SAP backtracks in Oracle suit

German software maker SAP on Tuesday signalled it could seek an out-of-court settlement with Oracle after admitting a subsidiary made “inappropriate downloads” of its US rival’s software.

However, the German group again denied charges of corporate theft and said computer firewalls had prevented SAP having sight of any information gleaned by employees at the subsidiary, TomorrowNow.

Oracle filed a suit in the US in late March accusing SAP of stealing its intellectual property on a “grand scale” through TomorrowNow, a unit that services Oracle programmes.

The US group’s move intensified the often rancorous rivalry between the two companies, which are battling each other and newer entrants including Microsoft and Salesforce.com for a share of the business-software market. SAP is the world’s biggest maker of programmes to control inventories or manage client relations.

Henning Kagermann, SAP chief executive, denied all charges when the suit was filed and firmly rejected the idea of settling with Oracle out of court. But he said yesterday that an internal probe had revealed that at least one of Oracle’s 150 allegations was justified.

Employees at TomorrowNow had, in a number of cases, “downloaded support material for customers they were not allowed to download”, Mr Kagermann said. “The clear procedures in place were apparently not followed in all cases.”

Mr Kagermann told the Financial Times he would no longer rule out seeking a settlement out of court, conceding his previous rejection of such a move had been “based on the assumption that no point [in Oracle’s legal filing] was valid”.

He left open the question of whether SAP would make a provision for potential litigation costs. He said SAP had not done so in the first quarter but would “obviously evaluate” the situation before publishing second-quarter figures on July 19.

Noting the discovery of wrongdoing was “by definition not helpful” to SAP’s case, Mr Kagermann said. Mark White, the company’s US chief operating officer, had been put in charge of TomorrowNow and of efforts to find out who had breached company rules.

SAP said the US Department of Justice had requested documents from SAP and TomorrowNow. But the company said it had no evidence Washington was considering parallel legal action.