by Thomas Wailgum

Oracle & Bingham McCutchen: Litigating the Competition into Submission Since 2003

Aug 28, 2009
Enterprise Applications

Oracle's business strategies require a wealth of legal counsel. Just ask SAP and Rimini Street.

If I were a lawyer, I’d want to work as a partner at Bingham McCutchen LLP in its San Francisco offices. Bingham McCutchen, you see, is the law firm that has received a lot of business from high-tech vendor Oracle over the years.

And with Oracle seemingly going all kinds of paranoid over third-party maintenance providers infringing on their turf and their 90 percent profit margins—most notably SAP’s defunct TomorrowNow subsidiary and now Rimini Street—and lawsuits with no end in site, Bingham McCutchen must be having “money fights” among its senior partners every Friday afternoon. What with all those billable hours from depositions and court filings and contract reviews and discovery procedures just adding up!

The Oracle & Bingham McCutchen relationship appears to have been cemented in 2003, in PeopleSoft v. Oracle. Bingham McCutchen’s David Balabanian was instrumental in representing Oracle in its very public and acrimonious acquisition of PeopleSoft. (The case put the H in Hostile Takeover.)

During the years, as Oracle kept acquiring competitors in the ERP, CRM, BI and database markets—small and large companies, and some willing and some not—Bingham McCutchen kept growing as well, doing some M&As of its own. Today, it has gross revenues of $767 million and more than 1,100 lawyers in 12 locations in the U.S., U.K. and Asia.

The mother load for Bingham McCutchen arrived when Oracle announced that it was suing SAP and its TomorrowNow subsidiary in 2007. Oracle alleged that TomorrowNow workers illegally accessed Oracle websites, and downloaded or stole (whichever you prefer) important Oracle software code and documentation (for its Siebel, PeopleSoft and J.D. Edwards product lines). Then, Oracle argued, TomorrowNow used all of that as part of TomorrowNow’s “half-off Oracle maintenance and support services” selling strategy. (To read a detailed examination of the saga, see An ERP Vendor Soap Opera: A Close Look at SAP’s Purchase and Attempt to Sell Off TomorrowNow.)

Oracle v. SAP has raged on and on and on, despite the court’s attempt to get them to settle.

No doubt, the case has raised tough and complex legal questions about the third-party maintenance and support business. As one article on the legal saga notes, “the discovery process, in which both parties gather evidence (in this case from computer systems) and interview people on both sides, has already become a massive, intricate and costly legal proceeding.” (To which Bingham McCutchen retorts: Cha-ching!)

Now, Oracle is claiming that a critical part of the SAP-TomorrowNow case involves going after third-party maintenance provider Rimini Street. In this rather incestuous case, you’ll note that Rimini Street’s CEO is none other than Seth Ravin, who cofounded TomorrowNow and briefly worked at SAP before leaving to found Rimini Street. (For a profile of Ravin and his business model, see The Man Behind ‘Half Off’ Third-Party Software Maintenance.)

In court documents filed last week, Oracle is attempting to compel Ravin to provide information about Rimini Street’s business model. Oracle claims that the information is quite relevant to the Oracle-SAP suit, according to an IDG News Service article. (In response, a Rimini Street exec told IDG News: “Nothing new here. Oracle once again is trying to find creative ways to obtain confidential, competitive data about Rimini Street’s award-winning support program—this time under the guise that it is somehow relative to the Oracle vs. SAP case, even though Rimini Street has no role in that case.”)

Now I’m not trying to impugn the good name of the Bingham McCutchen law firm—they’re racking up the legal fees because their client relies on various business strategies that require lots of competent and complex legal counsel.

And you know what? Oracle’s high-stakes game of “Winning by Litigating Competitors into Submission” has been working so far. So why stop now? I bet partners at Bingham McCutchen see no reason to stop, either.

Do you Tweet? Follow me on Twitter @twailgum. Follow everything from on Twitter @CIOonline.