Oracle accuses SAP arm of theft

The increasingly bitter war between Oracle and SAP spilled over into the courts on Thursday as the US maker of corporate software accused its arch-rival in Europe of “corporate theft on a grand scale”.

The case, which levels the theft claim against a Texas-based arm of the German company, is the most aggressive tactic so far in Oracle’s acquisition-fuelled drive to beat back SAP’s push into its core markets in the US.

SAP declined to comment on the lawsuit.

“We’re still reviewing the matter,” it said. “It’s not SAP’s policy to comment on pending litigation.”

The lawsuit accuses the German company of gaining “repeated and unauthorised” access to Oracle’s customer support database and downloading large volumes of software and other material.

That material was then used by SAP in its effort to draw Oracle customers to its own products, according to the suit.

Though stopping short of accusing SAP of actually copying its software in its own products, the Oracle lawsuit hits at a central part of its business.

People close to SAP were dismissive of suggestions that it or any of its subisidiaries were involved in any wrongdoing. They said Oracle appeared unsettled by SAP’s competitive edge and was now resorting to unjustified legal means to try to hinder the German company.

So-called “enterprise” software companies, which sell mainly to large companies and governments, make a large part of their money from selling annual support contracts, which earn them income long after a customer has bought a piece of software.

By directly copying its support materials, Oracle claimed that SAP was depriving it of support revenue, while also making it easier to draw customers over to SAP products.

People close to SAP said that its Texas-based subsidiary, Tomorrow Now, was thought to be the cause of Oracle’s court action.

An independent company that was set up to offer cut-price software support to Oracle customers, it was bought by SAP early in 2005. The move was seen at the time as a direct challenge to Oracle’s business.

Tomorrow Now sells SAP’s “Safe Passage” programme, which it uses to try encourage Oracle customers to switch to SAP products.

“It looks like we hit a raw nerve there,” said one person familiar with Walldorf-based SAP, without giving reasons for this supposition.

According to the lawsuit, filed in federal court in the northern district of California, SAP employees signed into its support database claiming to be Oracle customers, including Honeywell International and Merck.

The access typically came just days before the customers’ support contracts expired and they switched to SAP for their support.

Information downloaded from the Oracle servers went far beyond the software and support materials that the particular customers were authorised to use under their licence agreements, it added.

The US company claimed to have traced 10,000 illicit downloads in the four months to January of this year, showing that SAP had been engaged in “sweeping” its database for information.