SAP Loses TomorrowNow Legal Battle With Oracle

After a three year legal battle, SAP AG was ordered to pay $1.3 billion to rival Oracle Corp. for violating copyright law. The $1.3 billion award is the largest jury verdict ever for a copyright case.

Despite the long legal clash between the two ERP rivals, a California jury took less than two days to reach its verdict after a three-week trial. The award is $1 billion less than the $2.3 billion in damages that Oracle had originally sought. SAP claimed its liability to be about $40 million.

Oracle’s president and CFO Safra Catz said that the $1.3 billion verdict is “the largest amount ever awarded for software piracy. For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle’s own customers.”

The legal case stems from SAP’s acquisition of TomorrowNow, which provided bargain software maintenance services to customers of PeopleSoft, JD Edwards, and Siebel ERP, all of which were brands acquired by Oracle. SAP reasoned that they could lure Oracle’s acquired customers to SAP by offering TomorrowNow’s support services as a bridge. This initiative was called SAP’s Safe Passage program.

In its lawsuit, Oracle claimed that TomorrowNow illegally accessed Oracle’s software and support materials and that SAP continued with its acquisition despite being aware of its illicit practices. SAP admitted in July 2007 that TomorrowNow had carried out “inappropriate” downloads of Oracle.

Despite the verdict in favor of Oracle, SAP released a statement declaring that they would not give up their legal fight. “We are, of course, disappointed by this verdict and will pursue all available options, including post-trial motions and appeal if necessary. This will unfortunately be a prolonged process and we continue to hope that the matter can be resolved appropriately without more years of litigation.”

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