SAP Tells Court It Is Sorry for Violating Oracle Copyrights

By Chris Preimesberger  |  Posted 2010-11-15 Print this article Print

CEO tells court that "[TomorrowNow was] doing things that required much closer scrutiny, and we didn't do that. ... I am sorry for that."

Back on Oct. 28, German enterprise application maker SAP admitted in a court document that it took corporate responsibility for copyright infringement involving its marketplace rival, Oracle-three and a half years after Oracle first brought the lawsuit.

On Nov. 15, two weeks after the damages stage of the lawsuit started, SAP officially apologized in court for its actions-deeds that were carried out by a now-defunct service provider acquired in 2005, TomorrowNow, but were done with the complicity of high-up SAP executives.

From the witness stand in federal district court in Oakland, Calif., SAP co-CEO Bill McDermott apologized to the court and Oracle for its copyright infringement.

"They [TomorrowNow] were doing things that required much closer scrutiny, and we didn't do that," McDermott said. "I am sorry for that."

Two years after it was acquired by SAP in 2005, TomorrowNow was caught stealing Oracle's intellectual property by gaining unauthorized access to a customer-support Oracle Website and downloading copyrighted instances of support software and thousands of pages of documentation.

In the original litigation, Oracle claimed that more than 8 million instances of its enterprise support software worth $2.15 billion 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 lure customers with software installations from PeopleSoft,  JD Edwards and Siebel Systems (all now owned by Oracle) over to SAP.

Enterprise support software, which is what TomorrowNow illegally downloaded, amounts to about half of Oracle's annual revenue.

Actions didn't result in much new business, however

Ironically, TomorrowNow's strategy didn't result in much new business for SAP, McDermott told the court.

"TomorrowNow was not a big driver of software sales," he told the court. "It was not a very good business idea."

Oracle CEO Larry Ellison, following persistent questioning by SAP lawyers from Jones Day, admitted on Nov. 8 that only about 350 Oracle customers were lured away to SAP as a result of TomorrowNow's illegal actions.

Nonetheless, Ellison testified that Oracle actually estimates that the copyright infringement has cost Oracle upward of $4 billion, although he admitted in court that he does not have documentation to prove that he and his staff discussed this figure.

However, the next day, Paul Meyer, Oracle's damages expert, told the court that SAP should pay Oracle $1.66 billion. Thus, it is unclear even among Oracle's team exactly what fine should be assessed for the damages.

The case is being tried before U.S. District Court Judge Phyllis Hamilton and an eight-person jury.

Oracle originally said it wanted $2.15 billion in restitution; SAP believes a figure in the neighborhood of $40 million is fair. SAP already has paid $120 million to cover court costs incurred by Oracle.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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