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The CEO of tech-support firm Terix has been sentenced to two years’ prison and fined $100,000 for stealing Oracle’s firmware patches and updates, and using them to support clients.
Bernd D Appleby, co-owner and CEO of Terix, was sentenced in a US District Court on Friday for fraudulently obtaining $10m of Oracle’s IP in the form of Sun Solaris and other Oracle hardware patches. Appleby faces two years of supervised release after his stint in prison.
Appleby and three other Terix executives pleaded guilty in August 2007 to setting up three fake companies using bogus identities, prepaid telephones, and prepaid credit cards to enter service support contracts for a single server with Sun and Oracle.
Fellow co-owner and COO James A Olding was sentenced to one year and one day in prison and handed a $50,000 fine. He also faces three years of supervised release.
According to the charges, the two co-owners, Terix’s sales director and technical services director, used the patches to support around 500 Terix customers. The company had downloaded 2,700 patches and updates between 2010 and 2014, according to the Justice Department.
Oracle won a ruling against Terix and several affiliated firms in June 2015 over the scheme. A federal judge awarded Oracle $57.7m in damages but the ruling more broadly put all third-party providers on notice.
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Oracle’s lawyers argued that third-party maintenance firms don’t have rights to Solaris patches.
“Oracle is pleased that the United States District Court for the Southern District of Ohio accepted the guilty pleas of James Olding and Bernd Appleby, the principals of Terix, for their roles in misappropriating Oracle’s intellectual property and sentenced them both to prison for their criminal acts,” said Oracle spokeswoman Deborah Hellinger.
“Oracle takes violations of its intellectual property rights very seriously and, as demonstrated by Oracle’s lawsuits against Terix, Rimini Street and other IP violators, Oracle will not hesitate to go after those who do so. Oracle appreciates the fine work of the law-enforcement officials whose efforts led to the criminal penalties assessed against Terix’s principals.”
Terix’s director of sales was sentenced to one day in prison, two years of supervised release and a $5,000 fine, while the technical services director was sentenced to two years’ probation and a $5,000 fine.
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A judge awarded Oracle $57.7 million in damages in a lawsuit against Terix that revolved around distribution patches and updates to the Solaris operating system.
The plan for Rimini Street, which recently outlined plans to merge with an investment company and be publicly traded, has been to expand into broader services.
Rimini Street will get an enterprise value of $837 million in a merger with GP Investments Acquisition Corp. and become publicly traded when the deal closes in the third quarter.