Mars v. Oracle was a 2015 action in the Superior Court of California, County of San Francisco, in which the confectionery company Mars asked the court to limit an Oracle software licence audit to what its licence agreement allowed, and to stop Oracle terminating its licences while the dispute lasted. The case never reached a ruling: as reported by Computing, Mars moved on 16 December 2015 to dismiss its own action with prejudice, and the press reported that the parties had settled out of court.[2][1] It is one of the few disputes over an Oracle audit to have reached a court file, and the filings, as described by the press, show how a licence review can widen into demands about systems that do not run the vendor’s software.
The court’s file is not published online, and the San Francisco Superior Court case lookup could not be used for this article. Every fact about the dispute below is therefore attributed to press reports that described the filings in January 2016.
Background
Mars licensed Oracle software under a Software Licence and Services Agreement dating from 1993, as reported by Computing.[2] According to the same report, Mars told the court that Oracle database software supported 80 per cent of its IT applications, so that losing its Oracle licences would cause substantial disruption to the day-to-day running of its business.[2]
Network World reported that Oracle started its licence review in September 2014.[3] Oracle’s audits are run by its License Management Services (LMS) group, and Mars said it worked with LMS representatives to structure the audit and to agree a letter of understanding to govern the process, which LMS then said it could not agree to, as reported by Computing.[2]
The dispute
Breach letter and document production. As reported by Computing, Oracle wrote to Mars in April 2015 that Mars had breached the agreement by unreasonably delaying and refusing to permit Oracle’s licence review.[2] Computer Weekly reported that, according to the filings, Mars provided Oracle with 233,089 pages of documents between 13 May and 2 September 2015, and that Mars said it had produced the information “reasonably necessary to audit Mars’ use of Oracle’s software”.[1]
Demands about VMware. The central disagreement was virtualization. As reported by Computer Weekly, Oracle asserted on 21 August 2015 that, because Mars was using VMware version 5.1 or higher, it needed to know how many vSphere servers Mars was running.[1] Computing reported that Oracle demanded a list of all clusters and servers in Mars’ VMware environment, and that Mars characterised Oracle’s position as being that “all additional servers and/or clusters not running Oracle must be licensed”.[2] The same report quotes Oracle’s letter of 25 September 2015: “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.”[2] Network World summarised Mars’ complaint as saying that Oracle “demanded information to which it is not contractually entitled regarding servers that do not run Oracle software and Mars personnel who do not use Oracle software”.[3]
Oracle’s position reflects its partitioning policy, which today classes VMware among the “soft partitioning” technologies and states that soft partitioning “is not permitted as a means to determine or limit the number of software licenses required for any given server or cluster of servers”.[4] The policy document also states that it “may not be incorporated into any contract and does not constitute a contract”, which is why customers dispute whether it can widen what a signed licence agreement requires.[4]
User definitions. The filings also described a dispute over who counts as a user of Oracle’s Agile product lifecycle management software. As reported by Computing, Oracle wanted Mars to identify the users with access to data from Agile, including where Agile data was exported to three other systems.[2] Computer Weekly quoted Oracle’s position from the filings: “The use of records created by Agile is use of Agile software.”[1]
Threatened termination. Network World reported that Oracle threatened in October 2014 to terminate the agreement if its demands were not met.[3] As reported by Computing, Mars asked the court to order Oracle to limit its audit activities to the audit clause of the 1993 agreement, and to bar Oracle from terminating Mars’ licences and software update licence if Mars did not comply with the demands Oracle had made during the audit.[2]
Decision or outcome
There was no decision. As reported by Computing, Mars filed a motion on 16 December 2015 asking the court to dismiss the action with prejudice, which prevents Mars from bringing the same claim against Oracle again.[2] Computer Weekly reported that on 16 December 2015 Oracle and Mars “agreed not to proceed with the licensing dispute going to court” and that the companies “settled out of court”.[1] Network World reported that neither company commented on any settlement terms.[3] No terms have been published, and no court has ruled on Oracle’s VMware position in this case.
Significance for software licensing and SAM practice
The case is cited because the filings, as reported, put on the record several points that licence managers meet in Oracle audits: the size of the data request (233,089 pages), demands about servers and clusters where no Oracle software was installed, a user definition that reached people working with exported data, and a termination threat used to press for compliance with those demands.[1][2] It also shows the route Mars chose: asking a court to hold the audit to the audit clause of the signed agreement rather than to the vendor’s published policies.[2]
Because the case ended without a ruling, it is not authority on whether Oracle’s partitioning policy binds a licensee or on how far an audit clause reaches. Its value is as a documented example of how an audit dispute can escalate, and of the questions a licensee should settle at the start: what the contract lets the vendor ask for, which documents define the licence metrics, and what process both sides have agreed.
Lessons learned
- The audit clause sets the scope. Mars’ central claim was that Oracle’s demands for data about servers and staff that did not use Oracle software went beyond what its 1993 agreement allowed, so read the audit clause before answering any request.[2][3]
- Agree the process in writing first. Mars tried to agree a letter of understanding governing the audit and LMS declined; a written scope, data list and timetable gives both sides a reference point and records what was provided.[2][1]
- Policies are not the contract. Oracle’s partitioning policy treats VMware as soft partitioning but says it is not a contract, so the binding terms are those in the signed agreement and the documents it incorporates.[4]
- A termination threat can be taken to court. Mars asked the court to stop Oracle terminating its licences while the scope of the audit was disputed, given how much of its business ran on Oracle software.[2]