SAP Agrees To £274m Copyright Settlement With Oracle

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SAP has agreed to pay Oracle a total of $426 million (£274m) for the actions of its affiliate, TomorrowNow

Oracle has finally received a bit of good news from the American courts after SAP agreed to pay it a damages award of $306 million (£197m) in the TomorrowNow copyright infringement suit filed by Oracle in 2007.

This damage amount goes on top of the $120 million (£77m) SAP already has paid to Oracle in attorneys’ fees when it admitted that its US based former affiliate, TomorrowNow, stole software and proprietary documents from Oracle’s websites in October 2010.

Guilty Plea

SAP pled guilty in federal court to 11 counts of violations of the US Computer Fraud & Abuse Act and one count of criminal copyright infringement during the trial, which was held in Oakland, California in 2010. SAP ultimately took corporate responsibility for its affiliate’s actions in a court document filed 28 October, 2010, and officially apologised to Oracle on 16 November, 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 (£837m) 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.

Long Running

The $306 million (£197m) specified on 2 August is the remainder of the fine agreed to by SAP, which long has been a rival to Oracle in the enterprise application and data centre 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 US intellectual property infringement award on record if the original judgement had stood. The jury on 23 November, 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.

Case Background

Two years after it was acquired by SAP in 2005, Texas-based 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. 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 (£1.4bn) 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.

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