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

SAP admitted that TomorrowNow made "inappropriate downloads" of Oracle materials and will make changes at the division, but will continue with third-party support.

After months of back and forth on Oracle's lawsuit against SAP's TomorrowNow group, SAP issued a formal response today, with its CEO candidly admitting to some "inappropriate downloads" of Oracle support materials.

In a 20-page response to the lawsuit, SAP denied most of Oracle's charges, but did admit that TomorrowNow (referred to as TN in the response) inappropriately downloaded some Oracle support materials.

"Some TomorrowNow activity went beyond what is appropriate and contravened our high standards and business procedures," SAP CEO Henning Kagermann said in a conference call.

In its official response, filed with the U.S. District Court in San Francisco, SAP said TomorrowNow has policies to ensure that the company only downloads materials its customers have access to but that "certain downloads took place that, in violation of TN policies, may have erroneously exceeded the customer's right of access."

However, Kagermann denied that any of the information got back to SAP proper.

"We can say that a number of key allegations made by Oracle and examined by [SAP] appear to be unfounded," he said. "In particular, we believe that SAP did not have access to Oracle materials downloaded by TomorrowNow. Oracle support materials and bug fixes remain in TomorrowNow's separate systems and did not pass across our firewall to SAP."

While SAP indicated that it wanted to get the lawsuit behind it as quickly as possible, it would not speculate on the company's legal options.

"Because a number of key allegations made by Oracle and examined by us appear to be unfounded, we don't want to speculate today on our legal options, it's too early," Kagermann said. "It is typical in civil litigations in the U.S. that the courts have rules that require the parties to discuss alternative dispute resolution methods and we will comply with that."

Oracle filed suit against SAP TomorrowNow in March with a 44-page brief alleging "corporate theft on a grand scale."

In the original suit, Oracle accused SAP of compiling "an illegal library of Oracle's copyrighted software code and other materials," gaining access to Oracle's password-protected customer support systems and "stealing software products and other confidential materials that Oracle developed to service its own support customers."

In early June, Oracle amended the suit with seven additional pages of charges, including copyright infringement and breach of contract complaints. One example cited was SAP TN's Daylight Savings Time (DST) fix.

"SAP TN's 'solution' is substantially similar in total -- and in large part appears to be copied identically from -- Oracle's DST Solution," the brief read, saying that SAP TN's DST change "even includes minor errors in the original DST Solution that Oracle later corrected. SAP TN's version also substitutes an SAP TN logo in place of the original Oracle logo and copyright notice."

To this point, SAP's responses have been limited to statements saying it will fight the charges and is not inclined to settle out of court.

"SAP and TomorrowNow offer a viable alternative to Oracle support that the marketplace has embraced," Steve Bauer, SAP's vice president of global communications, said in an earlier statement. "SAP firmly believes that third-party support, which meets a growing customer need, plays a vital role in the enterprise software industry. SAP will vigorously defend against the charges brought by Oracle."

And for its part, Oracle has said that it would not accept a settlement if SAP offered.

More on Oracle suing SAP
Read the original Oracle-SAP lawsuit news here

Learn what the lawsuit could mean for third-party support

Check out what's SAP Watch blog had to say as the news broke

Going forward, SAP pledged changes to TomorrowNow's operating structure.

"When presented with our initial examination results, I directed my team to institute changes in TomorrowNow's operational management to ensure compliance with appropriate business practices," Kagermann said.

Among these changes, TomorrowNow's CEO, Andrew Nelson, will now report to Mark White, SAP America's chief operating officer. SAP will also provide additional training on policies and procedures to TomorrowNow employees.

One issue the suit brings up going forward could be the third-party support relationship, which often involves the maintenance provider downloading materials from the software provider, on behalf of the customer.

"I think the real question here would be whether or not SAP will strive to protect the rights of customers to have access to third-party maintenance providers including both Oracle and SAP third-party maintenance providers," said R. Wang, principal analyst for Cambridge, Mass.-based Forrester Research Inc.

SAP said that when TomorrowNow follows its procedures, the downloads are appropriate and that it would watch downloads more closely. But the company will not change TomorrowNow's business and will continue to add new customers through its Safe Passage program.

"There is no reason to change the Safe Passage program, because TomorrowNow is just a piece of the overall program," Kagermann said.

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