Oracle alleges SAP wanted to expand illegal TomorrowNow operation

Oracle's latest court filing alleges SAP was preparing to extend TomorrowNow Services to E-Business Suite customers and thinking about providing support for Hyperion and Retek customers.

Oracle has alleged that SAP was preparing to extend its illegal third-party support operation to Oracle's E-Business

Suite and its Hyperion and Retek acquisitions, in court documents filed this week.

Oracle's third amended complaint , filed in the United States District Court in San Francisco, repeats the essential charge of its last complaint – that SAP knew about TomorrowNow's illegal business model when it acquired the company in 2005. The complaint also alleges that SAP "was about to approve, or had already approved" support for Oracle's E-Business Suite and was considering support for Hyperion and Retek when Oracle sued TomorrowNow in March 2007.

"These presentations revealed that SAP TN's business fundamentally depended on generic bootleg copies of Oracle's software applications," Oracle lawyers wrote in the complaint. "Yet SAP still did nothing to stop the theft and instead took steps to expand it into other Oracle products."

According to the documents, in March 2007 SAP board member Gerd Oswald was given a presentation that stated expansion to E-Business Suite customers would "support SAP's strategy and Board area strategy" and "leverage service as [a] competitive weapon in order to restrict competition."

SAP declined to comment on the newest filing. Oracle did not return request for comment.

Oracle is alleging that SAP's third-party subsidiary TomorrowNow illegally downloaded software and support materials from Oracle's password-protected computer systems, and made thousands of copies of Oracle's underlying software applications on its computers.

TomorrowNow, which SAP announced in July it would shutter by the end of October, provided third-party support for Siebel, JD Edwards and PeopleSoft products. Hyperion, a performance management software vendor, and retail software vendor Retek are owned by Oracle, and the E-Business Suite is an Oracle product.

SAP expanded its "Safe Passage" program, which featured discounts and incentives to move to SAP software, to include Retek and Hyperion after they were acquired, according to court documents.

"According to its business model, SAP TN could not have offered Siebel or eBusiness Suite support services, or considered offering Retek and Hyperion support services, without first obtaining illegal 'sandbox' copies of that software for testing, research and development," the document reads. "In authorizing SAP TN to consider and, in the case of Siebel, actually offer these services, SAP AG's executive board of directors had no reason to believe that SAP TN would not likewise engage in illegal acquisition and use of Oracle's software."

For more on the SAP and Oracle lawsuit
With no tomorrow for TomorrowNow, third-party support still in demand

SAP responds to Oracle lawsuit, admits to "inappropriate downloads"

The newly filed complaint also offers deeper detail into Oracle's allegation that TomorrowNow copied, stored and accessed the applications. SAP employees accessed TomorrowNow's system through a special link on the TomorrowNow website – "SAPnet" -- and employees routinely emailed content and intellectual property among themselves, even transmitting copyrighted software code by email to SAP, according to the complaint.

Oracle's records, it claims, show 10,000 illegal downloads from SAP between September 2006 and February 2007, stored on a dedicated bank of 20 servers. SAP used a tool called "Titan" that SAP programmed to ignore access restrictions and scrape Oracle's website. Titan and other tools filled SAP storage vaults with more than five terabytes of Oracle's software and support materials, Oracle lawyers wrote.

"At the time Oracle filed its lawsuit, SAP had before it a detailed roadmap for connecting virtually every piece of the SAP TN network to the SAP AG network," Oracle lawyers wrote in the filing.

SAP, apparently aware of the charges Oracle intended to bring in the latest filing, alleged in documents filed Monday that they were just a maneuver aimed at extending the costly legal battle.

"Oracle intends to move to compel Defendants to produce documents related to additional software lines (Seibel [sic], eBusiness Suite [sic], Hyperion and Retek)," SAP's attorneys wrote in the documents. "So, rather than focusing its claims and discovery in the case, Oracle seeks to endlessly broaden and lengthen this case."

On Monday, attorneys for the two vendors again failed to reach a settlement.

SAP said it has made more than 9 terabytes of data on 39 servers available for Oracle's remote review, a process that began in mid-July.

Analysts interviewed aren't surprised that the Oracle vs. SAP lawsuit didn't wrap up neatly after SAP announced it would close TomorrowNow.

"It would have been surprising if this case settled so quickly," said Hillard Sterling, an attorney who specializes in information technology litigation at Chicago-based Freeborn & Peters LLP. "If [Oracle] really wants to get to the bottom of the activity at issue, there's no incentive for it to settle."

Moreover, Oracle's enjoying the attention.

"Oracle wants to fight SAP on every front it can: in the marketplace and in court," said Marc Songini, an analyst at Boston, Mass.-based Nucleus Research Inc. "Oracle has always been a relentless fighter against its competitors. Whatever the merits of the suit, this is hurting SAP's reputation, costing it legal dollars and, at least to some degree, siphoning away internal resources."

It's analysis that stands in stark contrast to a quote in the newly filed complaint by one of the architects of the TomorrowNow acquisition, former SAP executive Shai Agassi.

"Remember the PR value of buying [TomorrowNow]…. The bragging rights for having more PSFT customers under service than Oracle may be all we need for a momentum swing," Agassi told the SAP board, according to the complaint.

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