Oracle takes TomorrowNow suit right to SAP’s door

In a second amendment to its legal action, Oracle claims that documents it obtained during legal discovery demonstrate complicity from SAP head office, dating back prior to its acquisition of TomorrowNow. Oracle’s amended complaint asserts that SAP knew of TomorrowNow’s theft of Oracle IP. The document cites pre-deal negotiations in which SAP mergers and acquisitions supremo Jim Mackey apparently suggests “appropriate compromises” to compensate for SAP’s potential legal exposure – in the end amounting to a $2 million indemnity off the $10 million TomorrowNow price. Why so little? Oracle suggests that, because of its own acquisition of PeopleSoft and thus also the latter’s recently-purchased JD Edwards ERP, SAP felt vulnerable. Oracle contends that SAP saw TomorrowNow as crucial to its Safe Passage tactics, designed to transition disgruntled PeopleSoft and JDE users off Oracle and onto SAP. Did SAP know back then? Either way, SAP documents appear to reveal that in the face of TomorrowNow’s poor business performance, SAP shelved ‘Project Blue’, allegedly aimed at reducing its legal exposure by compartmentalising the Oracle IP data into genuine TomorrowNow client folders – instead of a commingled master database, which Oracle contends reached 5 Terabytes and involved 20 or more servers operating virtually around the clock. The rest of Oracle’s suit appears much the same as before, although the apparent scale and method of TomorrowNow’s data acquisition is exposed in far greater detail. Oracle draws attention, for example, to analysts’ questions back in 2006 about how TomorrowNow seemed able to develop hundreds of regulatory updates, bug fixes and other support for its customers – then off Oracle maintenance – without infringing Oracle IP. “It was not clear,” says Oracle’s statement, “how SAP TN could offer, as it did on its website, ‘customised ongoing tax and regulatory updates’, ‘fixes for serious issues’, ‘full upgrade script support’ and, most remarkably, ’30-minute response time, 24/7/365’ on programs for which it had no IP rights. “Oracle has now solved this puzzle,” it continues. “To stave off the mounting competitive threat from Oracle and to do so without making the requisite investment, SAP unlawfully accessed, copied and wrongfully used Oracle’s enterprise software applications and [specifically] Software and Support Materials. It did so with the knowledge and consent of the SAP AG executive board of directors.” As for how: Oracle accuses SAP TN of using its Titan scraping tool to automatically probe and extract its password-protected customer support website for the PeopleSoft and JDE lines – a ploy it says it discovered in November 2006 after unusually heavy download activity. But Oracle doesn’t only accuse SAP TN of automating its IP theft – with clicks onto its support sites numbering in the thousands from several customers at a rate no human could manage. It also says that entire libraries were copied, including materials beyond the scope of former or existing customers’ own license rights – and that in numerous cases, from the Bryan, Texas IP address of SAP TN, which, says Oracle, is connected directly to SAP’s network. As for why the scope, Oracle points to an internal communication from Kathy Williams, director of support services at SAP TN, to fellow managers, in which she says: “How can we support a client that can never upgrade or have access to any fixes beyond what they have now?” The answer, says Oracle: “To … keep itself in business, SAP simply stole Oracle’s materials wholesale and with no regard to whether it or its customers were licensed… It would use a prospective client’s credentials to download materials, then keep these ‘pre-deal’ downloads to use with other customers.” As for Oracle’s assertion that SAP knew, its lawsuit states that SAP AG and SAP America directed the download and copying scheme, ratified it, never disavowed it, and financially benefited from it. And the alleged proof – SAP’s so-called Project Blue, under which SAP TN would revert to customer-specific folders, instead of the master library, which was never pushed through and which, says Oracle, was covered up. SAP is to file its formal response on 11 September to the court.