SAP Officially Apologises To Oracle

Back on 28 October, 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 15 November, two weeks after the damages stage of the lawsuit started, SAP officially apologised in court for its actions – deeds which were carried out by a now-defunct service provider acquired in 2005, TomorrowNow, but were done with the complicity of high-up SAP executives.

Official apology

From the witness stand in federal district court in Oakland, California, SAP co-chief executive Bill McDermott apologised 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 unauthorised 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 (£1.34bn) 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.

Not a big money maker

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

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 chief executive Larry Ellison, following persistent questioning by SAP lawyers from Jones Day, admitted on 8 November 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 upwards of $4bn, 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 $1.66bn. Thus, it is unclear even among Oracle’s team exactly what fine should be assessed for the damages.

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

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