licensees of the software, lacking either the
capability or the interest, opt to outsource the work of
maintenance to others, such as Rimini or even Oracle itself.

(2) “Direct Use” and “Cross Use”

Oracle alleges that Rimini engaged in two distinct types
of copyright infringement with respect to J.D. Edwards and
Siebel. The first has to do with the way it created
development environments, under color of a license held by
these particular, identifiable customers of Rimini, for that
specific customer. We refer to this as “direct use.”
 ORACLE USA V. RIMINI STREET 13

The second is “cross use.” 3 “Cross use,” generally
speaking, is the creation of development environments,
under color of a license of one customer, to support other
customers. There are numerous forms of “cross use.” In its
narrowest form, “cross use” is the making of development
environments, under color of a license held by one
identifiable customer of Rimini, for another identifiable
customer of Rimini that also holds a license. It also may
include the creation of development environments under a
given license for other customers of Rimini that may
themselves hold licenses or even for licensees who have yet
to become customers of Rimini. Rimini claims that “cross
use” is not infringement, arguing that it may create
environments without restriction because any organization
that might hire Rimini to service its software would itself
have a license to create development environments. Rimini’s
counsel explained at oral argument that “cross use” enabled
it to reduce expense by reusing work it had done for one
customer in providing service to others.

c) Analysis

Rimini argues on appeal that the jury instructions were
erroneous because they suggested that certain direct uses and
cross uses were prohibited while Rimini believes they were
permitted.

With respect to “direct use,” we may dispose quickly of
Rimini’s claim that the district court construed “direct use”
out of the licenses. Rimini successfully persuaded the district
3
Rimini offered this description of its “cross use” in its closing
statement to the jury: “If we have multiple clients with the exact same
release, the same rights, we would come up with one fix and then apply
it to other customers that had the exact same rights. That’s the cross-use,
the reusing of updates that you’ve heard about in this case.”
14 ORACLE USA V. RIMINI STREET

court to include the language, “to support the customer’s
use,” in its jury instruction about the J.D. Edwards license.
The instruction concerning Siebel told the jury specifically
that Rimini could hold copies of the Siebel software
application “solely for customer’s archive or emergency
back-up purposes or disaster recovery and related testing.”
Rimini did not object to that instruction at trial, and, contrary
to Rimini’s arguments on appeal, those instructions treated
these forms of direct use as permitted.

Rimini also argues, however, that the instructions should
have approved expressly of other forms of direct use. The
district court had no reason or need to instruct the jury that
the licenses permitted other types of direct use, because, as
the district court’s order shows, Rimini had represented that
the only forms of direct use it engaged in were those allowed
by the instruction:

Rimini has proffered evidence that the
development environments associated with
[specific Siebel licensee] are used
exclusively for archival and back-up
purposes, and related testing, as directly
contemplated by [the license].

Oracle I, 6 F. Supp. 3d at 1105 n.20; see also id. at 1103
(similar findings concerning J.D. Edwards). Had Rimini
wanted a broader construction, Rimini should have said so
in district court. Having failed to do that, Rimini cannot
complain that the jury found that Rimini’s direct use with
respect to J.D. Edwards and Siebel exceeded the scope of the
licenses.

With respect to “cross use,” Rimini’s assertion—made
for the first time in its reply brief to us—that “cross use” is
a contractual rather than a copyright issue is not properly
 ORACLE USA V. RIMINI STREET 15

before us. The principal case on which Rimini relies, MDY
Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d
928 (9th Cir. 2011), was not cited in Rimini’s opening brief,
and “on appeal, arguments not raised by a party in its
opening brief are deemed waived,” Smith v. Marsh, 194 F.3d
1045, 1052 (9th Cir. 1999). 4

As to the substance of its position, Rimini argues that,
contrary to the jury instructions, the licenses in fact permit
“cross use.” It observes that: 1) each of Rimini’s customers
had its own license; 2) each license permits copies to be
made for archival and support purposes; 3) the licenses
authorize the customers to outsource the archival and
support work to third parties; and 4) such archival and
support work includes the creation of development
environments. Rimini dismisses evidence showing that it
created development environments for future customers
using the license of an existing customer on the basis that
future customers presumably would have licenses that would
permit them to hire Rimini to create development
environments.

Oracle properly responds that each of the licenses at
issue here “pointedly limits copying and use to supporting
the ‘Licensee.’” The licenses do not authorize Rimini to
“develop products Rimini could sell for Rimini’s financial
gain.” Any work that Rimini performs under color of a
license held by a customer for other existing customers
cannot be considered work in support of that particular
4
Even if we were to consider the applicability of MDY Industries,
that case teaches specifically the distinction between “conditions,” “the
breach of which constitute copyright infringement,” and “covenants,”
“the breach of which is actionable only under contract law.” 629 F.3d at
939. Rimini has offered no analysis as to which terms of the licenses at
issue are “conditions” and which are “covenants.”
16 ORACLE USA V. RIMINI STREET

customer. The same logic applies to work Rimini performs
for unknown, future customers. The licensees may hire a
third party such as Rimini to maintain their software for
them, but nothing in the licenses permits them to grant a non-
party to the license a general right to copy proprietary
software.

2. Copyright Misuse

We turn next to the question of copyright misuse, which
Rimini asserts as a defense. The copyright misuse doctrine
prevents holders of copyrights “from leveraging their limited
monopoly to allow them control of areas outside the
monopoly.” Apple Inc. v. Psystar Corp., 658 F.3d 1150,
1157 (9th Cir. 2011). (quoting A&M Records v. Napster,
Inc., 239 F.3d 1004, 1026 (9th Cir. 2001)) (internal quotation
marks omitted). To that end, while it “does prevent copyright
holders from using the conditions to stifle competition,”
“[t]he copyright misuse doctrine does not prohibit using
conditions to control use of copyrighted material.” Id. at
1159. Accordingly, the doctrine is to be “applied . . .
sparingly”; specifically, it operates when copyright holders
attempt to impose license agreements that would “prevent[]
. . . licensee[s] from using any other competing product.” Id.
at 1157 (emphasis added).

Rimini claims that holding it liable for copyright
infringement would condone misuse of Oracle’s copyright.
In Rimini’s view, the district court’s pretrial construction of
the licensing terms, as embodied in the jury instructions,
“would foreclose competition in the aftermarket for third-
party maintenance” because it would limit copies made by
third parties to those made only for archival and emergency
backup purposes and because the software could not be
serviced simply by making exact copies. Oracle counters
that the licenses “plainly do not preclude third parties from
 ORACLE USA V. RIMINI STREET 17

developing competing software or providing competing
support services,” but instead “require third parties to do so
in ways that do not disregard Oracle’s exclusive rights under
copyright law.”

We agree with Oracle. The district court did not construe
the licenses to permit only archival and emergency backup
purposes. For example, the jury instructions as to J.D.
Edwards stated specifically:

If you find that the copies of the J.D. Edwards
software application . . . housed on Rimini
Street’s servers were used solely for the
customer’s archival needs and to support the
customer’s use, then that use is authorized by
the J.D. Edwards software license agreement
....

The district court gave similar instructions as to Siebel.
(“[Y]ou are informed that the court has ruled as a matter of
law that the Siebel software license agreements authorized
. . . Rimini Street to make a reasonable number of copies . . .
solely for the customer’s archive or emergency back-up
purposes or disaster recovery and related testing.”
(emphasis added)). These constructions would not preclude
Rimini from creating development environments for a
licensee for various purposes after that licensee has become
a customer of Rimini.

The only remaining question is whether it would be
copyright misuse to forbid Rimini from creating
development environments for licensees before they have
become customers or, in other words, whether it would
contravene the policy of the Copyright Act to allow Oracle,
as a copyright holder, to have a head start in making copies.
The Supreme Court has held that “the right of first
18 ORACLE USA V. RIMINI STREET

publication” is “an important marketable subsidiary right.”
Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S.
539, 549 (1985). Just as a copyright holder has the “right of
first publication,” it also must enjoy the right of “first copy.”
Giving a head start to Oracle in creating development
environments is entirely consistent with the Supreme
Court’s teaching in Harper.

PeopleSoft

The district court granted summary judgment on
Oracle’s copyright claim with respect to PeopleSoft. “This
Court reviews a district court’s grant of summary judgment
de novo. The Court must ‘determine whether, viewing the
evidence in the light most favorable to the nonmoving party,
there are any genuine issues of material fact and whether the
district court correctly applied the relevant substantive
law.’” Mitchell v. Washington, 818 F.3d 436, 441–42 (9th
Cir. 2016) (quoting Lopez v. Smith, 203 F.3d 1122, 1131 (9th
Cir. 2000) (en banc)).

Rimini again asserts an express license defense and
contends that it would be copyright misuse to hold it liable
for infringement. Again, its arguments are without merit.

1. Express License Defense

The PeopleSoft license is similar to its J.D. Edwards and
Siebel counterparts, but it contains an additional limitation
about “[the licensee’s] facilities”:
 ORACLE USA V. RIMINI STREET 19

Software License Language
PeopleSoft 5 “Licensee may . . . make a reasonable
number of copies of the Software, solely
for: (i) use in accordance with the terms
set forth herein . . . ; (ii) archive or
emergency back-up purposes; and/or
(iii) disaster recovery testing purposes[.]”
“PeopleSoft grants Licensee a . . . license
to use the licensed Software, solely for
Licensee’s internal data processing
operations at its facilities[.]”

Based on this limitation, the district court construed the
PeopleSoft license more restrictively than the J.D. Edwards
and Siebel licenses. Specifically, it stated that “[the
PeopleSoft license] expressly limits copying the licensed
software to only the [licensee’s] facilities.” Oracle I, 6 F.
Supp. at 1097 (emphasis omitted).

Because of the difference in the construction of the
pertinent licenses, the nature of Oracle’s claim concerning
PeopleSoft is somewhat different in character from those
concerning J.D. Edwards and Siebel. Specifically, the
accused act concerning PeopleSoft is the creation of
development environments, whether for “direct use” or
“cross use,” on Rimini’s own computers, as opposed to the
licensees’ computers. Rimini describes this practice as “local

5
Two different PeopleSoft licenses are at issue here, one belonging
to the City of Flint and the other to the Pittsburgh Public Schools. The
district court concluded that the two licenses have “similar” language.
Oracle I, 6 F. Supp. 3d at 1100. On appeal, the parties make no
distinction between the two licenses; the language discussed here is
drawn from the license held by the City of Flint.
20 ORACLE USA V. RIMINI STREET

hosting,” a term that we adopt in this opinion. Rimini asserts
that it does this to avoid transmission delays.

In the words of the district court, “it is undisputed that
Rimini made copies of the licensed software at its own
facilities and outside the control of the [customers].” Id. at
1101 (emphasis added). The district court concluded that the
PeopleSoft licenses of Rimini’s customers “do[] not
authorize Rimini’s off-site copies of the licensed software,”
and therefore granted summary judgment to Oracle on the
copyright infringement claims as to PeopleSoft. Id. at 1097.

On appeal, Rimini contends that “[a licensee’s]
facilities” can span Rimini’s own servers. In its words:

Sophisticated companies like Oracle’s
customers (and Rimini’s clients) do not keep
all their servers on the actual premises of their
principal place of business . . . . They may
own some, lease others, and contract with
third parties for still more capacity. All are
encompassed within the plain meaning of
“facilities.”

We agree with Oracle that “facilities under the control of
a third party” could not qualify as “the licensee’s facilities.”
It was not only sensible but also necessary for the district
court to read a requirement of “control” into the definition of
“[a licensee’s] facilities.” The record supports the district
court’s conclusion that the Rimini servers where the copying
took place were “outside the control of the [customers].” Id.
 ORACLE USA V. RIMINI STREET 21

at 1101. Indeed, Rimini made no showing that its customers
had even constructive control of the servers. 6

2. Copyright Misuse

As just explained, the district court concluded that
Rimini infringed the PeopleSoft copyright by “local
hosting,” that is, by maintaining copies of PeopleSoft on its
own computers as opposed to its customers’ computers.
Oracle I, 6 F. Supp. 3d at 1097. Rimini offers no argument
as to why a restriction on the location of copies would stifle
competition and run afoul of the copyright misuse doctrine.
Id. Rimini’s inability to “local host” may result in
inconvenience and expense on its part, but that restriction on
its conduct does not amount to copyright misuse. Indeed, at
oral argument, Rimini admitted that the restriction against
“local hosting” was one it could overcome.

Database

The district court also granted summary judgment for
Oracle on the Database copyright infringement claim. It was
undisputed that Rimini copied Oracle’s copyright protected
software when it built development, or non-production,
environments for a number of Rimini customers using
Oracle Database.

Rimini’s arguments on appeal with respect to Database
are the same as those with respect to the other software at
issue, except that here Rimini contends that its acts in fact
were authorized by the Oracle License and Service
Agreements (“OLSAs”). Oracle properly points out that
6
Because we address the question of infringement as to PeopleSoft
on the narrow ground of “local hosting,” we do not decide whether
“direct use” or “cross use” was permitted by the PeopleSoft license.
22 ORACLE USA V. RIMINI STREET

Rimini has waived this point because it has failed to
challenge the district court’s legal conclusion that Rimini
was not entitled to assert the OLSAs as a defense.
Accordingly, we affirm the district court’s determination of
copyright infringement as to Database.

State Computer Law Claims

The CDAFA and the NCCL

The CDAFA is California’s computer abuse law. It
states, in relevant part, that:

any person who commits any of the following
acts is guilty of a public offense:

....

(2) Knowingly accesses and without
permission takes, copies, or makes use of any
data from a computer, computer system, or
computer network, or takes or copies any
supporting documentation, whether existing
or residing internal or external to a computer,
computer system, or computer network.

(3) Knowingly and without permission uses
or causes to be used computer services.

CAL. PENAL CODE § 502(c). It provides a cause of action to
“the owner or lessee of the computer, computer system,
computer network, computer program, or data who suffers
damage or loss by reason of a violation.” Id. § 502(e)(1).

The NCCL is Nevada’s counterpart to the CDAFA. In
relevant part, it provides that “a person who knowingly,
 ORACLE USA V. RIMINI STREET 23

willfully and without authorization: (a) Modifies;
(b) Damages; (c) Destroys; (d) Discloses; (e) Uses;
(f) Transfers; (g) Conceals; (h) Takes; (i) Retains possession
of; (j) Copies; (k) Obtains or attempts to obtain access to,
permits access to or causes to be accessed; or (l) Enters data,
a program or any supporting documents which exist inside
or outside a computer, system or network” or “who
knowingly, willfully and without authorization:
(a) Destroys; (b) Damages; (c) Takes; (d) Alters;
(e) Transfers; (f) Discloses; (g) Conceals; (h) Copies;
(i) Uses; (j) Retains possession of; or (k) Obtains or attempts
to obtain access to, permits access to or causes to be
accessed, a computer, system or network” is guilty of a
misdemeanor. NEV. REV. STAT. § 205.4761(1), (3). The
NCCL also provides a civil cause of action to “[a]ny victim
of [such a misdemeanor].” Id. § 205.511(1).

Accused Acts

The ultimate question as to whether Rimini and Ravin
(referred to collectively in this section as “Rimini”) violated
the state computer laws by downloading content from
Oracle’s website was submitted to the jury, which found in
favor of Oracle. In denying Rimini’s renewed motion for
judgment as a matter of law, the district court observed that
Oracle had for some time “encouraged its customers to use
automated downloading tools as a means to obtain” large
numbers of customer support files in a timely manner.
Oracle USA, Inc. v. Rimini St., Inc., 191 F. Supp. 3d 1134,
1139 (D. Nev. 2016) (“Oracle III”). Rimini had been doing
just that when, “in response to an increased volume of mass
downloads through the use of automated tools, and other
server and database pressures, Oracle America changed its
website’s Terms of Use to specifically prohibit the use of
‘any software routines commonly known as robots, spiders,
24 ORACLE USA V. RIMINI STREET

scrapers, or any other automated means to access [the site]
or any other Oracle accounts, systems or networks,” a
change which “prohibited the use of previously allowed
automated downloading tools.” Id. at 1139–40 (alteration in
original). The evidence showed that, in response, Rimini
stopped using automatic downloading tools for about a year
but then “began reusing automated tools on the website in
violation of the Terms of Use (terms which it had to
specifically agree to when logging on to the website) in order
to download full libraries of support documents and files for
entire software products lines—each involving hundreds of
thousands of different files.” Id. at 1140.

Positions of the Parties

Rimini and EFF contend that the statutory language
“without permission” should not be read in a way that
criminalizes violation of a website’s terms of use. As EFF
puts it, “[n]either statute . . . applies to bare violations of a
website’s terms of use—such as when a computer user has
permission and authorization to access and use the computer
or data at issue, but simply accesses or uses the information
in a manner the website owner does not like.”

Oracle, on the other hand, urges us to read the state
statutes as not requiring unauthorized access for a violation,
which appears to be how the district court construed them.
See id. at 1143–44 (holding that Rimini’s “claim that they
had permission from their clients to access Oracle[’s] . . .
website is irrelevant” under the state statutes).

Analysis

We review the denial of Rimini’s motion for judgment
as a matter of law de novo. Castro v. Cty. of Los Angeles,
833 F.3d 1060, 1066 (9th Cir. 2016) (en banc).
 ORACLE USA V. RIMINI STREET 25

The district court treated the two statutes as essentially
identical, and for purposes of this appeal, we will take the
CDAFA as representative. As the district court observed,
“[w]hile the case law on the NCCL is limited, the statute
covers the same conduct as the CDAFA and the same legal
reasoning should apply.” Oracle III, 191 F. Supp. 3d at 1144.
The parties appear to agree with this approach; indeed, their
arguments about liability do not differentiate between the
two statutory schemes.

Here, there is no question that Rimini “t[ook]” and
“m[ade] use of” “data.” See Oracle III, 191 F. Supp. 3d at
1143 (“Nor do defendants contest that they took and
subsequently used data from the website . . . .”). Nor is there
any dispute that Oracle permitted some degree of access and
taking from its website. Id. at 1139–40. (“[Oracle America]
owns and operates a website that . . . contains millions of
technical support files . . . . [T]his online database was
accessible through a website that required both the
customer’s unique [login] and acceptance of the website’s
specific Terms of Use.” (footnote omitted)). The central
issue here is whether, by using automated tools to take data
in direct contravention of Oracle’s terms of use, Rimini
violated the statutes.

We hold that taking data using a method prohibited by
the applicable terms of use, when the taking itself generally
is permitted, does not violate the CDAFA. Because the same
reasoning applies to the NCCL claim, we reverse the
judgment as to both claims.

Oracle obviously disapproved of the method—
automated downloading—by which Rimini took Oracle’s
proprietary information. But the key to the state statutes is
whether Rimini was authorized in the first instance to take
and use the information that it downloaded. See United
26 ORACLE USA V. RIMINI STREET

States v. Christensen, 828 F.3d 763, 789 (9th Cir. 2015)
(emphasis added) (“A plain reading of the [CDAFA]
demonstrates that its focus is on unauthorized taking or use
of information.”).

Because it indisputably had such authorization, at least
at the time it took the data in the first instance, Rimini did
not violate the state statutes. This result is consistent with
our decision in Facebook, Inc. v. Power Ventures, Inc.,
844 F.3d 1058, 1069 (9th Cir. 2016), cert. denied, 138 S. Ct.
313 (2017) (affirming the district court’s holding that the
defendant violated the CDAFA on the ground that the
defendant “without permission took, copied, and made use
of [the downloaded] data” (emphasis added)).

Violation of California’s Unfair Competition Law

A violation of California’s UCL occurs where there is a
predicate offense, one of which is a violation of the CDAFA.
CAL. BUS. & PROF. CODE § 17200. The district court granted
judgment in favor of Oracle on its UCL claim based on its
finding that Rimini and Ravin had violated the CDAFA.
Because we reverse as to the CDAFA claim, we also reverse
the district court’s determination that Rimini and Ravin
violated the UCL.

Damages 7

The jury awarded a total of $14,427,000 to two Oracle
subsidiaries based on Rimini’s alleged violation of the
CDAFA and NCCL. Because we have concluded that

7
Rimini does not challenge the amount of the jury’s award of
$35,600,000 in damages for copyright infringement.
 ORACLE USA V. RIMINI STREET 27

Rimini did not violate those laws, we reduce damages by this
amount.

Prejudgment Interest

We review a district court’s decision to award
prejudgment interest for abuse of discretion. Barnard v.
Theobald, 721 F.3d 1069, 1075 (9th Cir. 2013). We also
review the rate used by the district court to calculate the
prejudgment interest for abuse of discretion. Blankenship v.
Liberty Life Assurance Co. of Bos., 486 F.3d 620, 628 (9th
Cir. 2007).

The district court awarded $22,491,636.16 in
prejudgment interest on the copyright claims and
$5,279,060.12 in prejudgment interest on the NCCL claims.
Because we have concluded that Rimini did not violate the
NCCL, we reverse as to the latter amount. For the reasons
discussed below, we affirm as to the former.

We have held that “[g]enerally, ‘the interest rate
prescribed for post-judgment interest under 28 U.S.C.
§ 1961 is appropriate for fixing the rate of pre-judgment
interest unless the trial judge finds, on substantial evidence,
that the equities of that particular case require a different
rate.’” Blankenship, 486 F.3d at 628 (quoting Grosz-
Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1164
(9th Cir. 2001)).

The district court calculated its award of $22,491,636.16
based upon the Treasury rate on the date infringement began,
that is, 5.07% in October 2006, rather than on the “starting
point” set forth in 28 U.S.C. § 1961, that is, 0.61% in
October 2016. The district court explained its deviation from
the normal rate, which resulted in a difference of
approximately $20,000,000, as follows:
28 ORACLE USA V. RIMINI STREET

[T]he court finds that there is good cause to
set the prejudgment interest rate at the
Treasury rate on the date infringement began,
rather than at the time of judgment. The court
makes this finding because of the nature of
the jury’s award of hypothetical license
damages. As the jury awarded damages to
Oracle in an amount it would have received
from Rimini for licensing Oracle’s software
at the time it began infringing Oracle’s
copyrights in late 2006, the court finds that
this is the relevant time period for
prejudgment interest. After this date, when
Rimini began infringing Oracle’s copyrights,
Oracle lost out on the licensing fees it would
have received, absent infringement. It is not
equitable in the court’s view to allow
defendants to reap a windfall by the lower
interest rates that are now available simply
because they engaged in discovery delays
and other litigation tactics (addressed more
thoroughly in Oracle’s motion for attorneys’
fees) that kept this action in litigation for
several years. Therefore, the court shall . . .
set the appropriate rate for prejudgment
interest under the Copyright Act as the
weekly average one-year constant maturity
Treasury yield at the start of the
infringement.

Despite these specific findings, Rimini asserts that the
district court failed to make the “exceptional case”
determination that would permit it to depart from the
presumptive rate set forth in 28 U.S.C. § 1961. It contends
that the district court may not set the interest rate based on a
 ORACLE USA V. RIMINI STREET 29

defendant’s bad behavior, citing our holding in Dishman v.
UNUM Life Insurance Co. of America for the proposition
that, “[a]lthough a defendant’s bad faith conduct may
influence whether a court awards prejudgment interest, it
should not influence the rate of the interest.” 269 F.3d 974,
988 (9th Cir. 2001). Rimini also asserts that the 0.61%
adequately represents market rates and fully compensates
Oracle’s loss.

It is true that “prejudgment interest is an element of
compensation, not a penalty.” Barnard, 721 F.3d at 1078.
Rimini is correct that it would have been improper for the
district court to set a higher rate based on Rimini’s litigation
conduct alone. But considering the district court’s analysis
in its totality, it is apparent that the rate was based primarily
on the jury’s award of copyright damages based on a
hypothetical license, making it appropriate to approximate
the licensing fees that Oracle “lost out on” and “would have
received, absent infringement” by using the Treasury rate on
the date of infringement.

The district court made an extensive and detailed record
throughout many years of complex and contentious
litigation. Its understandable frustration with Rimini’s
litigation conduct is apparent in some of the orders now
before us. However, there is ample evidence in the record to
support the court’s award of prejudgment interest at the
Treasury rate on the date infringement began. We find no
abuse of discretion.

Injunctive Relief

As to [a] permanent injunction, we review the
legal conclusions de novo, the factual
findings for clear error, and the decision to
grant a permanent injunction, as well as its
30 ORACLE USA V. RIMINI STREET

scope, for an abuse of discretion. To review
for abuse of discretion, “we first look to
whether the trial court identified and applied
the correct legal rule . . . [then] to whether the
trial court’s resolution of the motion resulted
from a factual finding that was illogical,
implausible, or without support in inferences
that may be drawn from the facts in the
record.”

Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020, 1030
(9th Cir. 2013) (quoting United States v. Hinkson, 585 F.3d
1247, 1263 (9th Cir. 2009) (en banc)).

The district court entered permanent injunctions against
Rimini based on copyright infringement and against Rimini
and Ravin based on alleged violations of the CDAFA. 8 We
stayed both injunctions pending resolution of this appeal.

In view of our conclusion that there was no violation of
the state computer laws, we reverse as to the CDAFA
injunction. As explained below, we vacate the copyright
injunction and remand for reconsideration in light of our
opinion.

The Supreme Court established a four-factor test that
must be applied before a district court may grant a permanent
injunction. eBay, Inc. v. MercExchange, L.L.C., 547 U.S.
388, 391 (2006). Here, the district court assessed the four
factors by reference to both the copyright and the CDAFA
claims, without considering separately the propriety of

8
The injunction entered by the district court is clearly divided into
separate portions. We therefore treat the injunction as if there were two
separate injunctions.
 ORACLE USA V. RIMINI STREET 31

issuing an injunction as to the copyright claims alone. For
example, the court concluded that Rimini’s “violations of
state computer access statutes” contributed to an “irreparable
injury” to Oracle’s business reputation and goodwill.

Based on the record before us, we do not know how the
district court would weigh the eBay factors with respect to
the copyright claims alone. We express no view on the
propriety or scope of any injunctive relief, which are matters
committed to the district court’s discretion in the first
instance.

Fees

“We review the award of fees and costs for abuse of
discretion, but will overturn it if it is based on an erroneous
determination of law.” Durham v. Lockheed Martin Corp.,
445 F.3d 1247, 1250 (9th Cir. 2006).

The district court awarded $28,502,246.40 in attorneys’
fees to Oracle. It concluded that this award was appropriate
under the fee-shifting provisions of the Copyright Act and
the state computer laws. Although Ravin was not found
liable for copyright infringement, the district court decided
that Ravin was, along with Rimini, “severally and equally”
liable for the award because he had violated the state
computer statutes.

In view of our conclusion that there was no violation of
the state computer laws, we reverse the judgment with
respect to Ravin’s liability for fees. As to Rimini, we vacate
the fee award and remand for reconsideration in light of
Oracle’s more limited success at litigation.

Costs
32 ORACLE USA V. RIMINI STREET

Taxable Costs

The district court awarded Oracle $4,950,566.70 in
taxable costs. Rimini originally asked us to reduce this award
by approximately $1,700,000, contending that Oracle only
requested roughly $3,200,000 in taxable costs in the district
court. Oracle conceded that approximately $1,500,000 in
non-taxable costs improperly was counted as taxable. About
$200,000 remains in dispute.

The district court’s cost award apparently was based on
the following chart it received from Oracle:

The district court evidently read the wrong column when it
awarded $4,950,566.70 in taxable costs. Given the parties’
agreement that Oracle is entitled to about $3,200,000 in
taxable costs, the remaining dispute involves $192,999.70 in
deposition costs. Because Rimini’s briefs articulate no basis
for our doing so, we do not disturb the district court’s
inclusion of these expenses in the taxable cost award. We
thus reduce the award to $3,435,281.25.

Non-taxable Costs

Title 17 U.S.C. § 505 provides:

In any civil action under [the Copyright Act],
the court in its discretion may allow the
 ORACLE USA V. RIMINI STREET 33

recovery of full costs by or against any party
other than the United States or an officer
thereof. Except as otherwise provided by this
title, the court may also award a reasonable
attorney’s fee to the prevailing party as part
of the costs.

By contrast, 28 U.S.C. § 1920 identifies only six categories
of costs that are taxable against the losing party.

In Twentieth Century Fox v. Entertainment Distribution,
we held that, because 17 U.S.C. § 505 permits the award of
full costs, the award of costs under § 505 is not limited to the
categories of costs described in 28 U.S.C. § 1920. 429 F.3d
869, 885 (9th Cir. 2005). Here, relying expressly on
Twentieth Century Fox, the district court awarded Oracle
$12,774,550.26 in non-taxable costs.

Rimini contends that Twentieth Century Fox has been
abrogated by Marx v. General Revenue Corp., 568 U.S. 371
(2013), and that, accordingly, the district court erred. We
disagree.

We are bound by our precedent unless the theory or
reasoning of the decision is “clearly irreconcilable” with a
higher intervening authority, such as a decision by the
Supreme Court. Miller v. Gammie, 335 F.3d 889, 899–900
(9th Cir. 2003) (en banc). Our decision in Twentieth Century
Fox concerned the relationship between 17 U.S.C. § 505 and
28 U.S.C. § 1920. The Supreme Court’s decision in Marx
concerned neither statute. Instead, the Court held that
15 U.S.C. § 1692k(a)(3) is not contrary to the costs
provision in Federal Rule of Civil Procedure 54(d)(1).
Nothing in Marx is clearly irreconcilable with Twentieth
Century Fox.
34 ORACLE USA V. RIMINI STREET

The parties shall bear their own costs on appeal.

AFFIRMED in Part, REVERSED in Part,
VACATED and REMANDED in Part.