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Recurring Revenue: Article

SAP Reportedly Agrees to Pay Oracle’s Lawyers $120 Million

Briefly Public Court Docs Reveal Agreement

SAP reportedly agreed Monday to pay Oracle $120 million just to cover its "past and future reasonable attorneys' fees and costs."

Those are the fees that Oracle has wracked up pursuing its case for theft against SAP and TomorrowNow, SAP's IP-downloading cut-rate third-party maintenance subsidiary, the now shuttered unit that got SAP in the hot water it's now stewing in in a California federal court.

The joint stipulation is sealed now, carrying the notice "FILED IN ERROR. DOCUMENT LOCKED" in big bold letters on the court docket but IDG got a look at it first.

It says that in the proposed order TomorrowNow "stipulates to entry of judgment on Oracle's claims for violations of the Federal Computer Fraud and Abuse Act and California's Computer Data Access and Fraud Act, breach of contract, intentional interference, negligent interference, unfair competition, trespass to chattels, unjust enrichment/restitution and an accounting."

Under the deal - as in other deals filed in the last couple of days that aren't locked - Oracle has agreed not to seek punitive damages against SAP and TomorrowNow, but only seek "those damages available under the Copyright Act."

IDG says SAP would have pay Oracle the $120 million by next Tuesday November 9, when - theoretically of course - the trial would just be warming up. The sides picked an eight-man jury Monday and opening statements were Tuesday.

The court will have to approve and sign the deal first.

Oracle wants more than $2 billion in damages. It says that's the fair market value of all the files TomorrowNow downloaded. SAP wants to keep the damages down to around $40 million based on what Oracle actually lost in maintenance sales. It took a $160 million provision to cover the case last week.

However, the trial is really no longer about the money.

A few months ago SAP conceded so-called "vicarious" infringement - that it had profited by TomorrowNow's actions and could have controlled them.

The last it surprised everybody by stipulating to "contributory infringement," basically that its senior management knew about the thefts, to try to curb Oracle's blood lust.

It said it wanted to stop Oracle from turning the trial into a "media circus" by calling ex-SAP CEO Leo Apotheker, now HP's CEO, to the stand and pinning the whole mess on him, casting serious doubts on the wisdom of the HP board in hiring him in the process.

Ragging HP, Oracle Larry Ellison claimed to have direct evidence that Apotheker oversaw the "industrial espionage scheme." He alleged that Apotheker was "on the run" from a subpoena.

Despite SAP's concessions and the fact that the trial is just about damages, Oracle still means to get Apotheker in the witness box but it may have to settle for a virtual appearance. It has his taped deposition if he doesn't show up in person.

An Apotheker e-mail presented to the jury Tuesday said, "We need to inflict some pain on Oracle" by providing cheap TomorrowNow services to Oracle customers as a prelude to migrating them to SAP software.

Other star witnesses from SAP are also expected as well as Ellison himself, who will likely repeat his contention that SAP bought TomorrowNow in January 2005 knowing the Texas concern operated illegally from the due diligence it did and even foresaw that Oracle would sue.

According to a filed deposition of SAP executive Shai Agassi, who was on the SAP board at the time of the acquisition, SAP thought if Oracle sued TomorrowNow, customers would be "alienated" and that would be good for SAP.

Reuters also remembers that the trial might not be the end of it for SAP. There is still a Justice Department investigation going on. And the feds should be very interested in what SAP knew and when it knew it.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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