Oracle Lawsuit Claims SAP Execs Knew Of Theft

Oracle Monday amended its lawsuit against SAP alleging for the first time that top SAP executives -- including CEO Henning Kagermann -- were aware that TomorrowNow employees were illegally accessing software and documents through Oracle's customer support Web site.

SAP said it intends to file a response to the amended lawsuit in September and won't comment until then.

The amended suit, filed in the U.S. District Court in San Francisco, alleges that SAP "unlawfully accessed, copied and wrongfully used Oracle's enterprise software applications and software and support materials. It did so with the knowledge and consent of the SAP AG executive board of directors."

"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 amended suit claims. Oracle filed the amended suit after collecting documents and taking depositions in the case.

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SAP acquired TomorrowNow, which provided software maintenance and support services for Oracle's PeopleSoft, J.D. Edwards and Siebel Systems applications, in 2005 with an eye toward enticing owners of those applications to eventually switch to SAP's software.

But TomorrowNow proved to be problematic for SAP. Last year TomorrowNow's top executives resigned and SAP said it was considering selling the subsidiary. Those efforts were unsuccessful, and last week SAP said it would shut down TomorrowNow's operations by Oct. 31.

Oracle sued SAP in March 2007 alleging that TomorrowNow had illegally accessed Oracle's password-protected customer support Web site and downloaded Oracle software and support materials. In a response filed in July 2007, SAP acknowledged that "certain downloads took place that, in violation of and#91;TomorrowNowand#93; policies, may have erroneously exceeded the customer's right of access." Trial in the case is currently scheduled for February 2010.

The 70-page amended complaint says SAP executive board members were warned about TomorrowNow's activities before and after the acquisition. The new filing, for example, alleges four SAP board members, including Kagermann, received a confidential document on Jan. 7, 2005 that said TomorrowNow did not operate legally. The document was the business case for acquiring TomorrowNow and included a presentation about the status of the acquisition negotiations as well as research and conclusions about the acquisition plan.

"The presentation made clear that TomorrowNow did not operate legally," the amended suit said, and the document predicted that acquiring TomorrowNow would likely result in legal action from Oracle.

The expanded suit says SAP executives conspired to use the illicit materials as part of its "Safe Passage" program to migrate PeopleSoft, J.D. Edwards and Siebel Systems customers to SAP applications. The suit said the effort to "cover up the fundamental illegality of that program" was called "Project Blue" and included confidential presentations that came with instructions to "please delete after reading."

The lawsuit also charges that software and support materials TomorrowNow acquired from Oracle's Web site were shared by TomorrowNow and SAP employees. That contradicts statements by SAP executives that only TomorrowNow employees had access to the Oracle material. The amended suit said SAP "compiled a massive illegal library of Oracle's copyrighted software code and other materials."