SAP Agrees to Settle Oracle Copyright Violation Case

The German enterprise software maker will pay $426 million for the actions of its defunct U.S. affiliate, TomorrowNow, which stole Oracle software and documents in an effort to sway customers to SAP. Unless Oracle wants to appeal, that is.

In what could be the last news item about a case that originally was brought to court during a previous U.S. presidential administration, SAP agreed Aug. 2 to pay Oracle a damage award of $306 million in the TomorrowNow copyright infringement suit filed by Oracle in 2007.

This damage amount goes on top of the $120 million SAP already has paid to Oracle in attorneys' fees when it admitted that its U.S.-based former affiliate, TomorrowNow, stole software and proprietary documents from Oracle's Websites in October 2010.

SAP pled guilty in federal court to 11 counts of violations of the U.S. Computer Fraud & Abuse Act and one count of criminal copyright infringement during the trial, which was held in Oakland, Calif. in summer 2010. SAP ultimately took corporate responsibility for its affiliate's actions in a court document filed Oct. 28, 2010, and officially apologized to Oracle on Nov. 16, 2010.

However, there is still a chance that the case could continue in appellate court. In a statement, Oracle said its "unanimous 2010 jury verdict awarding it $1.3 billion can now be immediately taken to the Ninth Circuit Court of Appeals."
Oracle apparently is thinking it over. An Oracle spokeswoman didn't immediately reply to a request from eWEEK for further comment.

Fine Could Have Been Much Higher

The $306 million specified on Aug. 2 is the remainder of the fine agreed to by SAP, which long has been a rival to Oracle in the enterprise application and data center middleware businesses.

"SAP believes this case has gone on long enough," SAP spokesman James Dever said in an email to eWEEK. "Although we believe that $306M is more than the appropriate damages amount, we agreed to this in an effort to bring this case to a reasonable resolution. Whatever happens next, SAP will continue to focus on innovating for the benefit of our customers."

Oracle would have banked the largest U.S. intellectual property infringement award on record if the original judgment had stood. The jury on Nov. 23, 2010, had concluded that $1.3 billion was fair restitution in the copyright-infringement lawsuit brought by Oracle.

SAP subsequently filed an appeal, with Judge Phyllis Hamilton's resulting decision throwing out the fine amount coming a full nine months later.

Background on the Case

Two years after it was acquired by SAP in 2005, Texas-based 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. It then resold the software and documentation to Oracle customers and tried to persuade them to switch to SAP.

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.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...