Mars wanted to sue Oracle in licensing dispute

Mars court filings show the extent to which Oracle would go to get more money out of one of its biggest customers

Mars, the US confectionery company that made revenues of $33bn in 2014, filed a court action against Oracle in October last year, which showed just how far the software vendor would go to ensure it makes money through its much-criticised software licensing audit practices.

Mars wanted the Superior Court of California County of San Francisco to order Oracle to limit its audit activities in accordance with the audit clause in its 1993 Software Licence and Services Agreement with Mars, and to bar Oracle from following through on its threat to terminate Mars' licence and software update licence from October if Mars did not comply with various demands Oracle had made during the course of the audit.

It said that cessation of all Oracle programs licenced to Mars would result in substantial disruption to the day-to-day operations of its business, as its database software supports 80 per cent of Mars' IT applications.

Documents from the court show that Mars provided Oracle with 233,089 pages in support of an audit.

In a blog post, Dave Welch, CTO of House of Brick, said that this made him "cringe" because clearly Mars made good faith in the effort of putting together those documents, but they weren't enough to persuade Oracle to be reasonable.

"I claim that even the type of disclosure alluded to by the filing would be unnecessary - let alone the page count - for an Oracle audit customer running Oracle on vSphere to efficiently complete the audit in enjoyment of all its contractual rights," he said.

"That means no negotiation that could lead to a weakening of or payment for the licensee's existing contractual rights. Less important is that a customer's overhead in providing all those pages would very likely directly violate Oracle's contractual obligation to not unreasonably interfere with the licensee's normal business operations," he added.

So what happened?

The case began when Oracle suggested it review Mars' licences; it conducted a full-scale audit discovery process to determine how many servers at Mars ran VMware vSphere 5.5 or later. Oracle wants its customers to buy an Oracle licence for every physical server on which vSphere is installed.

"Oracle programs are installed on any processors where the programs are available for use. Third-party VMware technology specifically is designed for the purpose of allowing live migration of programs to all processors across the entire environment," Oracle told Mars on September 25 2015.

Mars claimed that this letter from Oracle was the first time it had heard Oracle wanted to further the argument.

According to Mars' account of events, it worked with Oracle's Licensing Management Services (LMS) representatives to try to structure the audit, and to come to an agreement for a letter of understanding to govern the audit process. But LMS then stated it wasn't able to agree to any letter of understanding.

Then in April 2015, Oracle sent Mars a letter stating that the confectionery company has breached the agreement by unreasonably delaying and refusing to permit Oracle's licence review.

Mars then provided Oracle with hundreds of thousands of pages of documents to assist in the auditing process, but Oracle didn't want any of it. After several exchanges between the companies, Mars said that Oracle made demands for Mars to provide information that was "outside the scope of the audit" that was agreed. For example, it said that Oracle demanded it provide a list of all clusters and servers included in Mars' VMware environment.

Mars suggested that Oracle asserted that, because Mars was using VMware version 5.1 or higher, "all additional servers and/or clusters not running Oracle must be licensed".

It also wanted Mars to identify the population of users that have access to data from Agile, its product lifestyle management tool, including when data is used from three systems to which Agile data are exported. The definition of "user" in this case was also debated by the two companies.

And the conclusion?

Well, it seems as if the two companies have settled out of court, as Mars filed a motion on December 16 for the court to dismiss the action "with prejudice", meaning that it can't bring the same action against the same defendant in the same court ever again.

Welch said that he was "sorry that it appears Oracle opted not to appear in court" but added that he wasn't surprised.

"In my opinion, Oracle appears interested in trying to see if it can get any more money out of any of its Oracle on VMware customers. It also appears to want to do that without a court's evaluation," he said.