New Oracle Lawsuit Against TXO is Something You Should Pay Attention To

As first reported in The Register, Oracle’s lawyers continue to earn their keep. They filed yet another lawsuit, this time against TXO Systems in the UK court. This dispute is slightly different than other filings from Oracle’s legal team. Before I tell you what I think, you can read it for yourself here (PDF, 626 KB).

Some background information

TXO is in the business of selling new and used hardware. Oracle alleges that TXO was buying Sun hardware in one country, and reselling it in another country where that hardware was never offered for sale before. Sound confusing? It is a little. You see, every hardware vendor releases specific versions and models for sale on a per-country basis. In this case, Oracle says it never offered these particular models in the UK and therefore TXO is violating Oracle’s trademarks.

This is another interesting case. There is no claim that TXO was removing Oracle branding from the hardware, firmware, or software it was reselling. There was no claim that TXO was claiming to be an “official” authorized reseller. The claim is simply that Oracle never sold this hardware in the UK and therefore TXO cannot sell it either.

Why is this important?

I think we need to look at the larger context. What if your company bought a piece of hardware, used it, and then wanted to sell it? What if you sold that hardware to someone in another country? Are you now violating the vendor’s trademarks? What if you sold your cell phone to someone in another country on eBay? Could you be liable for violating trademarks? Is Oracle’s claim limited to resellers of hardware?

Our thoughts

I believe this lawsuit is a shot across the bow of 3rd-party resellers in the “grey market” or “after market”. You see, Oracle doesn’t make any money when you sell your used Oracle hardware. Only you make money. Not only does Oracle not make money on that transaction, Oracle loses out on the possible sale of new hardware. (Other than Exadata, the Sun hardware business is way down. So not sure what the actual harm to Oracle is here!) The fact is, Oracle doesn’t like it when Oracle doesn’t make money on a transaction involving their technology.

For years Oracle has gone after third-party support providers. It’s only reasonable that they would target third-party resellers. Let’s see where this court case takes us. I am definitely not an expert in trademark law. I have a sneaking suspicion this is not really about protecting trademarks. It’s about something bigger that we should all pay attention to.

Picture of Craig Guarente
Craig Guarente
Craig is the President and Founder of Palisade Compliance, which he founded in 2011. Before 2011, Craig worked at Oracle for 16 years where he was the Global Vice President of Contracts, Business Practices, and Migrations. He was also the Global Process Owner for Oracle’s audit teams (LMS), a member of Oracle’s CIO advisory board, and on the Oracle User Group’s contract and licensing advisory board. Craig is now the leading expert on Oracle licensing, is quoted in dozens of publications, and assists with many high-profile Oracle disputes.