Oregon, Oracle Spar over Copyright Infringement Claim

A lawyer for Oracle Corp. implored a federal judge Thursday to let the company's copyright lawsuit against the state of Oregon go forward despite the state's claim that it is immune from being sued.

The case is part of a complex legal battle stemming from the failure of the Cover Oregon health insurance exchange. "This is a case where the state of Oregon has simply appropriated Oracle's code and said, 'Sorry, you can't sue us,'" Oracle attorney Karen Johnson-McKewan told the judge.

Oracle, which was the primary technology contractor on the Cover Oregon project, maintains it was never fully paid for its work and that the state illegally used Oracle's code.

Cover Oregon was created by the Legislature as a public corporation independent of the state, governed by a board of directors appointed by the governor.

Earlier this year - after the website failure became a political embarrassment and led Oregon and Oracle to sue each other - the Legislature voted to disband the Cover Oregon corporation and transfer its responsibilities to state agencies.

Oregon's lawyers argue that the legislative move requires that Oracle's lawsuit be dismissed because the state is generally immune from litigation under the 11th Amendment to the U.S. Constitution, while the autonomous Cover Oregon was not.

Oracle argues that the state waived its immunity in its various contracts with Oracle. The company also says transferring Cover Oregon to a state agency was unconstitutional if it deprives Oracle of the opportunity to enforce its intellectual property rights.

U.S. District Judge Anna Brown said she'll consider the arguments and issue an opinion "reasonably soon." Lawyers for both sides said they expect to appeal if they lose.

The copyright dispute is only part of the wide-ranging litigation between Oregon and Oracle. In a separate case pending in Marion County Circuit Court, the state accuses Oracle of fraud and corruption. Oracle accuses the state of contract violations.