SAP admits liability in Oracle copyright lawsuit

The German software maker has said it will pay up for mistakes made by subsidiary TomorrowNow, but it is contesting the likely $1bn sought by Oracle in damages

SAP has accepted liability for copyright infringement in a case brought by Oracle, but is contesting the scale of the damages sought by its business software rival.

In a court filing on Thursday, SAP said that it assumed "ultimate financial responsibility" for the actions of its subsidiary TomorrowNow, which was shut down in 2008, after the major corporate theft case was launched.

"Although TomorrowNow did make mistakes in its operations, [Oracle's] damage claims are vastly exaggerated," the German software company said in a trial brief filed in US District Court in San Francisco. "Plaintiffs have asserted a claim for billions [of dollars] where their true damages measure in the tens of millions."

By assuming financial responsibility for TomorrowNow, SAP hopes to simplify the case and shorten the trial, the company said in the filing.

TomorrowNow was a third-party provider of support to customers of Oracle-owned PeopleSoft and as such it had access to those customers' login information for PeopleSoft products. Oracle's suit, filed against SAP and its subsidiaries in 2007, alleges that the subsidiary used that information to commit corporate theft by downloading more than 10,000 of Oracle's proprietary, copyrighted software and support materials.

In its suit, Oracle contends that it had "invested billions of dollars in research, development and engineering to create" the products that it alleges were stolen. The US company has said that recompense and punitive damages are likely to reach at least $1bn (£807m).

In its filing on Thursday, SAP reasons the damages award should be restricted to any loss in support profits that Oracle might have incurred when customers migrated to TomorrowNow. It has asked that the court consider no other claims.

Furthermore, SAP contends that the damages sought by Oracle are not proportional to TomorrowNow's business. It said that TomorrowNow was bought for $10m, never made a profit and that the services it offered "had at best a modest economic impact on SAP and [Oracle]".

While SAP will not contest Oracle's claims against TomorrowNow, the company believes Oracle's direct and indirect claims against SAP should be dismissed, it said in its filing. It also asked for the trial length to be shortened to two weeks from the scheduled six weeks. The trial is due to begin on 1 November in the District Court for the Northern District of California.

Oracle declined to comment on the SAP filing.


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