SAP, Rent-a-Center in battle over millions in fees

IDG News Service - SAP and Rent-a-Center are locked in a legal battle over whether the rent-to-own chain owes the vendor about $9 million in fees for excess use of its Business Objects analytics software.

Rent-a-Center filed a lawsuit against SAP last month in a Texas county court, but the case was removed to U.S. District Court for the Eastern District of Texas on Wednesday, according to court documents. The company is seeking a declaratory judgment stating it doesn't owe SAP the additional money.

In June 2005, Rent-a-Center signed a licensing agreement with Business Objects, which was acquired by SAP in 2007, according to court filings.

Earlier this year, SAP conducted an audit of Rent-a-Center's systems and discovered it had "over-deployed the software, including running CPUs and Named Users greater than those licensed," SAP said in a counterclaim.

The companies' agreement requires Rent-a-Center to pay list price for any licenses over the number licensed, and along with retroactive annual maintenance fees, Rent-a-Center's tab comes to more than $9 million, the filing adds.

But SAP made a "flawed reading" of the license agreement, and its demands for more money are invalid due to a two-year statute-of-limitations clause in the original contract, according to Rent-a-Center.

Rent-a-Center did not immediately respond to requests for additional comment Thursday.

"The filings clearly show that this case is not about SAP software or its implementation," SAP spokesman Andy Kendzie said in an e-mailed statement. "It is purely a license compliance issue between SAP and the customer. Conducting compliance audits is a routine practice in the industry and by SAP. As a matter of customer and legal policy, SAP will not comment further on this case at this time."

The deal Rent-a-Center inked with Business Objects was substantial, according to a press release issued at the time.

Rent-a-Center licensed the Business Objects XI platform and intended to deploy it throughout the company, according to the release. As part of the project's first phase, executives were to receive dashboards that would let them track stores' profitability as part of the project's first phase, it states.

In the second stage, the implementation was to be "expanded across all departments at Rent-A-Center in order to provide extreme insight into purchasing, sales, customer service, and marketing," the release adds.

Rent-a-Center's rapid growth from just eight stores in 1986 to roughly 2,800 in 2005 necessitated the investment in analytics, according to a statement in the release from CIO Tony Fuller.

This is only the latest instance of a software licensing fee dispute reaching public view through the courts. Informatica is demanding that Hospital Corporation of America's Information Technology and Services division pay it some $6.3 million in fees, based on findings from an audit last year.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com