SAP and Oracle smoke $359-mn peace pipe over 2007 lawsuit

Enterprise software giants SAP and Oracle Corp have agreed to settle their long-running legal TomorrowNow copyright lawsuit, with SAP agreeing to pay its Oracle over $359 million.

However the figure is far below the $1.3 billion a jury award of $1.3 billion against SAP in 2010 (See: SAP ordered to pay Oracle $1.3 billion for software piracy), which SAP said was excessive.

An appeals court dismissed the jury award in August.  According to the appeals court Oracle's actual damages worked out to $356.7 million.

SAP agreed to pay the lower amount plus interest. SAP said that it had already paid Oracle at least $120 million in other legal fees and claim dismissals.

Legal arguments had since centred on how much money should change hands. The agreement and the payment seems to have satisfied both sides, ending a suit that began in 2007.

Oracle had sued SAP in 2007, claiming that its US-based subsidiary TomorrowNow, now closed, illegally downloaded thousands of copies of Oracle software and manuals and then resold them along with related services to Oracle's own customers, in a bid to woo them away.

SAP had acquired Texas-based technology firm TomorrowNow in 2005 for $10 million, before shutting it down in 2008.

Oracle had claimed $1.7 billion in damages, in what it said would have been the amount had it to license the software to SAP.

Before the trial began, SAP admitted its guilt and liability and the trial made it clear that SAP's most senior executives were aware of the illegal activity from the very beginning.

However, SAP, which had set aside $160 million for the case, argued that it was liable to pay only $28 million to $41 million to Oracle since the software had only been sold to a few hundred Oracle customers.

SAP's attorneys had argued that the award should be on the basis of the total amount of profits lost by Oracle and gained by SAP from the customers who left Oracle due to the copyright infringement.

After the settlement between the two, Oracle's general counsel, Dorian Daley, said the company was thrilled about this landmark recovery and extremely gratified that its efforts to protect innovation and the interests of its shareholder's were duly rewarded.

He added, this sent a strong message to those who would prefer to cheat than compete fairly and legally.