Oracle's fraud and copyright infringement suit against SAP and its TomorrowNow subsidiary escalated to a new level of contentiousness yesterday, with the two enterprise software rivals disagreeing in newly filed court documents over the length, scope, and timing of pre-trial discovery.
Oracle, in a joint case management document filed on Tuesday, said that the non-expert discovery pre-trial phase of the case "could not reasonably conclude in less than 18 months," and that the court and the parties involved in the case should plan for a trial date of Sept. 25, 2009, two years from now. SAP, however, argued that non-expert discovery should be limited in scope and cut off 10 months earlier than Oracle's proposed time frame and that a trial date be set sometime after Sept. 30, 2008.
The dramatically different time frames reflect a disagreement between SAP and Oracle over the scope and seriousness of the case. The case, filed by Oracle on March 22, revolves around TomorrowNow's practice of downloading from Oracle's Web site customer support documents that TomorrowNow used to provide third-party maintenance services to Oracle customers running PeopleSoft and JD Edwards applications. Oracle says it has identified about 10,000 such downloads, many of which, it charges, were illegal. In court documents, Oracle has called TomorrowNow's behavior "corporate theft on a grand scale."
SAP, while acknowledging that some of the TomorrowNow downloads were inappropriate, insists in its latest filing, "That is not a matter of 'corporate theft on a grand scale,' as Oracle says in its complaint, but a matter of contract interpretation."
SAP proposes that Oracle identify the customers on whose behalf TomorrowNow performed allegedly improper downloads. SAP said TomorrowNow would then provide Oracle with records showing the services provided to those customers, and Oracle and SAP could "meet and confer" on which downloads were improper. SAP said Oracle could then provide a list of damages it suffered. In the meantime, SAP asserts, the two companies should submit to an out-of-court mediation process.
SAP said discovery shouldn't require more than 20 depositions on either side, nor should it take more than "several months."
"Defendants believe that it is in the interests of all concerned, including customers, for this case to be resolved promptly so that the parties and their customers may focus on their ongoing businesses and continued innovation, without the distraction of unnecessarily burdensome or prolonged litigation," the SAP filing said.
But Oracle contends that SAP's attempts to limit discovery and push for a quicker trial represent an attempt to limit its liability. "SAP wants to sweep the whole affair under the rug by limiting discovery for a few short months to just its TomorrowNow subsidiary, by forcing early settlement talks without adequate discovery, and by asking the Court and Oracle to take its word that SAP America and SAP AG knew nothing about this activity and did not benefit from it," the Oracle filing said. "Oracle is entitled to know what happened, what SAP knew, when SAP knew it, and how much SAP has benefited from its scheme."
Specifically, Oracle objects to SAP's attempts to limit discovery to the actions of its TomorrowNow subsidiary. SAP has said in court filings that, after acquiring TomorrowNow, the parent company implemented policies ensuring that no downloaded customer support documents could be accessed by SAP itself.
Oracle, however, questions whether those policies were followed. "Given that, by its own admission, SAP violated its own supposed policies regarding downloading Oracle's intellectual property, there is reason to suspect that SAP also violated its 'firewall' policy and transmitted Oracle's intellectual property throughout the SAP organization," the Oracle filing said. "Discovery will confirm this further policy breach and what SAP did with these downloaded materials."
Oracle said that it initially would need 80 depositions to uncover the facts in the case. Besides deposing SAP AG officials, Oracle said it intends to depose customers involved in the case. Because many of those depositions will take place outside the United States, Oracle said, it would need 18 months to complete them.
Judge Martin Jenkins in the U.S. District Court in San Francisco will consider the case management arguments Sept. 4.
In other, unrelated SAP news today, the SAP Users' Group (ASUG) announced that it has named former Morris Communications CIO Steven Strout to the newly created position of president and chief executive officer.
Strout will report to the ASUG board of directors and be responsible for "strengthening the strategic partnership between ASUG and SAP and working with the board to develop a long-term strategy for the organization."
In an interview with Managing Automation, Strout said it was necessary for ASUG to name a full-time CEO in order to "get to the point where we can speed up value-added activities for the membership and new products and services." ASUG now includes about 50,000 members, all users of SAP software.
ASUG is considering implementing a number of new services, including a social network on its Web site and a benchmarking effort that would give SAP customers insight into the best practices employed by other companies.
Separately, SAP reaffirmed its earlier-stated plan to invest $1 billion in its operations in India by 2010. The company also said that in the past year the number of Indian companies using its software has grown from 1,000 to 2,000.
SAP said it is focusing on boosting its customer base in India as part of its stated goal of reaching 100,000 customers worldwide by 2010. SAP officials declined to specify the company's customer count goals for India. SAP also declined to break out Indian customers by the SAP applications they run. In its statement, however, SAP said small and mid-size companies running its All-in-One and Business One products represented a significant source of growth in India for SAP.