Oracle outlines its case that SAP stole its underlying applications

By Courtney Bjorlin, News Editor 28 Jul 2008 | SearchSAP.com

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Oracle is now accusing SAP's subsidiary TomorrowNow of conspiring to hack into its support website not only to download its support materials but also to steal and store its underlying applications, according to an amended complaint filed today.

Oracle lawyers allege that SAP executives were told about TomorrowNow's illegal operation and ignored warnings that Oracle could sue them because SAP wanted to win market share, said the complaint, filed in United States District Court in San Francisco.

The complaint describes in detail how TomorrowNow, SAP's third-party support subsidiary (referred to throughout the document as "SAP TN"), set up a tool to "scrape" Oracle's support website for bug fixes, patches, updates and instruction manuals. It alleges that SAP, through TomorrowNow, downloaded thousands of such support documents daily, stored them, and used them to sell support fixes at half price to Oracle customers.

"This case is about a conspiracy, led by German software conglomerate SAP AG, to engage in and cover up corporate theft of Oracle intellectual property on the grandest scale," the document reads. "For years, SAP profited from SAP TN's illegal business model, without breathing a word of it to Oracle, SAP AG's existing or prospective customers or the investing public."

SAP had little to say on the complaint, other than that it will answer it with a response due by Sept. 11. SAP spokesman Saswato Das said the company is working to get that response out sooner.

"They are strictly allegations," Das said. "Ultimately, it is the court that will determine the facts and the remedies in this case."

Oracle declined comment, other than issuing a press release referring to the filing.

The complaint was filed the day before SAP is scheduled to announce its second quarter earnings.

Last week, SAP announced it was closing TomorrowNow. Analysts and lawyers said the Oracle lawsuit made it impossible to sell the troubled subsidiary, and SAP wanted out of the third-party support business. Some lawyers also suggested the closure signaled the validity of Oracle's claims.

Oracle has claimed that SAP owes it as much as $1 billion in damages.

Called out specifically in the complaint is SAP's Safe Passage program, set up in 2005 shortly after SAP bought TomorrowNow to coax newly acquired Oracle customers onto SAP software. Oracle lawyers say that the program relied on stolen Oracle intellectual property to move customers to SAP and that executives even created a secret program dubbed "Project Blue" to facilitate the cover-up.

"[It was] a crucial element in their plan to undermine Oracle's customer base and brand and to build their own customer base and brand at Oracle's expense," according to court documents.

Using a tool dubbed "Titan," which TomorrowNow programmed to ignore any access or use restrictions for customers, the company downloaded materials and stored them on 20 dedicated servers, according to court documents. TomorrowNow also downloaded instruction manuals, guides and notes. Employees were allegedly given instructions on how to make the materials look like SAP-branded fixes.

Oracle caught SAP TN when it noticed unusually large downloads in November 2006, according to the documents. The usernames of former Oracle customers, who would once download a couple of dozen support materials off the site, were suddenly downloading thousands of documents a day, according to the complaint. One had the username "TomNow."

Oracle lawyers claim SAP TN copied its PeopleSoft HRM, CRM, EPM, FDM, portal and student administration applications. SAP TN may also have copied Siebel, eBusiness software, Hyperion and Retek.

Oracle and SAP are scheduled to meet in a settlement conference in October.

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