TomorrowNow

TomorrowNow specializing in a software maintenance of JD Edwards and PeopleSoft was purchased by SAP in 2005.

Course of judicial proceedings

2007: Beginning of process

In 2007 the Oracle company accused TomorrowNow of "corporate espionage", however SAP recognized only a small part from the charges brought to her. The essence of claims of Oracle is that the staff of TomorrowNow company got in the illegal way access to the internal corporate websites of Oracle, downloaded from there and then and used the closed documentation. Later charges of copyright violation were added to these claims.

2008: The court partially supported Oracle

In December, 2008 the court rejected two of three points of the claim made by Oracle corporation of SAP company in connection with the activity of employees belonging to it at that moment of TomorrowNow. These points concern copyright violation. The impossibility to confirm accessory of copyright to those divisions of Oracle corporation which appeared in charge became justification for court's decision.

However the court confirmed the right of Oracle to make the contract breach lawsuit and illegal actions from TomorrowNow. Among the specified actions - illegal access for staff of TomorrowNow to the closed sections of the website of Oracle (under the guise of her clients) and also downloading and further use of the materials which are laid out there.

The SAP company stated that the staff of TomorrowNow could not violate a condition of contracts as these contracts are signed with clients, and the staff of TomorrowNow clients is not that is actually does not fall under validity.

However the court rejected this argument, having explained that before continuing work with the password-protected area of websites, the user accepts terms of agreement, confirming the consent with clicking the I Agree button. In judicial practice the obligation expressed thus is considered effectual in law for a long time.

According to the statement of SAP, the company management is disappointed with court's decision and expects continuation of works on settlement of this case. At the same time in October, 2008 the TomorrowNow company was closed.

2009: SAP asks to open data of sales of Oracle

At the beginning of January, 2009 SAP announced that for more exact assessment of damage caused to Oracle the corporation should open indicators of the profit got by it directly from rendering services in support of the JD Edwards and PeopleSoft software products.

According to analysts, the queried information can give certain advantages to other companies which are engaged in support of software of third-party developers. The situation is complicated also by the fact that the situation with promotion of the called software products is now not in the best way, and disclosure of financial data is extremely unprofitable for Oracle.

So far Oracle refused to provide the information required about profitability of these products. However believe in SAP that without these data it will be difficult to count the actual damage suffered by Oracle from actions of staff of TomorrowNow.

By this moment only the fact that Oracle expects to receive from SAP as compensation up to 1 billion dollars is known.

2010: The court defined damage in the amount of $1.3 billion

In November, 2010 SAP agreed to pay Oracle of $120 million for what the chief executive officer of Oracle Larry Ellison called "industrial espionage", The Register reports. According to the settlement agreement, SAP will pay legal costs of Oracle in the amount of $120 million, and Oracle in exchange for it promises not to inflict penalties on SAP. This agreement still should be considered in court. In addition to compensation of legal costs SAP can be punished for violation of the law about copyright protection. Earlier in Oracle claimed that their damage as a result of actions of SAP was about $2 billion. SAP claims that the speech can go at most about several tens millions of dollars.

According to the resolution of the American court, SAP Oracle is obliged to pay a penalty in the amount of $1.3 billion for copyright violation. The decision is made on case of 2007 when Oracle accused the competitor and his subsidiary company TomorrowNow of illegal access to corporate files.

The American court directed SAP company to pay to Oracle corporation compensation for copyright violation in the amount of $1.3 billion. Legal procedure took three weeks, one more day was required to judges on making the decision, Associated Press reports.

The SAP company was going to spend for settlement no more than $160 million (so much it reserved), from which $120 million were already paid. The penalty to which the company was sentenced in district court of Auckland California, is the penalty for copyright violation and the largest penalty largest in the history in 2010, Bloomberg notes. Nevertheless, Oracle expected to receive up to $4 billion. The minimum penalty to which judges could sentence SAP made $519 million, maximum - $3 billion.

The lawyers protecting Oracle said that the intellectual property of Oracle as a result of this process was defined by judges "adequately". The president of the company Safra Catz said nothing in the official statement of Oracle about whether satisfies their amount of compensation.

2014: Final solution: penalty of $359 million

According to the resolution of the 9th circuit court of appeal of San Francisco of August 29, 2014, the fine of $1.3 billion which was ordered to pay by jury vessels of Northern California in 2010 is created on "a basis of unreasonable rumors". Owing to this fact the court reduced the amount of compensation for benefit of Oracle to $356.7 million, having added that in case of disagreement the American company can appeal against court's decision and initiate new trial.

SAP agreed to payment of compensation in $359 million for benefit of Oracle

In November, 2014 Oracle and SAP agreed about settlement of the judicial conflict about the rights to the software. SAP will pay for benefit of Oracle $359 million, plus $120 million for legal costs and removal of a number of claims. Announced ITAR-TASS with reference to The Wall Street Journal the reached agreement. The edition reminded that the amount of funds was 3.5 times less, than the American company initially required through court.

"We are glad that justice triumphed, and our efforts on protection of innovations and the interests of shareholders are rewarded properly. It will be a big lesson for those who preferred to go for deception, instead of the fair and legal competition" — the general counsel Dorian Daley noted.

In SAP also declared that, are happy with settlement of prolonged lawsuit therefore the company will not submit the appeal or to initiate new trial.^[1]

"We are glad that the court heard arguments of SAP and reduced the excessive size of a penalty required Oracle", says SAP on the occasion of the reached agreement.

The representative of SAP Saswato Das told the Bloomberg agency that the company will breathe now a sigh of relief as Oracle at last put an end to this burdensome case.

Notes