Data platform and analytics provider Teradata filed copyright infringement suit in federal court June 20, contending that SAP utilized its trade secrets to develop a crown jewel product, the in-memory HANA database.
Dr. Vishal Sikka, who resigned from SAP in 2014, and SAP board chairman/company co-founder Hasso Plattner are the principals who developed HANA (which stands for high-performance analytic appliance), which has grown into a $2 billion business and is now SAP's flagship product.
San Diego-based Teradata filed its complaint in the U.S. District Court for the Northern District of California against SAP SE, SAP America, Inc. and SAP Labs, LLC for “trade secret misappropriation, copyright infringement and antitrust violations,” according to the legal affidavit.
Teradata is known widely for its data warehouses but has been expanding its business to include data analytics software and services for the past several years. SAP had made its mark in enterprise middleware, conventional databases and other software for years until it made a breakthrough to revitalize its business with the fast HANA database in 2011.
Joint Development Deal in 2008 Started It All
The two companies entered into a joint development agreement in 2008. The litigation alleges that Germany-based SAP entered the venture with Teradata with the intent of gaining access to its intellectual property and creating a competing database product that it then tried to coerce its customers to use.
SAP said it was surprised by the Teradata complaint and said may issue a statement once it has reviewed the lawsuit, which seeks an injunction, unspecified damages and other legal relief available under the law.
Teradata issued the following statement:
“As set forth in the complaint, Teradata is alleging that SAP has engaged in a decade-long campaign of anti-competitive behavior, to the detriment of the parties’ customers and Teradata alike. SAP lured Teradata into a purported joint venture in order to gain access to Teradata’s valuable intellectual property. SAP’s purpose for the joint venture was to steal Teradata’s trade secrets, developed over the course of four decades, and use them to quickly develop and introduce a competing though inferior product, SAP HANA. Upon release of SAP HANA, SAP promptly terminated the joint venture, and SAP is now attempting to coerce its customers into using HANA only, to the exclusion of Teradata.
“Teradata supports competition and innovation in the data and analytics space. SAP’s conduct, however, is neither pro-competitive nor innovative. We believe seeking relief through legal action against SAP is a necessary step to protect the rights and interests of our shareholders and all of our other stakeholders, including our customers.
“Teradata is seeking an injunction barring SAP’s illegal conduct, monetary damages, and all other legal and equitable relief available under law and which the court may deem proper.”
No Word June 20 from SAP
eWEEK contacted SAP’s senior director of corporate communications officer, Andy Kendzie, who declined comment the morning of June 20.
Teradata filed the following data points in the complaint:
- “This case is about SAP’s campaign of anticompetitive conduct directed at Teradata. Over at least the last decade, SAP has used its powerful position in Enterprise Resource Planning (“ERP”) Applications to gain entrance to and quickly grab market share in the Enterprise Data Analytics and Warehousing (“EDAW”) market, in which it previously had essentially no presence.”
- “SAP’s strategy began in 2008, when SAP leveraged its position in ERP applications to lure Teradata into a purported joint venture in order to gain access to Teradata’s valuable intellectual property. The purpose of the joint venture — a purpose which Teradata now knows was a false one on SAP’s part — was to combine SAP’s ERP Applications suite and Business Warehouse reporting tool (SAP BW) with Teradata’s industry-leading “massively parallel processing” (MPP) architecture for EDAW.”
- “SAP then stole Teradata’s trade secrets (accumulated by Teradata over the course of four decades in the EDAW space), and used them to quickly develop and introduce a competing (though inferior) product: SAP HANA.”
- “Upon release of its new product, SAP promptly terminated the parties’ joint venture, and it is now attempting to coerce its customers into using HANA only, to the exclusion of Teradata, by forcing its customers to adopt HANA in exchange for upgrading their ERP Applications. Moreover, and on information and belief, SAP has begun significantly restricting Teradata’s ability to access customers’ SAP-derived data.”
- “Through this conduct, SAP has deliberately sought to exploit its large, existing ERP customer base to the detriment of Teradata and its customers. Given the extremely high costs of switching ERP providers, SAP’s ERP customers are effectively locked-in to using SAP’s ERP Applications, and SAP is now attempting to lock them into using only HANA in the EDAW market as well.”
- “SAP could not have so quickly developed and marketed HANA in the first place without its theft of Teradata’s trade secrets. Now, using the fruits of that theft and its position in ERP Applications, SAP is attempting to foreclose Teradata from supplying EDAW solutions to many of the largest corporations in the world.”
SAP HANA now claims about 10,000 customers on the way to about 15,000 by 2020, according to company figures.
The court documents can be accessed here. Morrison & Foerster LLP is serving as legal counsel to Teradata.