Oracle beats NEC’s fraud claims in dispute over database license

The Oracle logo is shown on an office building in Irvine, California, U.S. June 28, 2018. REUTERS/Mike Blake

  • Oracle accused NEC of violating license terms, copyrights
  • NEC said Oracle induced it into signing, breaching license
  • NEC failed to show Oracle made false statements

(Reuters) – Japanese information technology company NEC Corp failed to show that Oracle committed fraud to get it to sign a license to Oracle’s popular database software, a San Francisco federal court has ruled.

NEC had brought the claims in response to Austin-based Oracle’s lawsuit accusing NEC of exceeding the terms of its license and infringing Oracle’s copyrights. Although NEC said it had “little doubt” based on circumstantial evidence that Oracle misled it into signing the license, U.S. District Judge Charles Breyer said Friday that “federal courts require more.”

Oracle had said in its July lawsuit that it licensed Oracle Database software to NEC for it to use in its biometric identification system Integra-ID 5. According to Oracle, it later discovered NEC had been distributing the software in excess of its rights, paying less than it should have, and altering the software without permission.

Oracle asked for over $7 million in damages.

NEC responded in September that it was a victim of Oracle’s “predatory business strategy” to push clients into restrictive licenses “with the expectation that the client’s intended use of the Oracle software would violate the restrictions” and later demand “unreasonable and exorbitant penalties.”

NEC said that after it told an Oracle representative how it planned to use the software, she falsely represented the use would comply with the license, but told it to “reinterpret” a question on its application to comply with the agreement.

“Of Oracle’s alleged statements and actions, none were false or fraudulent,” Breyer said in Friday’s ruling. Breyer said NEC had only plausibly argued that it misunderstood the application.

The court gave NEC permission to amend its counterclaims.

Oracle and its attorneys Nathan Walker and Fred Norton of the Norton Law Firm didn’t immediately respond to a request for comment, nor did NEC or its attorneys Kristoffer Leftwich and Li Chen of Chen Leftwich and Pamela Fulmer of Tactical Law Group.

The case is Oracle America Inc v. NEC Corp of America, U.S. District Court for the Northern District of California, No. 3:21-cv-05270.

For Oracle: Nathan Walker and Fred Norton of the Norton Law Firm

For NEC: Kristoffer Leftwich and Li Chen of Chen Leftwich, Pamela Fulmer of Tactical Law Group

Read more:

Oracle sues NEC over alleged software contract, copyright violations

Blake Brittain

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com

Read More

Leigha Geddes