The Oracle saga: Auditing software publishers, bad faith and disloyalty

Two years after the Paris Tribunal de Grande Instance ruling, the Paris Court of Appeal has found Oracle guilty of bad faith and unfair dealing.

At first instance, Oracle argued that the Purchasing software was not part of the contractual scope of the licence granted to AFPA and that its installation by SOPRA and use by AFPA constituted acts of infringement. The Paris High Court ruled that the dispute concerned contractual performance and not infringement and ordered Oracle to pay AFPA and SOPRA €100,000 each in legal costs. Oracle has appealed this decision.

In its judgment of 10 May 2016, the Court overturned the first instance judgment and examined the conduct of AFPA and SOPRA during the installation and use of the said software in order to determine whether or not there had been acts of infringement on their part. It concluded that:

"that by installing and using the PO module, which is at least related to the Purchasing software and included in the scope of the Mosaic contract, which was duly paid for, SOPRA and AFPA did not breach any of their contractual obligations; that Oracle International Corporation cannot therefore be accused of any infringement..

The Court of Appeal found Oracle guilty of bad faith and disloyalty towards AFPA and SOPRA by taking advantage of its audit rights to put pressure on its customer and by unduly demanding regularisation of software licences allegedly not included in the contractual scope.

Oracle Corp, Oracle International Corp and Oracle France were therefore ordered to pay AFPA and SOPRA, in addition to the €100,000 in court costs awarded at first instance:

• 100,000 each in damages for damage to their image and disruption to their operations
• 100,000 each in legal costs.

See the judgment