Oracle to expand SAP lawsuit, may target execs

IDG News Service - Oracle Corp. plans to expand its lawsuit against SAP AG to include charges that its TomorrowNow subsidiary stole software applications from Oracle, and that it did so with the knowledge of SAP executives, according to court papers filed Thursday.

Oracle said it plans to file a second amended complaint against SAP and TomorrowNow that will reveal "a pattern of unlawful conduct that is different from, and even more serious than," the conduct described in its initial complaint.

SAP's lawyers accused Oracle of exaggerating its claims, using court filings as "press releases" and trying to prolong the case unnecessarily. "Ignoring Judge Jenkins's admonitions, Oracle continues to submit hyperbolic argument in the guise of (court documents)," SAP's lawyers wrote. They were referring to U.S. District Judge Martin J. Jenkins, who is overseeing the case.

Oracle filed its suit (download PDF) against SAP a year ago, alleging that TomorrowNow employees posed as Oracle customers in order to download software patches and other support materials from an Oracle support Web site. TomorrowNow used the materials to provide cut-price services to Oracle customers and to try to switch them to SAP's platform, Oracle said.

Based on recent depositions, Oracle now claims that TomorrowNow workers downloaded Oracle business applications, not just its support materials. TomorrowNow then used the software "to service other customers, train its employees and create fake 'SAP' branded fixes, updates and related documentation for distribution," Oracle said.

It also claimed that SAP executives may have been complicit — something SAP has vehemently denied. "It appears that SAP AG and SAP America knew — at executive levels — of the likely illegality of TN's [TomorrowNow's] business model from the time of their acquisition of TN and, for business reasons, failed to change it," Oracle said. It didn't name any SAP executives.

The new charges are outlined in a 30-page joint filing submitted ahead of a case management conference scheduled for next week at the U.S. District Court for the Northern District of California in San Francisco. Oracle said it hopes SAP will agree to its filing of the amended complaint; otherwise, it will modify the existing complaint to include the new charges.

SAP didn't return a call seeking comment Thursday evening. It posted the documents (download PDF) on its Web site about the case. Oracle also has a Web page about the suit.

SAP has acknowledged that TomorrowNow may have made some "inappropriate downloads" from Oracle, and has replaced top executives at the subsidiary since the case was filed. But it has characterized any wrongdoing as isolated incidents, rather than the pattern of illegal behavior that Oracle alleges.

Oracle is seeking damages to be proven at trial, plus legal costs and an injunction requiring SAP to return any Oracle software.

In February, Judge Jenkins ordered Oracle and SAP to begin mediation proceedings. But the new documents show that SAP has reluctantly agreed with Oracle to push the starting date of a jury trial back by a year, to February 2010. Oracle said it needs the extra time to complete the discovery process. SAP wants to retain the date of a settlement conference scheduled for this October, but Oracle asked the court to delay that by a year also.

SAP's lawyers repeatedly expressed frustration at Oracle for what they view as its efforts to prolong the case by demanding "limitless discovery." They asked the court to make Oracle explain soon how SAP's conduct has damaged the company.

"Oracle recites essentially every element of every one of its claims as a factual dispute, ignoring that its repetitive claims all boil down to the same basic issues — what was allegedly copied; was that copying permissible; how was Oracle harmed? Those are the factual issues in dispute," SAP said.

"Oracle does not want to be focused, nor does it apparently want to effectively or timely resolve this case," it added.

Oracle retorted that the case involves an "extraordinary" amount of discovery, including terabytes of computer records that take weeks just to copy, plus the involvement of forensic scientists and "potentially hundreds of third parties." It also asked to extend the length of the trial from four weeks to six.