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Tuesday, July 03, 2007

SAP admits wrongdoing in Oracle lawsuit

SAP filed its response to Oracle's complaint last night, admitting that its TomorrowNow subsidiary engaged in some inappropriate downloads of Oracle intellectual property.

SAP reasserts the rights of its TN unit to download materials on behalf of Oracle customers who have the rights to those materials. It points out that "Oracle’s complaint does not challenge the basic propriety of third party support, nor do its factual allegations support the inflammatory statements" of Oracle's complaint.

At the same time, SAP claimed that the Oracle materials did not leave TN's internal systems, which are separate from the rest of SAP's network. SAP's response says,
Upon acquiring TN, SAP AG and SAP America put in place extensive policies to assure that no allegedly confidential material of Oracle obtained by TN on behalf of its customers would reach SAP AG or SAP America. Defendants are unaware of any breach of these policies, and believe that none has occurred.
It continues,
Oracle’s allegation that TN’s downloading conduct was “corporate theft” or involved SAP AG or SAP America is simply untrue.
SAP also announced that it is installing a new head over its TN unit. Former SAP Americas COO Mark White will now oversee TN, with founder and CEO Andrew Nelson reporting to White.

I think SAP is smart to admit any wrongdoing at this point. Any such activities would eventually be exposed anyway during Oracle's discovery process, leading to a drip by drip release of negative information about SAP. At this point, the issue would is to what extent TN or SAP benefited from the downloaded materials and what damages should be awarded.

SAP takes its turn at throwing punches at Oracle:
Oracle professes surprise and confusion about how TN can provide services more cost-effectively than Oracle. The answer is simple – TN does not force its service customers to pay artificially inflated prices for service to fund Oracle’s future acquisition and integration of products that customers do not want or need.
Of course, SAP does not mention that its own maintenance fees for customers of SAP software are pretty much in line with Oracle's. So, SAP should be careful about continuing this line of reasoning.

More seriously, in my opinion, SAP indicated that the U.S. Department of Justice is investigating SAP and TN. I speculated earlier that this lawsuit could lead to criminal charges against SAP, TN, or individuals implicated in the illicit activities.

SAP's response to Oracle's complaint is available here. SAP has also issued a press release on this matter.

Related posts
Oracle now charges SAP with copyright violation
Latest on the Oracle/SAP lawsuit
Oracle/SAP lawsuit: view from Rimini Street
SAP subject to criminal charges?
Oracle sues SAP and its TomorrowNow unit

by Frank Scavo, 7/03/2007 07:31:00 AM | permalink | e-mail this!

 Reader Comments:

The Markman hearing date of i2 suing SAP for infrigement on 7 patents of i2's Supply Chain Planing technologies will be announced very soon.

The lawsuit could potentially expose SAP's corporate theft pattern of behavior.

SAP initially had i2 as a partner then terminated the partnership and help themselves with i2's patented technology and hired some i2 employees to develop products similiar to i2's products to compete with i2 in SCM field according to i2 CEO Michael McGrath.

i2 is dead serious about this lawsuit and it believes it will win this case against SAP.
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