Judge denies most SAP motions to dismiss in Oracle suit

IDG News Service - A federal judge has rejected most of the motions made by SAP AG to dismiss parts of rival software maker Oracle Corp.'s lawsuit against it, according to a decision filed Monday.

Judge Phyllis J. Hamilton of the U.S. District Court for the California Northern District upheld SAP's motion to dismiss copyright infringement claims by two Oracle entities, J.D. Edwards Europe Ltd. and Oracle Systems Corp. But the judge denied SAP's motion to dismiss other claims, including charges of breach of contract and unjust enrichment.

SAP had also argued that a number of state law claims, including charges of interference with prospective business advantage and unfair competition, should be dismissed on grounds that they were preempted by the U.S. Copyright Act.

Oracle asserted in turn "that each of the challenged claims has 'extra elements' making the claims 'not equivalent to' rights protected under the Act." Hamilton denied SAP's motion on those claims "except to the extent that the state law claims are based on the alleged copyright infringement."

Oracle filed its lawsuit in March 2007, claiming that employees of SAP's TomorrowNow unit illegally downloaded materials from Oracle's support systems and used them to court Oracle customers. TomorrowNow, which SAP bought in 2005 and has since closed down, provided third-party support for Oracle applications, including PeopleSoft, J.D. Edwards and Siebel software.

Oracle has also claimed that with the knowledge of SAP's executive board, SAP workers "made thousands of copies of Oracle's underlying software applications on its computer systems," and that SAP used Oracle's code for training and customer service and "generally to support a business model that was illegal to its core."

SAP has acknowledged that TomorrowNow staff members made "inappropriate downloads" from Oracle's Web site, it but strongly rejected Oracle's claims of a broader pattern of wrongdoing.

In a statement, SAP said it was "gratified that the court agreed with SAP's position regarding the copyright claims that were dismissed" and though disappointed it did not prevail on all counts, looks forward to "working with the Court to achieve the proper resolution of this case."

An Oracle spokeswoman declined comment today.

SAP's response to Oracle's third amended complaint in the case is due by Dec. 30. A trial date has been set for February 2010.