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Oracle Wins U.K. Supreme Court Ruling Over Marketing in EU

Oracle Corp. (ORCL), the world’s largest database maker, won a U.K. Supreme Court ruling protecting its right to be first to market its hardware in the European Union before third-party resellers may do so.

The judgment today in London reversed a Court of Appeal ruling in favor of M-Tech Data Ltd., which was sued by Sun Microsystems Inc. in 2009 for importing Sun disk drives into the EU after Sun sold them in China, Chile and the U.S. Sun, purchased in 2010 by Oracle, may be first to market its goods in the EU under an “economically controversial, but legally well- established policy,” even if it had previously sold the products elsewhere, the Supreme Court ruled.

M-Tech, based in Manchester, argued that Sun tried to control the secondary market for its hardware in the European Economic Area valued at $1.07 billion in 2007, according to the judgment. M-Tech claimed Sun did so by withholding data from independent resellers that would have helped determine whether certain goods had already been sold in the region, producing a “chilling effect,” M-Tech said.

“The unlawful conduct alleged by M-Tech does not amount to a defense, even if proved,” according to a court summary of the judgment handed down by a panel of five justices. “On the agreed facts, the disk drives were never marketed in the EEA until they were imported by M-Tech without Sun’s consent.”

Generated Interest

M-Tech is “surprised and disappointed with the decision,” Harvey Stringfellow, the company’s lawyer at Hill Dickinson LLP in Liverpool, said in a phone interview. “This was a case that generated a huge amount of interest within the independent sector for” information technology, he said.

M-Tech had argued that Sun can’t enforce its trademark because Sun is trying to divide the market in the 27-nation EU in violation of laws permitting free movement of goods. The case was filed as a trademark dispute because Sun has distribution rights to products that carry its logo.

Oracle, based in Redwood City, California, acquired Sun in January 2010, for $7.3 billion, and renamed the unit Oracle America Inc.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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