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Oracle America, Inc. v. Terix Computer Company, Inc.

United States District Court, N.D. California, San Jose Division

April 24, 2015

ORACLE AMERICA, INC., et al. Plaintiffs,
v.
TERIX COMPUTER COMPANY, INC., et al., Defendants.

ORDER GRANTING-IN PART ORACLE'S MOTION TO STRIKE, GRANTING MAINTECH'S MOTION TO STRIKE AND GRANTING-IN-PART MOTION FOR LEAVE TO FILE AMENDED ANSWER (Re: Docket Nos. 388, 416, 434)

PAUL S. GREWAL, Magistrate Judge.

Even as this case moves past the close of fact discovery and toward dispositive motions and trial, the parties continue to dispute the sufficiency of the pleadings. They specifically dispute whether the other's affirmative defenses are sufficient.

Having already ruled once on these matters, the court again finds itself in the mix of Twombly, Iqbal, Rule 8(b)(1) and Rule 12(f). As explained below, the court GRANTS Plaintiffs Oracle America, Inc. and Oracle International Corporation's motion to strike, but only in very limited part. The court also GRANTS Defendant Maintech's motion to strike and GRANTS-IN-PART Oracle's motion for leave to file an amended answer.

I.

In 1992, Sun Microsystems released its first version of Solaris.[1] Solaris is a UNIX-based operating system designed and used to operate server, blade, storage and related hardware.[2] This includes hardware that is critical for legal, regulatory or business reasons, and therefore requires extremely high support levels.[3] It also includes less critical systems for test, development and back-up.[4] Sun regularly made available updates and firmware for Solaris that enhanced performance or simply fixed bugs in the system.[5] Sun routinely permitted its customers-as well as third-party support providers servicing them-to obtain Solaris updates and firmware promptly upon release at little or no cost.[6]

Things changed in 2011 after Sun was acquired by Oracle. Now customers who want Solaris updates and firmware must sign an annual contract for technical support services to be performed by Oracle.[7] No customer may purchase updates or firmware without these services.[8] Oracle also prices the combination of updates, firmware and both services at less than Oracle's cost.[9] Customers that sign a support agreement-either directly with Oracle or through a reseller authorized by Oracle-receive a Customer Support Identification number linked to the products covered by the agreement.[10] The CSI number allows customers to create login credentials to access Oracle's secure support website.[11] Using these credentials, the customer may download Solaris updates and firmware for the hardware systems that are covered by the support agreement.[12] The customer may not share or use its CSI number for the benefit of others or for the benefit of unsupported Oracle hardware-only customers who pay for and maintain an agreement with Oracle for the hardware at issue may download Solaris updates and firmware and only for their own internal business use on specified computers.[13]

Defendants Terix Computer Company, Inc., Maintech Incorporated, Volt Delta Resources, Sevanna Financial, Inc. and West Coast Computer Exchange, Inc. offer their own support services for Solaris hardware.[14] Each either contracts directly with customers to provide this support or indirectly as a subcontractor to another entity, such as its co-defendant.[15]

Oracle filed this suit against Defendants for copyright infringement, fraud and other torts, [16] and Defendants promptly counterclaimed, alleging antitrust violations, unfair competition and other torts.[17] After granting-in-part motions to dismiss the complaint and counterclaims, [18] the court turned to the adequacy of the parties' affirmative defenses. In November of last year, the court dismissed Defendants' 87 affirmative defenses with leave to amend based on the insufficiency of the underlying facts.[19] Defendants subsequently amended their answers.[20] Now Oracle moves to strike several of the defenses as re-pleaded. Defendants similarly move to strike Oracle's affirmative defenses, prompting Oracle to move further for leave to amend its defenses.

II.

This court has jurisdiction under 28 U.S.C. §§ 1331 and 1338. The parties further consented to magistrate judge jurisdiction under 28 U.S.C. § 636(c) and Fed.R.Civ.P. 72(a).

Under Fed.R.Civ.P. 8(b)(1), an answer must "state in short and plain terms its defenses to each claim asserted against it." Affirmative defenses are subject to the heightened pleading standard set forth in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal . [21] Pleadings must contain enough factual assertions to provide "plausible grounds" to infer that the alleged conduct in fact took place.[22] A claim has "plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.... Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."[23]

A party may move to strike affirmative defenses pursuant to Fed.R.Civ.P. 12(f).[24] In the Ninth Circuit, the court considers "a two-step process" to evaluate the sufficiency of a pleading.[25] "First, a court should identif[y] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.'"[26] "Then a court should assume the[] veracity' of well pleaded factual allegations' and determine whether they plausibly give rise to an entitlement to relief.'"[27]

III.

Oracle moves to strike ten of Defendants' affirmative defenses: (1) waiver, (2) estoppel, (3) laches, (4) copyright misuse, (5) unclean hands, (6) failure to mitigate, (7) fair use, (8) privileged conduct and good faith, (9) acts, conduct or omissions of others and (10) innocent infringement.[28] Oracle also seeks dismissal of ...


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