SAP Admits Software Piracy for the Court Record

However, Oracle is trying to prove willful wrongdoing on SAP's part to get a jury to order SAP to pay more millions of dollars in damages than SAP thinks is fair.

German database maker SAP AG admitted in a court brief to Judge Phyllis J. Hamilton of the U.S. District Court in Oakland, Calif., dated Oct. 28, that it won't contest Oracle's claim that it is culpable for copyright infringement committed several years ago by its now-defunct TomorrowNow unit.

The fact that SAP has admitted knowing about the software thefts isn't news in itself, because then-CEO Henning Kagermann admitted to Oracle he knew about the TomorrowNow transgressions in 2007.

However, this latest statement, which is available for viewing on SAP's lawsuit Website (PDF format), represents the first time SAP has taken corporate responsibility for the piracy. That is now entered into evidence for the upcoming trial to decide how much in damages SAP will have to pay Oracle.

The admission also could lessen the likelihood that SAP executives will have to testify in court.

In another court filing Oct. 28, Oracle received a letter from SAP's lawyers late Oct. 27 explaining that SAP has elected "not to contest the claim for contributory infringement," and that the German company will ask Judge Hamilton to keep the trial as brief as possible. The shorter the court action, the less negative publicity for SAP.

Oracle is seeking $2.15 billion in damages. SAP believes the fine should be in the tens of millions. The jury in the trial will hear testimony from both sides before deciding the final amount.

Jury selection begins Nov. 1; the hearings may span several weeks.

Oracle spokeswoman Deborah Hellinger issued this response to the SAP brief on Oct. 28:

"SAP management has insisted for three and a half years of litigation that it knew nothing about SAP's own massive theft of Oracle's intellectual property. Today, SAP has finally confessed it knew about the theft all along. The evidence at trial will show that the SAP Board of Directors valued Oracle's copyrighted software so highly, they were willing to steal it rather than compete fairly."

SAP, however, has insisted until now that TomorrowNow acted on its own volition, that the corporation did not know about or condone the IP piracy for three years, and that SAP stopped the pirating as soon as it found out about it.

Oracle CEO Larry Ellison, who wants to have former SAP CEO and incoming Hewlett-Packard CEO Leo Apotheker testify in the case, has said-among other things-that he finds this hard to believe.

Four years ago, Texas-based TomorrowNow, which did customer support for SAP, was caught stealing intellectual property by gaining unauthorized access to a customer-support Oracle Website and copying thousands of pages of software documentation and support software.

Oracle claimed that more than 8 million instances of its enterprise support software were stolen, stored on SAP's servers and used without its permission. It also charged that SAP/TomorrowNow deployed automated bots that used Oracle's own software to move customers from PeopleSoft (owned by Oracle) over to SAP.

Enterprise support software amounts to about half of Oracle's revenue, so this was no minor infraction.