Oracle Accuses SAP of ‘Massive’ Theft

UPDATED: Oracle  threw a firebomb of accusations at SAP  today, charging its enterprise software rival with corporate theft “on a grand scale.”

In a complaint filed in California’s Northern District Court in San Francisco, Oracle accused the German software company of engaging in “systematic, illegal access” to its computer support systems.

The lawsuit alleges that TomorrowNow, an SAP subsidiary that provides maintenance and support for Oracle-owned PeopleSoft and J.D. Edwards products, gained access to Oracle’s knowledge bases in November and December 2006 and January 2007.

SAP acquired TomorrowNow in January 2005.

According to the 44-page complaint, employees of TomorrowNow downloaded thousands of mission-critical items from Oracle’s knowledge bases by using the passwords of former and current Oracle customers.

“Through this scheme, SAP has stolen thousands of proprietary, copyrighted software products and other confidential materials that Oracle developed to service its own support customers,” the complaint said.

“As a result, SAP has compiled an illegal library of Oracle’s copyrighted software code and other materials. This storehouse of stolen Oracle intellectual property enables SAP to offer cut rate support services to customers who use Oracle software, and to attempt to lure them to SAP’s applications software platform and away from Oracle’s.”

An SAP spokesman told internetnews.com that it would not comment until its lawyers finished reviewing the complaint.

Oracle is petitioning the court for a preliminary and permanent injunction to stop SAP from continuing the alleged practice, and asking the court to compel SAP to return any information it claims was stolen, the “disgorgement of all ill-gotten gains unjustly obtained,” attorneys’ fees and costs as well as “further relief as the Court deems just and proper.”

An Oracle spokeswoman refused to comment on how much it estimates those “ill-gotten gains” could amount to, nor when Oracle discovered the alleged illegal access to its databases.

Scott Hervey, an attorney with Weintraub Genshlea Chediak, a Sacramento, Calif.-based law firm that specializes in trade secrets and trademark law, said it was too early to tell what this could end up costing SAP if all the charges are proven.

He noted that Oracle based its complaint on unusual provisions, such as “trespass to chattel.” He said the last time he saw that provision used in a lawsuit was in 2003, when Intel  unsuccessfully sued a former employee for sending e-mail to current employees.

He added that it was also interesting to note the laws that Oracle was not invoking in its complaint. In particular, despite making claims that SAP stole and copied copyrighted information, Oracle isn’t suing for copyright infringement. “I’m curious as to why there’s no such claim,” he told internetnews.com.

And while the complaint alleges that SAP used stolen passwords, Oracle chose not to sue under the anti-circumvention provisions of the Digital Millennium Copyright Act. “The anti-circumvention provision prevents circumvention of access controls–and that’s what passwords are,” he said. Oracle would not comment on why it made those choices at this time.

Shares of SAP were barely affected on the news, closing down by 8 cents, or about a fraction of a percent, to $46.28 in regular trading hours. Shares of Oracle edged up by just under 2 percent to close at $18.49 during regular trading today.